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Policy briefing 7 June 2010
(25 May – 7 June 2010)
The previous two weeks have continued to provide us with an indication of how the Coalition Government will operate.
The Queen’s speech outlined the nature of the legislation that the Coalition will seek to pass and it will be worthwhile to follow the progress of the Public Bodies (Reform) Bill as this will contain the full detail of which quangos will be cut.
Meanwhile, the list of ministerial responsibilities makes for interesting reading as the Liberal Democrats are conspicuously absent from senior positions relating to skills.
This suggests that the Conservative’s education agenda will most likely take precedence over the forthcoming government.
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Political
The Queen’s speech supported the Coalition Government’s promise to enhance the role of the voluntary sector in public service delivery. Although specific legislative changes are not expected, the Government has promised to tackle current barriers to the third sector’s involvement in service delivery, including the ability for public services to transform into co-operatives.
A total of 23 bills and one draft bill were announced in the Queen’s speech. These include a Welfare Reform Bill to simplify the benefits system; a Green Economy Bill to implement energy efficiency measures; an Academies Bill to enable all schools to become Academies; an Education and Children’s Bill to simplify the school curriculum; a Health Bill to cut the cost of NHS administration by a third; a Public Bodies (Reform) Bill to cut the number of public bodies; and a Localism Bill to return planning control to local authorities.
Various figures with a history in the third sector have been awarded peerages. The list includes Deborah Stedman-Scott, CEO of Tomorrow’s people; Nat Wei, founder of Teach first; Maeve Sherlock, ex-CEO of the Refugee Council; and Angela Smith, former Minister for the Third Sector.
A new report, “State of the Nation”, provides a detailed picture of poverty in the United Kingdom as a basis for devleoping welfare policy. Amongst the report’s findings are that income inequality is at its highest level since statistics began; the proportion of the population living in relative poverty is higher than in many European countries; and the proportion of young people not in work, education or training, is higher than in almost any other European country.
A list containing the name, job title, grade and salary level of senior civil servants across Whitehall with salaries over £150,000 have all been made freely available by Francis Maude, Minister for the Cabinet Office. These details have been released as part of a drive to make the public sector more accountable and promote better value for money.
The Government has made the entire contents of the Treasury’s spending database available for free online. The database includes almost £600m in departmental debts and contains over 24million entries dating back to 2008. However, critics have argued that the information is too complex to interpret without professional expertise.
In his first speech as Secretary of State for Business, Innovation and Skills, Vince Cable pledged his commitment to an early reduction of the deficit and a major cull of at least 20 departmental quangos. Cable also used the speech to outline his priorities for further education, including an increased emphasis on lifelong learning, reducing the bureaucracy around FE and overcoming the “outdated value distinction” between apprenticeships, further education and higher education.
The full responsibilities of BIS ministers have been announced - Vince Cable (Lib Dem) will take overall responsibility for departmental budgets; David Willetts (Cons) will be responsible for higher education, science and technology; John Hayes (Cons) will be responsible for further education, adult skills, the Skills Funding Agency, lifelong learning, adult apprenticeships, UKCES, Sector Skills Councils and qualification reforms; Mark Prisk (Cons)will be responsible for regional development and the low-carbon economy; and Ed Davey (Lib Dem) will be responsible for consumer affairs and social enterprise.
The London Development Agency and Regional Devlopment Agencies in the North of England are likely to stay according to Vince Cable and David Cameron. While most RDAs are likely to transform into more informal “Local Enterprise Partnerships”, RDAs in relatively deprived northern regions are to play an ongoing role in bringing resources into the regions. The eight RDAS outside of London (which will also be kept) have been told to save £270m in this financial year.
Both the CEO and Chair of the Student Loans Company have been replaced following high-profile operational mistakes last year. The decision, made by BIS ministers Vince Cable and David Willetts, was also encouraged by the publication of a critical report by PricewaterhouseCoopers.
Two new bills are to be passed by the Department for Education in the forthcoming Parliament. The Academies Bill will give all state schools, including primaries, the right to apply to become Academies and receive charity status. Meanwhile, the Education & Children’s Bill will reduce the school curriculum and establish a “pupil premium” for the poorest pupils. Education Secretary, Michael Gove has also penned a letter to all headteachers in England to persuade them of the benefits of Academy status.
The new ministerial roles within the Department for Education have been announced - Michael Gove (Cons) will serve as Secretary of State for Education; Nick Gibb (Cons) will have responsibility for schools, apprenticeships, qualifications, the Qualification and Curriculum Development Agency and the Young People’s Learning Agency; Sarah Teather (Lib Dems) will have responsibility for early years, families and the voluntary sector; Tim Loughton (Cons) will have responsibility for the children’s workforce and the National Citizenship Service; and Lord Johnathan Hill (Cons) will have responsibility for academy schools.
The Department for Communities and Local Government intends to pass a bill “to devolve greater power to councils and neighbourhoods and give local communities control over housing and planning decisions.” The bill will give greater financial autonomy to local government; replace Regional Development Agencies with Local Enterprise Partnerships to promote local economic development; and will implement a community “right to bid” to take-over local public services.
Communities Secretary Eric Pickles has urged councils to publish details of all spending over £500, information on salaries, job titles, allowances, frontline service data, minutes of meetings and invitations to tender. It is suggested that such reforms would put the voluntary sector and small businesses in a stronger position to bid for contracts.
Ministers have decided that no future bids for the Future Jobs Fund will be accepted. The programme, which has so far placed over 60,000 unemployed young people in work placements is due to be frozen as part of spending cuts. However, DWP has announced that all current commitments under the programme will be honoured.
The Department for Work and Pensions is to make sweeping reforms to the welfare system in order to address entrenched poverty and worklessness. The proposed reforms focus on improving the rewards for people moving off welfare and into work through the creation of a single welfare programme to offer targeted support to those in greatest need. The system will make benefits conditional on willingness to work, re-assess all incapacity benefit claimants, and be made open to independent providers.
A critical report by the National Audit Office has outlined the challenge facing voluntary sector providers of public services. The report focuses on the “Pathways to Work” programme to reduce the number of people claiming incapacity benefits and help them into work. The NAO argues that the programme had turned out to provide poor value for money and gave no evidence that the service performed better under the voluntary sector than traditional public bodies. Three-quarters of sub-contractors delivering the scheme were from the third sector, 60% of which were due to make a financial loss as a result of the scheme.
A confidential report on the NHS by a management consultancy has been published following freedom of information requests. The Mckinsey report, disowned by the Labour administration, calls for 137,000 job cuts to the NHS workforce in order to achieve £20bn of savings by 2014.
The Department for Culture, Media and Sport has launched a consultation on proposed reductions in the share of National Lottery funding directed to the Big Lottery Fund for voluntary and community organisations. Under proposals, the proportion of overall lottery cash paid to the Big Lottery Fund would fall to 40% whilst the proportion allocated to arts, sports and heritage would rise to 20% by 2012.
The Department for Energy and Climate Change intends to pass a bill “to improve energy efficiency in homes and businesses, to promote low carbon energy production and to secure energy supplies.” The bill will implement a “Green Deal” of incentives for people to deliver energy efficiency to homes and business, and could also be used to create a Green Investment Bank to fund environmental initiatives.
Three out of the six prospective candidates for the Labour leadership contest have reached the necessary number of nominations to stand for party leader. So far David Miliband has received 62 nominations; Ed Miliband has received 49 nominations; and Ed Balls has received 33 nominations. The remaining candidates – Andy Burnham, Diane Abbot and John McDonnell – all need to reach the required 33 nominations before hustings begin on 9 June.
Skills
EU-level sector councils could help align vocational education and training with labour market need, according to a study published by the European Commission. Such EU-level sector councils could have a positive effect through developing training systems more responsive to skills needs and better coordination among national sector councils. It also recommends a focus on information exchange as the most feasible action of such councils and recommends that the EU promotes sector councils for employment and skills.
A paper published by the Centre for Learning and Life Chances shows that average levels of job-related training in 2009 are currently standing at 1993 levels. Evidence from a number of small-scale employer surveys suggest that changes in products, technologies, work organisation and regulatory requirements are driving a need for adult skills improvement and updating for employees at all qualification levels, but that this is not being reflected in contemporary training trends.
The British Educational Communications and Technology Agency has become a victim of the public spending cuts. Stephen Crowne, CEO of BECTA, said that he was “disappointed” and pointed out that the organisation has a key role in making savings for schools and helps ensure IT skills among some of the poorest children.
The General Teaching Council for England is to be disbanded by the Department for Education following Parliament’s approval. Explaining the decision, Education Secretary Michael Gove said that it was the “one organisation…whose purpose and benefit to teachers I am deeply sceptical” and that it “simply acts as a further layer of bureaucracy while taking money away from teachers”. GTC are currently seeking legal advice on the issue.
A paper by the 157 Group of high-performing colleges illustrates the vital role that colleges play in community cohesion. The Group argues that no other organisations have the reach that enables colleges to engage with all sectors of the community, from the voluntary sector to private employers. It also suggests that colleges would play a more effective role if greater weight was given to the local articulation of need.
Think Tank and research activities
The thinktank, Demos has published a report which tries to contextualise ideas about “Big Society” by looking at the lessons learned by two deprived communities engaged in locally-driven regeneration programmes. The report suggests that such citizen-led programmes were successful because they developed over a long time; they were not dictated by government funding streams; they demonstrated active grassroots democracy prior to being allocated resources; and they were adept at providing evidence of residents’ satisfaction and levels of engagement.
The Confederation of British Industry’s annual education and skills survey has unearthed familiar concerns from employers about skills levels and workforce training. The survey found that improving the employability skills of young people entering the labour market is businesses’ top priority for schools and universities. The CBI also found that the support government provides on workforce skills needs to be more accessible and better targeted.
Nearly all respondents (97%) to a British Association of Social Work poll said that public spending cuts could lead to a significant increase in the risk of child protection tragedies because local authorities are already too stretched. The online survey found that only 5% of child protection teams are fully staffed and over half are struggling with social worker shortages of 30% or more.
The voluntary sector
Minister for Civil Society, Nick Hurd has confirmed that the Conservative Party’s pre-election pledge to provide neighbourhood grants to community groups in deprived areas will be maintained, despite not being included in the official coalition programme. The money is set to come from future loan repayments to the Social Investment Business.
The Finance Act 2010 is to introduce a new definition of charities and other organisations entitled to UK charity tax reliefs. The new definition includes a requirement that to be a charity, managers must pass a ‘fit and proper persons’ test. The test will range from simple verification of the person’s name and address to detailed examination of the facts where, for example, there has been a previous conviction for tax fraud.
A survey carried out by NCVO in collaboration with the Office for National Statistics, “Measuring Outcomes for Public Service Users”, shows the need to reconsider commissioning practices. The report details how the volume of service provision by the voluntary sector has substantially increased by 50% over the last 5 years, with more than 50% of local government funding in the sector being allocated to the provision of social services. It also advocates using measures which take account of social value rather than the narrow performance measurement models popular among commissioners.
Joint-research undertaken by YouGov and New Philanthropy Capital has found that 40% of donors would favour a performance rating system for charities similar to that used by public sector institutions. The research also found that, under such a system 68% of donors would transfer their donations away from a charity which had been found to perform badly.
The disability charity, Scope has devised a new way of charity financing through “leveraged fundraising”. The scheme will leverage ten times the amount of current donations through using the value of property as collateral for loans from donors. Leveraged fundraising will be used to raise £1.8m to build new housing for disabled adults by generating £18,000 for every £1,750 donated, using a combination of donations, tax breaks, bank debt and soft loans.
A survey undertaken by the London Voluntary Service Council has found that 68% of voluntary groups in the capital saw their workloads increase due to the recession. Up to 50% of such increases were because of enquiries about unemployment and debt.
Research by the Commission for the Compact has found that the training, expenses and childcare costs of volunteers from underrepresented group cost on average £2,000. In addition to this, underrepresented groups face barriers such as Criminal Records Bureau checks and language barriers. However, potential benefits brought by volunteers from underrepresented groups may include language skills and community cohesion.
The total value of large charities’ assets fell by £8bn during the recession according to research by the Charity Financials group. Annual reports of the country’s 5,000 largest charities, found that 60% of charities saw their asset values fall.