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Posted By George Selmer FIEP, Founding Director, ThinkWinDo, 12 March 2017

What is the impact of the Budget 2017 on the employability sector?

By George Selmer FIEP, Founding Director, ThinkWinDo

What are my thoughts, I’m asked, on the impact of the budget on the employability sector?

It’s an interesting one. Because, for the first time in a very long time, in the most obvious sense, there is very little that the Budget has to say about the employability sector. The £5m allocated to returners to work is about the only evidence of any spend on active labour market programmes. Given the size of the allocation, it’s hard to see this as anything other than window dressing.

The Employment Related Services Association’s email update on the relevant points in the budget contained a mere six bullet points. Looking at the departmental DEL allocations, it is clear that DWP will be considerably smaller than it is now by 2020 - in line with the numbers outlined in the Comprehensive Spending Review in 2015. Public spending in general continues to be squeezed, with the pips in local government now almost certain to squeak, if not squeaking already.

It is hard to draw any other conclusion than that the current government is one less interested in active labour market policy than at any time since the early 1990s. For all but the most experienced of us, that’s a time beyond our working memory!

The key focus is clearly now on adult skills and Apprenticeships, along with the continued drive for devolution. The subtext of the Budget shows that these are clear signals to which the sector must respond. I started off by writing some reflections on both of these topics, but I’ve deleted them - because I really wanted to say something else.

The Worst of Times?

It was clear that we were heading here from the release of the CSR in November 2015. Now we are here, I’d ask the question - how many of us in the sector are truly prepared for it?

You could say that these are tough times for the sector. You could say that it’s the beginning of the end, if you wanted. You could also say that these things are cyclical and if we just survive the next few years, there’ll be a recession, they’ll have to throw money at it and things will start to get better (at least from the point of view of an employment support provider!) You could say that the next few years, though, are going to be about managing decline, rather than investing for growth.

You could say any and all of these things.

The Best of Times?

Or, you could choose to innovate, diversify, renew your services and increase your impact. It’s entirely up to you.

There’s public money out there. There’s less of it, but still the opportunity to join up programmes and funding streams to deliver greater impact at reduced cost remains. One route to innovation in the next few years will be integration - between employment, skills, apprenticeships, criminal justice, health and social care, etc. Where are you on that road?

You could develop new services, that meet new needs or totally transform the way you meet existing needs. When was the last time you approached central government with an exciting new concept, with a sturdy cost-benefit analysis and a request to pilot it somewhere? Rather than waiting for government - central and local - to approach us, asking us to tender to fix the problems they have identified in the way that they have designed, why don’t we get out there first and offer something new? Outside of the contracted public services market, organisations would never dream of sitting there waiting for their customers to tell them what they wanted. Steve Jobs imagined the iPhone - we couldn’t.

As Apprenticeships moves towards becoming a business to business market, as opposed to a business to government market, why shouldn’t we make those similar moves out of choice in aligned spaces. There is a commercial offering to be created in employment, skills and health and wellbeing - there is a clear return on investment for business. Why don’t we make them an offer? I spoke to a charity a couple of weeks ago that have done exactly that - charging large employers commercial rates for delivering high quality pre-employment training and placement for young people into their front-line customer service positions.

And while we are on the subject of charities - there’s huge opportunity for innovation. Too many charity organisations in the sector are too heavily reliant on government contracted funding - often for upwards of 70, 80 even 90% of their revenue. That same charity I spoke to recently has totally flipped their revenue model on its head. They’ve tapped into a rich stream of fundraising, corporate sponsorship and partnership with blue-chip businesses. Why? Because they offer something that those funders, donors and sponsors see as having a commercial and social value - and they are prepared to invest in it. What’s stopping the rest of you?

The Growth Paradox

Boston Consulting Group says this about growth: ‘over time, it is imperative. Across all industries, it is possible. And experience shows that it is perilous.' And their data shows that it is possible to grow, even in markets that are unstable or fading. It’s difficult to see the core employability market in any other way. But it requires the trailblazers and the innovators to buck the trends. In our sector, growth is not just about revenue, profitability, shareholder growth or career security for industry professionals. Growth means social impact, reducing disadvantage and making our country a slightly better, fairer place. So, on the basis that it is possible, just harder, we’d better get on with it.

 

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