Policy Briefing 4 January 2011
(14 December - 4 January 2011)
The Christmas period saw the release of a couple of important publications for the voluntary sector, a stream of consultations from the Department of Health, funding settlements for further and higher education, and an invitation to tender for the Government’s new welfare-to-work programme.
A new Green Paper has been published by the Cabinet Office on charitable donation and social action. The paper, entitled “Giving”, explores how to increase the level of giving and came with the announcement of two new match-fund schemes and an infrastructure programme to support volunteers. An updated Compact was also released over the festive season, replete with “added teeth” in the form of parliamentary ombudsmen to investigate potential breeches and greater requirements on government departments to adhere. The latest refresh is the second in only two years and it will be interesting to see how the new document will be implemented during a period of deep cuts to public spending. Furthermore, the Government’s decision to abolish the Commission for the Compact, the public body responsible for promoting the Compact, is also likely to have an effect.
Arguably the biggest piece of news of early 2011 is the rise in VAT from 17.5% to 20% set to take place on 4th January. This will have a significant impact upon the finances of voluntary organisations. For instance, Paul Woodward, CEO of Sue Ryder Care has pointed out that the rise in VAT will cost the charity £1m. This amount of money could fund a 16 bed hospice for 6 months or provide 50,000 hours of patient care. This will also cut the number of grants awarding bodies can make at a time when applications are rising.
Other matters to look out for in early 2011 include the report from Lord Hodgson’s taskforce on reducing the bureaucratic burden faced by charities; the results of the Oldham East and Saddleworth by-election; the Welfare Reform Bill due this month and the long-promised Higher Education White Paper. Finally, those still lacking in festive cheer may be bolstered by Francis Maude and Nick Hurd’s Christmas Messages to civil society organisations.
Skills and workforce
Further details have been released on further education reform following the Government’s new Skills Strategy. A release from BIS outlines the policy direction being undertaken, which involves the wider use of statutory industry levies; promotion of vocational education through new “Craft Awards”; and £100m in annual funding to support training for SMEs.
The annual grant for university funding has been announced to the Higher Education Funding Council. Although funding for higher education is set to rise from £9bn in 2011-12 to £10bn in 2014-15, a significant amount of this will come from changes to tuition charges.
The funding allocation for 16-19 learners has now been published by the Young People’s Learning Agency. In 2011-12 the total budget for education and training places will be £7.6 bn. This represents a 1.5% cash increase on the planned budget and will allow 1.64 million young people to take up a place in a school sixth form, college or other provider.
As part of broader welfare reforms, Jobcentre Plus will be able to refer benefit claimants to skills support with potential sanctions for those who refuse to participate. Training offered will include vocational, basic, and employability skills. A consultation has been launched by BIS and DWP on what this conditionality might look like. The consultation closes on 3 February 2011.
New professional standards of support for social workers have been released by the Social Work Reform Board. The standards of supervision and support cover matters such as making sure the right number of skilled social workers are available to meet the level of demand and ensuring adequate professional development opportunities are available for social workers.
A new degree-level BTEC to deliver economically-relevant vocational skills has been launched by the education company Pearson. Degree programmes will be developed in four subjects (business, engineering, IT and health and social care) and will be piloted from September 2011.
A new extended arrangement has been agreed to keep the Key Skills element of Apprenticeships in place until September 2012. Key Skills were due to be entirely replaced by Functional Skills as the mandatory element of apprenticeships but for now the two will exist alongside one another.
The Learning and Skills Improvement Service (LSIS) is developing a range of support for learning and skills providers to respond to the introduction of £500k minimum contract levels in 2011-12. Forms of support will include an online matching service and case studies of collaboration in action.
A Green Paper has been published to explore ideas on how to increase charitable giving. Policy proposals include a £50m Community First Fund to match-fund investment in savings schemes in deprived areas; a £10million Volunteer Match Fund to double private donations to voluntary projects; and a Volunteering Infrastructure programme worth £42.5 million over four years to provide brokerage and support to volunteers. Public views are being sought on the subject in order to publish a White Paper in spring 2011.
Private and voluntary sector providers are now being invited to tender for contracts to deliver the Work Programme, the new payment by results model of welfare. The programme will allocate up to £14,000 in fees for the hardest to help groups and prime contractors will be expected to follow the Merlin Standard which ensures that sub-contractors are treated fairly. Tender information may be viewed here.
The code which regulates the employment benefits of staff recruited by independent providers contracted to deliver public services has been withdrawn. The “two-tier code” will be replaced by new Principles of Good Employment Practice which provide a more flexible guide on workforce management and will help small voluntary organisations deliver public services.
The agreed terms of compensation for civil servants have been released via a new Act of Parliament. The new terms follow lengthy discussions with unions such as GMB and Unite, and set out the details of compulsory and voluntary redundancies.
DWP has published an evaluative report on service users’ views and experiences of Work Capability Assessments. The evaluation found that the forms were often poorly filled and that many users felt that insufficient attention was given to the medical information they had brought to the interview.
The Government has published two new frameworks to outline the policy and funding details of NHS reforms. The frameworks state that Primary Care Trusts are to be organised into clusters, working with GP practices and emerging GP consortia on commissioning and reducing running costs, and that they will receive a 3% increase in funding to aid this work.
The Department of Health has launched a consultation on the creation of a new education and training system. The new system will involve local healthcare provider-led “skills networks” to help plan and develop the workforce n partnership with education providers, social care providers, Local Authorities and the newly-proposed Health and Well Being Boards. The consultation closes on 31 March 2011.
A consultation has been launched on the potential shape and funding structure of the new public health service, Public Health England. It seeks views on what sort of activities it should fund, how services will be commissioned, and how money will be allocated to local authorities. The consultation closes on 31 March 2011.
The Department of Health has published a framework on how the NHS will improve patient outcomes. The Outcomes framework will be a means of ensuring that GP consortia and Commissioning Boards remain accountable to the Department of Health and their patients. A consultation will be running on the new framework and is set to close on 31 March 2011.
Education Secretary Michael Gove has announced that the Pupil Premium will be worth £625m in 2011-12 but will rise to £2.5bn in 2014-15. Initially the premium will be allocated to those eligible for free school meals and children in care, and will be set at £430 per pupil. Meanwhile, school funding is set to remain at 2010-11 levels, although this constitutes a fall in real terms due to increased pupil intake.
Three more LEPs have been approved by Secretary of State for Communities and Local Government, Eric Pickles. The approval of “New Anglia” (covering Norfolk and Suffolk), the Black Country and Worcestershire take the number of LEPS up to 27. These new LEPs will now have to form boards of local business and civic leaders, and will be encouraged to bid for the £1.4bn Regional Growth Fund.
The Department for Communities and Local Government has published geographical data on how £21.5bn of government funding will be distributed per head across local authorities. Secretary of State, Eric Pickles claims that this data shows that the funding settlement is shared fairly across regions, contrary to most analysis of the local government finance settlement so far.
Reform of planning policy will reduce central guidance and “(put) communities at the heart of decision making” according to Decentralisation Minister Greg Clark. A new single national framework promises to hand power back to local communities by streamlining planning guidance down from 40 documents into the single National Planning Framework.
Following the recent publication of the Field Review, the Government has launched a consultation on child poverty. This entails the development of a new long-term approach to tackling inter-generational disadvantage, family breakdown and educational under-achievement. The consultation will run until 15 Feb 2011.
Following a bidding process involving more than 400 organisations, the UK Government will support 41 aid organisations through their main stream of funding, the Programme Partnership Arrangement. Smaller charities who can demonstrate they have innovative and effective projects are encouraged to apply for the Global Poverty Action Fund.
The Behavioural Insight Team based within the Cabinet Office has released its first paper on how behavioural theory may help create a healthier population without legislation or costly health initiatives. The paper sets out a range of case studies on how behavioural science can be applied to areas such as smoking; food hygiene; physical activity; and social care.
Minister for Decentralisation, Greg Clark has announced a new service to help community groups overcome bureaucratic barriers. The “Barrier Busting” service will operate online via the CLG departmental website and will allow community groups and citizens to submit ideas on how to overcome local barriers.
A series of reforms have been announced to the Enterprise Finance Guarantee - a scheme which lends up to £1m to small businesses that suffer difficulties in accessing normal commercial loans - to better support Community Development Finance Institutions.
The voluntary sector
The Cabinet Office and Compact Voice have jointly-published a new version of the Compact. The updated document - which governs the relationship between Government and the voluntary sector - is more concise than previous versions and includes a series of accountability and transparency measures, such as a parliamentary ombudsman to investigate breaches and a requirement for government departments to state how they are implementing the Compact within their business plans. The National Audit Office will also conduct an investigation into how it operates across government.
The latest Labour Force Survey figures show that the voluntary sector now employs 806,000 people, a growth of 8% over the last year. The findings, produced by the Third Sector Research Centre, NCVO and Skills - Third Sector, also show that the voluntary sector continues to have a high proportion of part-time staff (40%). However, it should be noted that these increases in voluntary sector employment do not reflect the situation following the recent Comprehensive Spending Review.
The New Years’ Honours list has been released, recognising the achievements of several civil society leaders and community activists. This includes knighthoods for social entrepreneur Alec Reed and ACEVO CEO Steven Bubb. Stephen Dunmore, former chief executive of the Big Lottery Fund, and Stephen Wyler, director of the Development Trusts Association also received OBEs.
A report by the Charity Finance Directors’ Group, the Institute of Fundraising and PWC shows that charities that receive state funding expect an 8% cut, equivalent to £1.2bn in lost income. The report, “Managing in a Downturn”, also suggests that 93% of charities have already experienced a reduction in income from statutory sources whilst almost 40% have seen an increase in demand for their services as a result of the recession.
Community Development Finance Institutions increased their lending by 77% to £200m over the last year. An annual review of CDFIs showed that they received applications for loans worth £437m during the year and lent to around 15,300 individuals and 3,600 businesses and charities. The number of CDFIs in existence continues to decrease, however
NAVCA has published a report exploring how local support and development organisations can work with public bodies to shape the intelligent commissioning of services. The report, “A Bridge between Two Worlds”, outlines the commissioning process in detail and draws upon a number of real life examples of partnership work between voluntary organisations and the public sector.
Think tanks and research
The Institute of Fiscal Studies has criticised the Government’s decision to withdraw EMA payments to support 16-19 year olds in further education. IFS researchers found that such payments significantly increase participation rates and that any costs were likely to be exceeded by the future wage gains of recipients.
The latest Labour Force Survey showed that the number of people in work fell by 33,000 to 29 million, an employment rate of 70.6%. The number of people claiming Jobseekers’ Allowance also fell slightly but remains around the 5 million mark, whilst the economic inactivity rate (those out-of-work but not claiming benefits) continues to rise to over 9 million. The number of unfilled vacancies is currently estimated at around 468,000.
Less than a quarter of employers have recruited staff from disadvantaged groups according to new research by CIPD and KPMG. Young people with few qualifications, the long-term unemployed, ex-offenders and older workers are all losing out as 32% of organisations actively exclude them from their recruitment process.