Kirsty McHugh blogs on the Spending Review

After the dust settles…

It always takes a while for the dust to settle after any Budget or Spending Review and this year’s Osborne offering is no different.  As employment support providers, large and small, digest the Autumn Statement a number of elements are becoming increasingly clear.

First, the days of large consolidated outsourced programmes are over – at least for now.  What we have on offer from the DWP is a highly targeted Health and Work Programme focused on jobseekers with health conditions, disabilities and those who have been out of work for two years plus. This is much slimmer nationally commissioned provision than the sector has been accustomed, although many will be hoping that combined authorities might want to pitch in cash too.

We are also seeing a move from the DWP as monolithic commissioner.  We already knew that there would be devolution of commissioning in Scotland and co-commissioning in Greater Manchester.  We now know that this will be joined by co-commissioning in London and ‘co-design’ in a number of other areas.  Although very far indeed from the full devolution of employment support for which some councils and others have been calling, it does inject some necessary local authority input into the mix.

As widely predicted, health and employment has been the focus of the announcements.  Much of this is welcome. The commitment to funding health and employment innovation pilots is positive, as is the news of an additional £600 million in spending on mental health services, including talking therapies.  Lack of access to CBT and similar approaches has been a major problem for many jobseekers and their providers around the country – let’s hope the Dame Carol Black Review, due to report in the New Year, picks up the baton on this too. 

However, the devil will, as ever, be in the detail. The contract sizes for the Health and Work Programme promise to be far smaller than something like the Work Programme.  We also do not yet know the funding model.  Programmes which are wholly payment by results have not proved the most effective for these groups. This is particularly the case if the government wants the experts involved – and it would be hard to see how the provision will work if they are not.  In addition, we don’t yet know how government intends to assess and segment jobseekers to determine who should receive different types of service  – a prerequisite underpinning of good employment support.   

There is also great concern about what this might all mean for jobseekers.  From the Statement it appears that the government expects jobseekers a long way from the labour market, but who do not have an obvious health issue or disability, to stay with a much overstretched Jobcentre Plus for two years before being offered any specialist support.  So much for the principles of early intervention or invest to save.  We already know that many people cycle in and off benefit for years without acquiring the requisite consecutive amount of time unemployed to trigger referral to intensive employment support.  This is likely to be even more the case going forward.

It’s also worth noting the complete lack of any mention of youth unemployment in this week’s announcements.  Youth unemployment, as we know, tends to be politically attractive – ministers want to be seen to ‘do something’ about our young people languishing out of work. This time however there was nothing.  We know that Matt Hancock is chairing a cross government ‘Earn or Learn’ taskforce looking at putting meat on the bones of the Youth Obligation. However, I do not believe that simply sending Jobcentre Plus advisers into schools or taking young people out of eligibility for Jobseekers Allowance will solve the problem of structural youth unemployment – good quality employment support needs to be part of the mix too.

So, in conclusion, the wheel has turned.  Instead of the large consolidated programme envisaged by Lord Freud and implemented by Chris Grayling, we appear to be heading back to a world of lots of smaller programmes. The Work Programme, Work Choice et al will trundle on for some years yet; the Health and Work Programme will come into effect by 2017; ESF funded provision, whether DWP, SFA or Big Lottery Fund, will start next year.  The Scottish Government will do its own thing; joint authorities in many areas similar.  And the sector will survive on the mix of national and local contracts, corporate money, sponsorship, earned income, trusts and foundations  – depending on their sector – as it always has done.

Employment support providers will continue to serve jobseekers despite government retrenchment and ERSA is going to help them.

Kirsty McHugh
Chief Executive, November 2015