Workshop: Local Economic Development and Skills Under Austerity

In this post, Jonathan Payne reports back on a two day workshop on local economic development (LED) and skills policy under austerity held by the Centre for Urban Research on Austerity (CURA) in May.

The workshop brought together leading UK academics in the areas of LED, governance and skills to debate the changing institutional landscape around LED in England and the opportunities and constraints afforded by policy commitments to ‘localism’. This afforded a rare opportunity for academics interested in economic geography, local governance and skills to come together and discuss how the ‘localisation’ agenda is playing out in practice.

As Ewart Keep argued, for the last thirty years skills policy in England has tended to be a national project, focused on generalised workforce upskilling in pursuit of government targets. With government now promising to devolve more of the adult skills budget to local areas, there are questions around how much autonomy local areas will have and what level of resource they might draw on. Furthermore, past experience would suggest that a narrow focus upon education and training, or boosting the supply of skills, runs up against problems of weak employer demand for skill, linked to the way many firms in the UK compete, design jobs and manage staff. This is reflected in a high proportion of low skill, low wage jobs compared with many other advanced European countries, relatively low productivity, and problems of ‘over-qualification’ and ‘under-utilisation of skills’ within the workplace. As the UK Commission for Employment and Skills has argued, there are limits to what boosting skills supply can achieve on its own without wider measures to influence the ‘demand side’. The latter requires effective measures such as industrial policy, economic development and business improvement to grow the proportion of high skill jobs and upgrade the skill content of work more generally. Skills policy might work better if integrated and joined up with such activity.

The role of local enterprise partnerships, city-deals and combined authorities is clearly of relevance here for a number of reasons. First, government is promising to ‘empower’ local communities through these mechanisms to drive LED. Second, skills policy is being localised and skills often figure prominently within this agenda. These claims are controversial, particularly in terms of how ‘real’ localism is at time of funding cuts. However, localism is also a moving picture, and if skills and economic development are to be integrated as part of a more holistic approach, then this is one of the few areas where we might look for examples of progress (or not).

Many issues came to the fore during these discussions: the tendency for LED governance to bounce back and forth between different scales and for policy to ‘keep failing forwards’; the uneven capacity of LEPs; the role of power in devolving ‘risk’; the need to understand how local actors comprehend their situation and what motivates their engagement; the tendency for policy to eschew interventions inside the ‘black box’ of the firm; and the question of what ‘localism’ can tell us about the ‘neo-liberal state’ in a period of crisis management and the narratives it constructs. What is clear, however, is that research will be better placed to address such issues where academics work across disciplinary boundaries. LED, governance and skills are an example of one such interface where collaboration is likely to prove particularly fruitful.

Jonathan Payne is Reader in Employment Studies at De Montfort University and a member of CURA (Centre for Urban Research on Austerity) as well as CROWE (Contemporary Research on Organisations, Work and Employment

Participatory Budgeting: Shining light on the well manicured hands on the public purse.

Jez Hall from the Participatory Budgeting Network argues that the costs are spiralling of a public service culture that is focussed on acute interventions, increasingly relies on private delivery and is driven by the interests of professionals. He argues that participatory budgeting is a tool that can deliver fiscal responsibility and make services more focussed around the needs of citizens.

Advocates for more citizen participation usually discuss Participatory Budgeting, (and similar ideas for direct democracy) as a democratic enhancement – something about fixing democracy, trusting in politics or getting involved. It is as though involvement is the aim.

But a too often undervalued dimension is the cost benefit of participation. We live in expensive bureaucratic systems, where the recurring costs of services make no sense to ordinary people. I believe we need to raise the debate when looking at the different public service choices. Because, from observing Participatory Budgeting  (PB) in action, when given a choice, and good information, and a chance to deliberate ordinary citizens back prevention over an often ridiculous status quo that wastes money and blights lives by focussing on the wrong end of the system. When there is pressure on public budgets it matters who has a say, and who sets the agenda.

Here’s an interesting set of statistics:

It costs £65,000 to imprison a person in this country once police, court costs and all the other steps are taken into account. After that it costs a further £40,000 for each year they spend incarcerated.” £100,000 for a one year prison sentence. Once you have been into prison you are pretty likely to return. Or suffer limited employment opportunities for your whole life, and you and your family more likely to become dependent on welfare.

Private sector outsourced care for at risk young people can be much expensive and the outcomes often little better. “There are differing views amongst commissioners about the relative costs of their own children’s homes provision to those of the external providers. The DfE Children’s Homes data pack (December 2014) concluded that average unit costs are … around £2,900 per week”. A 2013 survey indicated the most common cost of high intensity outsourced care was £3,000 per week, rising in rare cases to £6,000 per week. That equates to between £150,000 to £300,000 per year.

Then, at the other end of the spectrum, it costs about £5,000 per year to provide a school place in a city like Manchester. So one year of a young person attending school costs about the same as spending 2 weeks in prison, or maybe just a week in intensive residential care.

In health the story is much the same. The unit cost of attending an A&E department is far higher than seeing a GP or community based health worker. This statistic is out of date but still relevant. In 2010 to walk through the door of an A+E department for a brief consultation cost over £125. That’s before receiving any treatment. Yet I, and probably most citizens of the UK, used to free at the point of delivery healthcare, are horrified by the prospect of paying £25 to see a GP, as proposed by the Kings Fund in a report in 2014. An influential think-tank has recommended the Government considers charging patients up to £25 for a GP appointment, becoming the latest in a series of recent reports mooting the controversial move.”

Best keep people out of prison, hospital and children’s homes then. That requires prevention, something that can only be effectively delivered outside these expensive institutions and within communities. Neighbourliness, good employment, education, and stable families matter a lot, but sometimes it takes professional support to prevent the most at risk going off the rails.

Now, I wonder how much employing a trained youth worker costs? The answer is around £21,000 a year – rising to about £35k max – there will be some on-costs on that basic figure, but it gives us a perspective.

And a prison governor earns upward of £180,000 for a difficult high security prison, but more normally “salaries for qualified operational managers start at £32,000 a year, while more senior managers (including governors) can earn around £60,000 pa. It’s a professional salary, but hardly ‘riches beyond the dreams of avarice’… Of course, there are other benefits, including a civil service pension.” A judge earns £130,000 or so. And judges are most unhappy about it. Almost a third of judges, 31%, said they would consider leaving early in the next five years. The proportion was even higher for high court and appeal court judges. Declines in pay and pensions were the main complaints. Nearly four-fifths said incomes now and after retirement do not adequately reflect the work they do and that they had suffered a loss of net earnings over the past five years.”

It’s tough looking down on society from the top. If the people involved in commissioning services are the people already managing, running or benefiting, there is an obvious bias to backing their own professional approach. That isn’t corruption. It’s human nature. Yet, however well intentioned and informed they may be, it is a capturing of the system by those already benefiting most from it. As a leading public health manager for a big city once said to me “prisons exist to pay for prison staff pensions, and hospitals to pay for consultants golf club memberships”.

This might be a little unfair. But if you care, and professionals in the public sector do care, without a robust process of challenge there is no strong incentive to reduce one’s own role. We have become wedded to expensive sticking plasters that may contain but don’t prevent problems. This was clearly identified in a 2011 report on the future of Scottish public services that raised the problem of ‘producer dominance’. Basically public sector commissioners, left to their own devices, prioritise existing approaches, and de-prioritise prevention. Government remains the dominant architect and provider of public services. This often results in ‘top-down’, producer- and institution-focussed approaches where the interests of organisations and professional groups come before those of the public.”

Maybe PB can shine a light on that problem – and save taxpayers a bit of money. Putting one less person in prison for a year could pay for at least 3 youth work posts – and who knows how many hundreds of hours of volunteer time at a community based youth club. Each youth worker, properly supported, could prevent a young person being abused, or going to jail. If they stopped just one conviction or referral per year each, then prevention is still a great investment.

Of course there may be lots of solutions, like funding voluntary and community sector providers. Though we need to be careful. The lesson of the Kids Company is that these decisions can’t just be left to politicians either. Despite lacking robust evidence about the quality of the charity’s outcomes, value for money or governance, Kids Company attracted high profile support from senior Ministers throughout successive Governments, and tens of millions of pounds of public money have been handed to the charity over the course of its existence.[1]

Whilst I believe in high quality, preventative public spending, that doesn’t mean the money can’t go outside the public sector. But when it does, either to ‘not for profits’, or private sector provision citizens need to be aware of the cost and benefit of that choice. If they were, I doubt that private financing would be as widespread as it is, given its costly nature.

Participation is not just about validating pre-determined choices of so called experts. It is about deliberating between options, suggesting new approaches and making more informed choices. So let’s have a better approach than tick box consultations. Let’s shine a light on some of these costs. Open up how we make these decisions and let the people decide?

Jez Hall is a founding member of Shared Futures. Jez helped found the PB Unit in 2006 and has since then remained a committed advocate of Participatory Budgeting.

PhD Opportunity at CURA: Securitisation in Urban Policy Making

CURA are delighted to offer a PhD scholarship on Securitisation in Urban Policy Making. The scholarship is available for up to three years full-time study starting October 2016 and provides a bursary of £14,296 PA in addition to University tuition fees. It is available to UK or EU students who are suitably qualified and have outstanding potential as a researcher. Deadline for applications is 29th March 2016.

In offering this scholarship the University aims to further develop its proven research strengths in urban governance, austerity and crises. It is an excellent opportunity for a candidate of exceptional promise to contribute to a stimulating, world-class research environment. The post holder will be contributing to CURA’s interest in crisis and securitisaton in urban policy-making. Interested candidates need to submit a 1500-word proposal addressing one or more of the following issues:

• Are subnational levels of government impacted by national security policy and what are the implications for urban governance?

• How do different ‘modes of governance’ incorporate coercive strategies in urban policy-making process?

• What power relations are developed between state and non-state actors in the securitisation of urban public policy?

• To what extent do community cultural practices infuse meaning to government practices in contexts of violence and insecurity?

Proposals with a focus on countries in Europe and/or the Americas will be preferred, but proposals conducting research in other world regions will be considered.

For a more detailed description of the scholarship, the subject area at DMU and an application pack follow this link. Completed applications should be returned by 29th March 2016 with two supporting references and an academic transcript. Applications are invited from UK or EU students with a Master’s degree or a good first degree (First, 2:1 or equivalent) in a relevant subject. Please quote ref: DMU Research Scholarships 2016: BAL FB1.

Please direct academic queries to Dr Valeria Guarneros-Meza on +44 (0)116 2577038 or by email on valeria.guarneros@dmu.ac.uk. For administrative queries contact Morgan Erdlenbruch at Morgan.Erdlenbruch@dmu.ac.uk

Application deadlinePlease quote ref: DMU Research Scholarships 2016: BAL FB1.

Learning lessons: we need to encourage more policy sharing and less innovation

Sophie Wilson from the Institute for Government argues that there is too much focus on innovation in public services, and the we should focus more on learning from, and expanding, ‘what works’.

We all like new things. Whether it’s the latest gadget or an app to switch your heating on remotely, innovations are exciting. And this is no different in public services. Countless innovation funds and piloting programmes encourage local areas to develop and test ideas ranging from government initiatives such as the Transformation Challenge Awards through to programmes led by the voluntary sector like those available to social entrepreneurs from UnLtd. Without funding for early stage ideas you don’t get things off the ground.

So while there’s no denying the importance of trying and testing new approaches to public services; the emphasis on innovation over duplication means local areas may risk repeating the same mistakes or focusing resources on challenges that have already been solved elsewhere. This is something picked up on in the Institute for Government’s paper Joining up public services around local, citizen needs  which highlighted how a limited sharing of ‘what works’ in different circumstances can mean that the lessons from effective practices are rarely built upon (see p.12). Barbara Young, formerly chief executive of Diabetes UK, has also consistently argued the need for more plagiarism in the voluntary sector. In this way, encouraging more areas to copy instead of create could be a route to efficiency savings as well as better services for citizens.

Blunt replication of programmes or strategies from one local area into another is unlikely to be the solution to the challenges facing public services today. However, there are opportunities in increasing the diffusion of effective programmes through the sharing of innovations, ideas and practice, and the subsequent adoption or adaption of these ideas in a new local area. It is unlikely that a programme can, or should, be scaled up and rolled out across the country in exactly the same way. Local areas are different and public services should be able to cater for this diversity as recognised by the Government and its devolution agenda. But, greater sharing between local areas around how they can implement a new programme, the barriers and enablers to doing this, the resources and capabilities needed, as well as links to useful contacts could help areas to shortcut parts of their design process and help to save time and money. Context matters. Nevertheless, applying what we already know and adapting this with a new environment in mind can support local areas to build upon existing practice and avoid reinventing the wheel.

In fact, local areas are already doing this; whether getting ideas from conferences, participating in professional networks like SOLACE, or independently setting up visits to areas that appear to be doing something interesting. But, this is not yet something that systematically occurs across local government; whether because of a distinct professional culture or cultures, transport links, misaligned incentives, a lack of time or one of a myriad of other factors.

In response, the Institute for Government are starting to think about how to encourage greater sharing of practice between local areas. This has begun with a look at some of the intermediary programmes and organisations that connect local areas with each other or with interesting practice and ideas such as the LGA peer challenges, the Audit Commission or the seven What Works Centres. We want to understand what limits local areas from sharing more frequently, and increase attention on the diffusion process itself as an important, under recognised means of supporting areas as they redesign or recommission services.

As is often pointed out, devolution provides an opportunity to innovate by designing services around local, citizen needs. But increasing localisation also increases the importance of finding effective ways of sharing practice between local areas to make sure learning spreads throughout the country. This is especially important in the context of tightening budgets and increasing demands. Copying from your neighbour may have been frowned upon in the classroom, but it is an essential part of designing a smarter state.

Sophie Wilson is a researcher at the Institute for Government. If you’re interested in hearing more or contributing to the research she is involved in, take a look at the IfG’s project page or get in touch with her at sophie.wilson@instituteforgovernment.org.uk