A group of 23 ‘co-operative’ councils, including Liverpool City Council, are urging the government to devolve part of its back-to-work programme to a local level, amid widespread disappointment at the ability of Whitehall to help the long term unemployed and other ‘harder to help’ groups get back into work.
In a report published today, the Co-operative Councils Innovation Network (CCIN), said that locally-led cooperative employment schemes are far more effective at getting people back into jobs.
The group said that devolving powers to a local level would allow for a scaling up of successful cooperative approaches, and estimated this would stimulate the creation of 90,000 jobs and reduce the cost of employment programmes by up to 25 per cent (saving £500 million).
The CCIN pointed to a recent report from the Public Accounts Committee which found that the DWP has not succeeded in incentivising Work Programme providers to support harder-to-help claimants into work, with almost 90% of Employment and Support Allowance claimants on the Work Programme having not moved into jobs.
This is despite their numbers having risen significantly since 2011 – a quarter of people who entered the Work Programme in September 2014 were on ESA, compared to just 3% when the scheme first began.
In their report, Unlocking Our Wealth, the 23 councils argue that devolving the adult skills budget and employment support would help local authorities to provide better assistance to harder-to-help claimants, often those with a range of disabilities and mental health challenges.
The councils concluded that in contrast with Whitehall, local cooperative approaches, designed around people’s needs, can have far greater chances of success, with a social return on investment of £3 for every £1 invested. Examples include:
• Business in the Community’s Ready to Work programme, which leverages public sector funding to attract private sector resources to support homeless people into employment. The effectiveness of this cooperative approach to employment support for disadvantaged groups is such that were it to be scaled up nationally we could secure job outcomes for participants at between 25 per cent and 40 per cent less cost per person.
• Liverpool Schools Investment Programme, which is seeing 12 new schools being built and over 60% of construction jobs going to local people. This compares with only 20% of jobs going to local people with the previous Building Schools for the Future Wave 2 programme run by a central government quango.
• The Liverpool City Region’s Youth Employment Initiative, which will see £19m invested to help thousands of young people across the City region get back into work.
At a launch event for the report, the 23 cooperative councils are calling on the government to trust them. The council leaders say that they “know their areas, they know what works, what matters and how to get things done.” But they need the power to implement locally designed solutions, and providers to be freed up from national targets so they can focus on local impact.
The councils argued that at the moment budgets are locked up in different agencies and institutions each working to national priorities. Services should instead be commissioned locally by people who know what is needed in their patch, the report said.
At the event, the councils pledged to strike new local deals with 1,000 businesses to help get more people back into employment, promising to do more to get businesses involved in the leadership of their local area, and to use their buying power to promote innovation and collaboration amongst local businesses and social enterprises.
Today’s report is the product of a six-month policy commission on community resilience, jobs and growth that took in evidence from job-seekers, businesses and councils up and down the country. The councils propose that three new cooperative deals be struck by local authorities:
• A new deal with job-seekers, based on relationships with them as individuals
• A new deal with businesses, based on genuine partnership and quid pro quo
• A new deal with government, based on what works and trust
Together, the group of 23 councils represent five million citizens, with 97,000 people on Jobseekers Allowance. Of these, 29,000 adults might be described as hard-to-reach, because they are long-term unemployed. They also represent a further 310,000 individuals on ESA and incapacity benefits, with over half a million (508,000) individuals on out-of-work benefits in total.
Liverpool’s cabinet Member for Employment & Skills Cllr Nick Small sat on the Policy Commission. He said,
“The Government’s flagship Work Programme isn’t working. We got a rigid national skills system is training young people for jobs that don’t exist, while employers face enormous shortages in other sectors. The same money would go much further if it were spent locally by local authorities who know the employment challenges in their patch.
“Cooperative councils are innovating, not waiting. But we need government to recognise that the status quo isn’t working. A package of funding, including money for skills, employment and health, should be devolved to councils to enable them to provide tailored packages of support to help those who are most excluded get into sustainable work.
“The adult skills budget should be devolved to local areas so businesses, colleges and training organisations can work together to equip our citizens with the skills that we actually need for future jobs and growth. Town Halls are better placed than Whitehall to unlock the wealth of talent there is in our communities.
“But it’s not just about replacement Whitehall with the Town Hall. Councils are already devolving to communities and individuals. This is about striking a new balance between government councils and communities.”