We Can Work It Out

Posted by Nick Hope, Senior Researcher, NLGN on January 12th, 2010

The economy has been dealt a severe body blow. It will not be easy to get our country back on its feet and, when we do, it must be stronger and more competitive if we are to compete with the ever-stronger global heavy weights. To achieve this will require nothing less than a transformation of our employment and skills system.

Without wishing to stretch the boxing analogy, we must be leaner; which will require us to strip out the complexity and bureaucracy of the current system. We must be more responsive; both to the needs of citizens and business. And we must intervene earlier and be more tactical; so that we can create and exploit opportunities for growth and prosperity.

In NLGN’s latest report ‘We Can Work It Out’, we make a series of recommendations on how this can be achieved – calling for a far more integrated, devolved and strategic approach to employment and skills governance.

We argue that democratically elected councils must sit at the heart of a complex ecosystem of services and must develop their role in order to ensure greater co-ordination of support for people at the frontline. Skills quangos at the regional spatial tier should be streamlined to cut out the complexity of the current system, and local authorities must take the lead in commissioning welfare-to-work programmes from the corridors of Whitehall.

To be in a position to take on these new responsibilities, councils must work much more in collaboration, so that they match functional economic sub-regions and better encompass the area in which citizens live their lives and business tend to operate. The challenge of pooling sovereignty should not be underestimated and the step-change many councils will have to make to the way they work will be tough, but institutional convenience must be of secondary concern.

In the report we also argue that policy makers need to move beyond the concept of “demand-led” skills, where employers and learners drive learning but risk perpetuating a short-sited approach that can reinforce industrial weaknesses. We call for a move towards a “place-led’ skills era, where funding is directed in a way that takes greater account of on an area’s unique assets, characteristics and economic potential. Local authorities must take the lead in this new era, working collaboratively to orchestrate opportunities and drive economic growth.

We suggest that learner-led ‘skills accounts’ could be reshaped to act as the mechanism through which individuals are empowered with more choice over the training they receive and, at the same time, councils are given a greater democratic strategic steer. With such a system, councils would be able to vary the level of public subsidy for different skills training options based on current and future local economic needs.

For example, a local authority seeking to diversify the local economy, in order to make it more resilient in the future, may wish to increase jobs in the communications technologies sector. Through ‘skills accounts’ they would be able to direct funding to meet the skills needs of that particular industry, so that growth opportunities can be maximised.

Matching the supply of labour to current employment vacancies is essential, but not itself sufficient in the face of the economic challenge before us. We must reform our employment and skills system so that it can better equip people with new skills, stimulate job opportunities and, for those who face the greatest barriers to the labour market, we must provide far more personalised and intensive support.

If we fail to act urgently, we risk repeating the mistakes of the past where previous recessions left us with legacies of wasted lives, cultures of dependency, low aspiration and intergenerational poverty. Whole communities could be scarred.

The recession has presented us with renewed impetus to reform our economy in order to secure long term prosperity and ensure that no one is excluded from the opportunities that this will present. However, to realise this ambition we must take a far more local path. Many councils will find this new local economic and skills activist role hard, and it will perhaps be even harder for Whitehall to accept, but local authorities are uniquely placed to provide the leadership our communities need to work there way out of this economic downturn.


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Comments

  • ANM

    The radical thing to do is to abolsih Job CentrePlus and give all the fudning for the benefits they administer, together with the budget for adminsitartion to Local Authorities.To ccompany this, LAs should be given a statutory duty to end economic inactivity (similar to their statory duty to house the homeless). In an encouraging way, Benefits can then be paid through Partners, Charities and/or provate company payrolls to help fund training, internments, apprenticeships, short term work assignments, etc. They can also be used for compulsion because they can be paid through council payrolls where long term unemployed people are put to work on community activities and projects. Councils can tie housing and school places to employment, thus promoting and enabling mobility. Nobody should have the right to remain econcomically inactive indefinitely. We, the local community, will gain control of this benefits budget, look to our councils to bring economic inactivity to and and we will judge them at the ballot box on how well they have done in ending the something-for-nothing benefits culture. Councils can use these massive budgets to promote economic activity and encourage inward investment from prospective employers.


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