Councils, don’t look £1bn jobs fund gift horse in the mouth

May 22, 2009

Anna Turley
www.publicservice.co.uk

Lost in the maelstrom of lawn mowers, lightbulbs and loo seats that engulfed Westminster last week was the announcement of a substantive, and rather more commendable, cash bonanza.

On Wednesday, the Prime Minister, Hazel Blears and James Purnell launched the £1bn Future Jobs Fund that had been trailed in the budget, and which aims to create 150,000 jobs over the next two years in areas hardest hit by the recession. The fund is targeted primarily at unemployed young people (18-24), particularly those who have been out of work for over a year and those that face significant disadvantage in the labour market, and will contribute a maximum of £6,500 for each job.

What’s new and exciting about this fund, aside from the scale of the investment (which CLG officials admitted they never dared hope for), is the fact that for the first time this fund will see central government using local government as the delivery agent for getting people back into work, rather than Job Centre Plus. This approach is a long-overdue recognition that local authorities, working with other local partners, are best placed to understand local labour markets and get people into jobs. Credit for this revelation in Whitehall must go to Barnsley MBC Leader Stephen Houghton, whose review of the contribution and role of local authorities and partnerships to tackling worklessness, published in March, forms much of the evidence-base for this approach.

The fund seeks bids from anyone, including charities, social enterprises, or the private sector, but officials envisage this as ‘primarily a fund for local government’ and expect the majority of bids to be led by local authorities, sub-regional, city region and local partnerships.

Bidding criteria is quite broad, which is welcome. Bids simply need to demonstrate that the jobs created are new, and would not exist without the funding. Ministers were keen to deny that this was a ‘make-work’ scheme, but that the principle behind it is to stimulate new employment opportunities in deprived areas. The focus is on young people who have been on Job Seekers Allowance for a year and bidders are asked to identify unemployment ‘hotspots’ in their area. Bids must also demonstrate that the jobs will last at least 6 months, although will preferably be for longer.

Crucially, the work done should benefit local communities. New, innovative and ‘bottom up’ programmes are sought, particularly those that work with community groups and social enterprises. Employment areas such as sports, social care, the environment or community safety are particularly favoured, with Ministers keen to avoid a return to stigmatising YTS approaches of the 80s. Pooling and aligning the money with other funding such as the Working Neighbourhoods Fund or the European Social Fund will also encourage a favourable view of bids.

While the urgency of action and the broadness of criteria are wholeheartedly welcome, the timescale is incredibly quick. Bids must be submitted by the end of June and ministers would like to see people in these jobs by October – no easy feat when partnership and aligning funding streams are such critical elements of the bids. There are fears that the process will not allow sufficient time for groups to get properly considered bids in. Local authorities must work quickly if they are to access this money and make the most of such an unprecedented opportunity.

There is also a wider issue about what this means for proper long-term reform of our employment and welfare system. It’s great to see the government responding so rapidly and, dare I say it, generously, getting money straight to the front-line, circumventing traditional bureaucracy and departmental timidity. Yet this feels like a very isolated grant-based approach and still remarkably centralised, with local government bidding to central government for a pot of money. Our employment system needs real, long term systematic reform and a sustained approach to devolution, particularly over issues like commissioning and funding flexibility.

Despite these longer-term concerns, however, local authorities ought to follow the example of our MPs and not look a gift horse in the mouth. There is a real chance that this fund can become a powerful catalyst for sustained reform. If local authorities can deliver this agenda well, then this can only strengthen their hand in seeking greater devolution of DWP powers. But more importantly, there is a real chance here for councils to take a leading and vital role in getting young people back into work and ensuring the potential of a future generation is not written off by this recession.


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