Skills policy briefings

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Skills policy briefings

In this section you can find our policy briefings that provide information on the latest policies affecting the skills and learning in voluntary sector organisations.

The briefings serve as a useful digest to allow you to quickly read about how government decisions and policies will affect you.

For more information about the briefing, please contact James McHugh, Skills – Third Sector’s policy support officer. The briefing is published fortnightly.

Comprehensive Spending Review

The below is a brief summary analysis of the 2010 Comprehensive Spending Review (CSR).


The Spending Review is a treasury-led process to allocate resources according to Government priorities. The entire process was overseen by the Public Expenditure Committee (“Star Chamber”) of senior Cabinet Ministers appointed by the PM and chaired by the Chancellor. This was also subjected to the opinions of the Independent Challenge Group made up of public service experts [1].

Following the June Budget, which set out the overall level of public spending for the next four years, the CSR allocated spending for all areas of Government activity. This includes the spending budgets for each department (Departmental Expenditure Limits or “DEL”) and a range of non-departmental spending, including social security (Annual Managed Expenditure or “AME”). After departmental expenditure has been announced, devolved administrations and local authorities will have to finalise their plans after the local government finance settlement in late November. Clearer details on the future of services and public sector jobs will emerge after that point.

The June Budget announced that spending is set to increase from £640bn in 2011/12 to £659bn in 2014/15. This takes into account general inflation and planned economic policy and amounts to a total of £83bn in spending cuts over a four year period. This is set against £29bn of proposed tax increases – a ratio of 74:26 [2]. Out of this total, £30bn were announced alongside the June Budget – including £11bn in welfare, £ from a freeze in public sector pay; £6bn in efficiency savings; and £10bn from lower debt interest payments. The government expenditure for 2010-11 is £697bn as opposed to £548bn in receipts, meaning large amounts of government borrowing. The plan will reduce borrowing from 11% in 2009-10 to 1.1% in 2014-15.

Later this year, each Government department will publish a plan for implementing the reforms, including key indicators against which to measure costs and impacts of its activities, although the CSR document states that it is not currently possible to subject the review to a full equality impact assessment.

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The framework for the Spending Review was initially laid out in June so there was a certain level of foresight prior to today’s announcements [3]. In introducing the CSR, George Osborne claimed that the proposals were supported by key economic bodies such as the OECD and IMF and that they would have a particular focus on reducing welfare costs and focusing spending on health, schools, early years and capital investment. Public spending in real terms is set to decrease to 2008 levels and will focus on supporting economic growth via private sector job creation, exports, investment, and enterprise.

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Departmental budgets

Following forecasted departmental cuts of 25%, the CSR made the unexpected announcement that the average cuts to departments would be 19% across four years (with the exceptions of Health and International Development). The main departmental budget projections for 2014-15 were as follows:-

  • BIS – decrease of 25%
  • Cabinet Office – increase of 28%
  • Communities & Local Government – decrease of 27%
  • Culture, Media & Sport – decrease of 24%
  • Defence – decrease of 7.5%
  • DWP – increase of 2.3%
  • Education – decrease of 3.4%
  • Energy and Climate Change – decrease of 18%
  • Environment, Food & Rural Affairs – decrease of 29%
  • Foreign Office – decrease of 24%
  • Health – increase of 1.3%
  • Home Office – decrease of 23%
  • International Development – increase of 37%
  • Ministry of Justice – decrease of 23%
  • Treasury – decrease of 33%

It is worth noting that the initial budgets of these departments vary widely between £9.87bn to £0.2bn so average reductions may be distorted by large increases to the budgets of relatively small departments such as the Cabinet Office and DfID.

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Education and skills

In terms of further education, the CSR was fairly bold. The entitlement to free training for a first full level 2 qualification (GCSE A-C equivalent) for those over 25 has been removed. Also, the work-based Train to Gain scheme was disbanded in its entirety and the Treasury has promised to explore mechanisms to increase employer contributions to training such as voluntary training levies.

Individuals over 24 have been promised the support of a Government backed loan to meet the tuition costs of a level 3 qualification (A-Level equivalent). Spending on Adult Community Learning will also be protected and reformed, although substantial details were lacking on this matter. Meanwhile, the growth in Apprenticeships gained more momentum with a promised 75,000 increase in adult apprenticeships with an additional £250m funding per year by 2014-15.

The full plans for Higher Education have yet to fully emerge following the recently published Browne Review. Higher Education is set to make up around 40% of total savings to the budget for BIS (25% decrease overall). Universities have been told that they are able to increase student contributions by the 2012-3 academic year (offsetting future reductions in the teaching grant) and that there will be loan support for part-time students for the very first time. A National Scholarship fund of £150m a year to support the most disadvantaged pupils to enter Higher Education was announced and the Government will decide whether to sell off Student Loan book in next year’s budget.

The schools budget is set to increase by 0.1% in real terms. A “fairness premium” worth £7.2bn over four years was announced, which includes the extension in free care and early education for the disadvantaged to two-year olds. Continued support for 16-19 learning was announced despite a proposed cut to the Educational Maintenance Allowance of 0.5% and reductions to the unit costs of 16-19 education. Reductions to the Department for Education’s non-schools budget will total 12%. Sure Start funding has been protected, however, as has £15.8bn of capital funding for school building via the previous administration’s Building Schools for the Future programme.

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Voluntary sector

The major announcement for the voluntary sector was the launch of a £100m “Transition Fund” which will be available over the short term to help medium to large organisations which are currently dependent upon the state but could make a continued contribution to public services. Alongside the Transition Fund, the Government has promised to direct around £470 million over the next four years to support capacity building in the voluntary and community sector, including funds to pilot the National Citizen Service and the launch of the Big Society Bank.

In terms of opening up service provision, the CSR promised to explore how to set proportions of specific services that should be delivered by non-state providers, including voluntary groups. This approach is to be utilised in adult social care, early years, community health services, pathology services, youth services, court and tribunal services, and early interventions for the neediest families. The Community First fund and Community Organisers also received the go ahead (but without details on how much funding they will receive or how many community organisers are to be trained).

Overall resource savings of 35% will be made to the Cabinet Office budget, which will largely consist of reductions in the use of consultants, back office services, and renegotiation of supplier contracts. The Office of Government Commerce and DirectGov will also move into the Cabinet Office. There will also be greater scope for personal budgets across a range of service areas including special education needs, support for children with disabilities, long term health conditions and adult social care.

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Welfare and pensions

The DWP’s proposed Universal Credit system is set to be introduced over the next two parliaments in order to simplify current benefits. There will also be £2bn in funding to help implement the welfare reforms announced in the June Budget.

Savings of £7bn a year are set to be made to the welfare budget through the a range of measures, including the withdrawal of Child Benefit from higher rate taxpayers (£2.5bn); reform of the Employment and Support Allowance (£2bn); and a maximum cap on the amount in benefits that the out-of-work may receive (£500 per week for couples or lone parents and £350 for single adult households) [4].

Other welfare measures which will create costs rather than savings include increases to Cold Weather Payments and the weekly Child Tax Credits. Increased action to prevent benefit fraud is also expected to lead to savings.

The state pension age is to rise to 66 by 2018 and there will be major reforms to public sector pensions following the publication of the Hutton Report. The Government will seek changes to the level of employee contributions to help deliver an additional £1.8bn of savings a year by 2014-15. Government will also launch a consultation on the Fair Deal policy, which currently acts as a barrier to voluntary sector public service provision due to complications around TUPE payments.

The Office for Budgetary Responsibility has forecasted that the public service workforce will be reduced by 490,000 in 2014-15. Action has been promised to encourage those who suffer from job losses to undertake reduced hours and help move into private sector employment.

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As anticipated, spending in the NHS is set to grow in real terms by 0.4% every year. Significantly, the CSR declared an additional £2bn by 2014-15 to support social care, half of which will be spent on the current Department of Health grant to local authorities for social care (the Personal Social Services grant). The NHS is also committed to £20bn administration and management savings per year to be reinvested in frontline service.

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Housing and Local Government

Major reforms were made to social housing as social landlords have been given the ability to offer short-term rental contracts to new tenants at levels between current and market rates (possibly around 80% of market value according to various media sources). The rates for existing social tenants are expected to remain the same but the changes are hoped to allow enough savings for the construction of 15,000 new affordable houses.

The Department for Communities and Local Government will lose 51% of its budget in real terms by 2014-15; although this will involve devolving £1.6bn of funds to local government. There will be a reduction to the number of Arms Length Bodies by 17. Programmes such as the Working Neighbourhoods Fund, Growth Area Funding and the Thames Gateway programme are all set to end, although the Supporting People Programme has been promised £6bn of funding over the CSR period.

All local government revenue grants will be removed from their ringfences by 2011-12, except for the simplified schools grants and a new public health grant. Community budgets will be established in 16 local areas to pool departmental budgets for families with complex needs, and rolled out to all local areas at a later date. The Regional Growth Fund to encourage private sector development is also set to be extended to 3 years and increase in value from £1bn to £1.5bn.

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Arts and culture

The Department for Culture, Media and Sports is set to reduce its overall administrative costs by 41%, including for Non Departmental Public Bodies, with many making savings of 50% (including Arts Council England). Cultural institutions such as museums will be given the opportunity to use money raised independently more flexibly and establish trust arrangements that enable them to generate funding from private sources. In addition, the Government will undertake a review of ways to increase philanthropic giving to the arts. Cuts to core programmes such as Museums, frontline arts projects and Sport England will also be limited to 15%.

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International Development

As anticipated, the Department for International Development escaped the spending cuts. A total of 0.7% of Gross National Income has been promised on overseas aid from 2013 in line with international commitments. A new Independent Commission on Aid will also be established in order to assess value for money on international development spending and future policy will be increasingly focused on boosting economic growth and wealth creation.

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Environment and Climate Change

The Chancellor spoke at length on the necessity of low-carbon initiatives to his plans of economic growth. The CSR has promised a range of initiatives aimed at higher level manufacturing but those with more relevance to the local and community-level include the £860m promised to support households to implement renewable heating and the creation of the long-promised Green Investment Bank with £1bn funding (plus further private investment).

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A useful glossary to terms used in the Spending Review may be found on the Treasury website.


[1] The sole voluntary sector representative on this body was Kevin Curley (CEO of NAVCA).
[2] In contrast to this, the Labour party’s proposals were to balance spending cuts and tax rises in a ratio of 60:40
[3] Indications of its content were also inadvertently leaked when Chief Secretary to the Treasury Danny Alexander was photographed reading a draft which indicated 490,000 public sector job losses by 2014-15.
[4] This will be with the exceptions of all Disability Living Allowance claimants, War Widows, and working families claiming the working tax credit.

Policy Briefing 27 September 2010

The conference season got underway in mid-September with the TUC Congress which was addressed by the Governor of the Bank of England, Mervyn King, who appeared in the absence of any government minister. King used his speech to plead for patience from union members who were “entitled to be angry” in the wake of a financial crisis caused by the financial sector and policy-makers. The governor also reiterated the need to rebalance demand, restructure banking, and restore the sustainability of public finance in order to ensure a return to high growth and employment.

Next on the list was the Lib Dem conference in Liverpool. Party leader and deputy PM Nick Clegg addressed the conference with a 37-minute speechwhich argued that the coalition’s “liberal plural politics” would be marked by its achievements in achieving fiscal stability. Meanwhile, Vince Cable used his speech to launch an unyielding critique of the “murky world of corporate behaviour” in which “spivs and gamblers” pay themselves outrageous bonuses underwritten by the taxpayer. On a more sanguine note, Cable did stress the importance of vocational training and apprenticeships to the new government. Although wholesale rebellion was not evident, there was conflict over the coalition’s education policy as party members voted to campaign against the Academy and Free School policies on the grounds that they risk “increasing social divisiveness and inequality”.

The Labour leadership contest finally reached its conclusion with Ed Miliband triumphing over his elder sibling David in a slender victory of 50.65% to 49.35% of the final vote. The tight nature of the decision was heavily dependent upon union backing as David Miliband proved the most popular first choice among MPs and party members. Following the election of a new leader, a new shadow cabinet must be voted in by 10 October. The decisions over cabinet posts will prove a daunting task for Ed Milband as he tries to placate former cabinet ministers and fellow leadership contenders. The appointment of the junior Miliband bodes pretty well for the sector given his proven history of involvement dating back to his role as minister for the Third Sector back in 2006.

In other news, the Telegraph leaked a Cabinet Office memo with details of the 177 public bodies to be scrapped by the coalition. Also, a survey conducted by the BBC and the Bureau of Investigative Journalism revealed that over 9,000 public sector employees earn more than the prime minister’s salary of £142,500.



  • Skills Funding Agency CEO’s Speech

Geoff Russell, CEO of the Skills Funding Agency warned further education leaders that swift action was required to prevent institutions from becoming financially unstable. Russell spoke of two fundamental changes – public service reform and the fact that “the money is running out”. The FE sector could respond to the first of these new agendas by ensuring that learning is driven by student choice and provision is based upon robust information of local skills needs. Russell also spoke of the need for greater collaboration in both frontline and back-office functions to ensure survival in a time of reduced funding.

  • NIACE Consultation Response

The National Institute for Adult Continuing Education has published its responseto the government’s ongoing consultation on further education. The response stresses the need to ensure accessibility for adult learners and part-time students; the maintenance of a broad curriculum with opportunities for progression; maintenance of a diverse provider base; and responsiveness to social as well as economic needs.

  • TUC Consultation Response

The Trades Union Congress has also published its response to the government’s ongoing consultation on further education. The TUC warns that the proposed cuts to training subsidies will make lifelong learning increasingly unaffordable for unskilled workers. The submission includes figures which show that only one in ten unskilled workers receive regular training at work, whilst over ten million employees receive no training whatsoever. It also stresses the role of the 25,000 plus union learning reps in delivering skills in the workplace.

  • Jobseekers Held Back by Qualifications

A third of jobseekers believe that they are held back by a lack of qualifications according to a recent survey of 4,064 jobseekers by the Home Learning College and Reed recruitment consultants. This has led more than half (54%) of the jobseekers to consider further study to boost their employment prospects. Other challenges faced by jobseekers included the sheer volume of candidates applying for each position, a lack of jobs in their local area, lack of experience, being too specialised and not being specialised enough.

  • CBI Spending Review Response

The Confederation of British Industry has published its response to the Spending Review. The response is broad and covers a range of areas, including skills. The response argues that skills funding should focus on level 2 and below; public funding for training should be targeted at hard to reach firms; and there should be an increase in the number of employer-led apprenticeship schemes.

  • Colleges Face Broad Cuts

The Times Education Supplement has warned that colleges could face up to 80,000 job losses and see up to 800,000 student places lost in the forthcoming spending review. The Association of Colleges has briefed principals that the Government is planning cuts of 25% and 40% over four years for its adult skills budget. There are also fears that budgets could see a further cut with the Treasury removing £400 million for unemployment programmes and apprenticeships given over the last two years.

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  • Quango Cuts: 177 Bodies to be Scrapped

The Telegraph has leaked government plans to abolish at least 177 quangos. The full list includes Capacity Builders; Commission for Rural Communities; Commission for the Compact; General Social Care Council; the General Teaching Council; the Qualifications and Curriculum Development Agency; and Sustainable Development Commission. Meanwhile, the list of public bodies still under review includes the Children’s Workforce Development Council; Community Development Foundation; the Equality and Human Rights Commission; Homes and Community Agency; Office for Fair Access to the Professions; Student Loans Company; and the Young People’s Learning Agency.

  • Future of the QCDA

Education Secretary Michael Gove has outlined the revised remit for the Qualifications and Curriculum Development Agency following May’s decision to abolish the body. A letter addressed to the Agency illustrates its key responsibilities over the coming year in transferring its appropriate functions to the Department for Education, BIS and Ofqual. Key functions include evaluating and maintaining the quality of foundation learning and functional skills as well as support for Key Stage tests and general qualifications.

  • Private Sector Pensions

Research published by DWP on pensions has revealed that 82% of the for-profit workforce is covered by companies that provide pensions. The proportion of firms offering pension provision has fallen over the past three years, however, with the most commonly cited reasons being that the organisation was too small (36%); provision was too costly (15%); or staff did not want it (13%).

  • Royal Mail Employee Shares

The Royal Mail is set to distribute at least 10% of its shares to its employees. Under proposals the Post Office will not be sold but Royal Mail will be opened up to private investment and “commercial discipline”. This follows the recommendations of a recent report on how the mail service may modernise to suit the digital age.

  • Work Programme online forum

The government’s proposed reform of welfare services, the Work Programme, has been opened up to online discussion. Topics for discussion include, giving providers freedom to personalise support; paying providers by outcomes; paying more for people who require the most support; and moving customers onto the Work Programme.

  • 2012 Olympic Volunteers

Applications are now open for generalist volunteers to work at the London 2012 Olympics. The games will require a total of 70,000 volunteers covering such areas as welcoming, checking tickets, and stewarding events.

  • Estimates of Rough Sleepers

Following consultation, the government has changed the way local areas quantify the number of homeless people to more accurately assess the scale of the problem and give councils and charities more responsibility. All local authorities will now be expected to publish figures but will be able to develop ways of measuring this with the local VCS. New guidance is available here.

  • Children’s Health

The Government has set out a new vision for the health of children and young people, “Achieving Equity and Excellence for Children”. The vision has a focus on personalised services, availability of age-specific information, the centrality of children and young people to the design and delivery of services, and improvements measured by outcomes. The vision follows the publication of a report by Professor Ian Kennedy which advocates for greater investment in early years healthcare.

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The voluntary sector

  • Renewed Compact

Compact Voice has opened consultation on a renewed Compact which will aim to be more accountable and effective. The renewed document will aim to be easier to use and understand, aligned to emerging policy priorities, and able to deliver better partnerships. A draft text has been prepared by Compact Voice and The Office for Civil Society.

  • Charities’ Ageing Workforce

The Chartered Management Institute and Chartered Institute of Personnel and Development have found charities “woefully under-prepared” for the impact of an ageing workforce. The report, “Managing an Ageing Workforce”, based on 128 responses from not-for-profit sector leaders, found that only 15% of managers of not-for-profit groups consider their organisations well prepared to cope with an ageing workforce and that board-level recognition of such issues is non-existent among 39% of organisations.

  • Charities fail to Measure Impact

A guide published by the third sector consultancy, the Guild, suggests that many charities do not have the resources to carry out complex impact measurements, such as a social return on investment, and should instead use simpler tools or pick and mix a range of practical tools.

  • Impact Coalition Manifesto

The Impact Coalition have published a manifesto which aims to improve the levels of accountability and transparency across the voluntary sector. The manifesto argues that charities should strive to measure and communicate their impact in order to generate greater trust among stakeholders; increase understanding of what the organisation does and how it achieves it; drive performance; and motivate staff.

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Think tanks and research

  • RSA: 020 Public Services

A report published by the 2020 Public Services Trust, a project based at the Royal Society of Arts, has called for “a new culture of democratic participation and social responsibility” in which citizens are increasingly expected to deliver their own services. According to the report, the roll-out of measures such as public service cooperatives and neighbourhood commissioning of services will help relieve some of the pressures associated with fiscal restraint and increased demand on public services. Such reforms, however, will prove unsustainable without initial investment and greater transparency of information.

  • IPPR: Welfare to Work

A report recently published by the Institute for Public Policy Research argues that despite a promised devolution of power, the Coalition government’s proposed Work Programme does nothing to change one of the most highly centralised welfare systems in the world. The report suggests that power will be placed in the hands of a few large providers and will stifle the fine-grained local knowledge and intelligence needed for a successful welfare programme.

  • Labour Force Survey

This month’s Labour Force Survey has uncovered a rise in employment but a flatlining of benefit claimants. The survey shows that whilst unemployment has risen 286,000 (0.4%), the rate of people claiming Job Seekers’ Allowance has remained stable (4.5%).

Policy Briefing 31 August 2010

The 18th August 2010 marked the first 100 days of the coalition government, giving rise to much reflection on how the political landscape has been shaping up over the past few months. Opinion polls by ICM and Ipsos Mori suggested that the Coalition Government has been fairly successful with the public (despite a sharp drop in support for the Lib Dems).

The Chancellor of the Exchequer, George Osborne, chose to mark the occasion with a speech on economic growth in which he branded those who oppose public spending cuts as “deficit deniers”. Meanwhile, Nick Clegg used the occasion to proclaim the importance of social mobility to the policy agenda. In other news – businesses supplying services to the public sector were shown to be collapsing at an ever increasing rate; the outsourcing firm Serco reported a 20% rise in profits; and the Treasury locked horns with DWP over where the money to implement welfare reforms will come from.

In the world of education, the publication of A level results and the increased demand for places caused an estimated 170,000 students to miss out on a place in Higher Education this year. This is likely to place greater strain upon further education due to increased interest in vocational learning and college courses at a time in which funding looks certain to be reduced. Coincidentally, this week also saw the launch of National Colleges Week – an initiative to promote the vast social and economic contribution of colleges to new audiences.




  • A-Level Students face disappointment

Around 200,000 out of 660,000 university applicants will not achieve a place at university due to increased demand. Figures from the Universities and Colleges Admissions Service (Ucas) show that interest in higher education courses has risen by 11.8% this year, with more than 170,000 students missing out on a degree-course place. Universities minister David Willetts has advised unsuccessful applicants to look for other routes such as foundation degrees or apprenticeships.

  • Call for Informal Learning

BIS have launched a call for an increase in informal workplace learning. The call follows the pledge by a group of sixty-four companies, including McDonalds and BT, who have pledged to increase informal training opportunities for their workforce. This forms part of the department’s “Cafe Culture Movement” which aims to help organisations to see the benefit of informal employee training. The intention is to allow employees to meet and share ideas in a relaxed environment.

  • Review of Offender Learning

BIS have launched a review of offender learning which covers learning on custody and in the community. The review will inform forthcoming work between BIS, DWP and MOJ to inform the forthcoming “Rehabilitation Revolution” green paper to be published in November. The review will try to better link learning, reduced re-offending and employment.

  • Learning Accounts evaluation

An evaluation of the skills accounts trials has just been published. The evaluation tested their use with low-skilled individuals, the unemployed and Level 3 learners. The percentage who felt that skills accounts were a good idea was very high (94%). However, while skills accounts were found to give lower ability learners more confidence, low IT skills prevented many from using them without assistance.

  • Higher Education cuts?

Higher Education could face 35% funding cuts over 2011-2015 according to reports about a meeting between Cabinet Secretary Gus O’Donnell and university vice-chancellors. In this scenario the annual level of funding per student would fall from £5,411 to £3,537 if cuts to teaching, research and capital funding were shared equally.

  • National Student Survey

Student satisfaction with undergraduate courses has stalled at 82% according to this year’s National Student Survey. The survey of 252,000 students, published by HEFCE, revealed that the top three universities in terms of student satisfaction were Buckingham (95%), Belfast (94%) and the Open University (93%).

  • ACEVO/TSNLA Events

The Third Sector National Learning Alliance and ACEVO are hosting two joint events for members in order to produce a response to the Coalition Government’s current Skills consultations (policy and funding)– in London on the 14th September and in Sheffield on the 17th September.

  • Employer Responsive contract

The Association for Learning Providers, 17 Group and Association of colleges have won regional contracts from the Learning and Skills Improvement Service to run the Employer Responsive programme. The focus of the programme, which will run from August to March 2011, will be employer responsiveness, apprenticeships and pre-employment training.

  • LSIS Annual Review

The Learning and Skills Improvement Service have published their annual review for 2009-10. The review details their achievements including quality improvement; supporting research; raising provider performance; building the capacity of the sector; and developing employer responsive provision.

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  • Treasury vs. DWP

The Treasury has asked DWP to provide £5 in savings for every £1 spent on reforming the benefits system. Iain Duncan-Smith has been asked to ensure that the reforms cost no more than £3bn and contribute £10bn in net savings. More details will be forthcoming with the Spending Review in October.

  • Spending Challenge

The public have submitted over 44,000 ideas of how to cut the deficit via the government’s Spending Challenge. The most popular ideas will be taken forward to the Spending Review in October. You can read the range of suggestions about the voluntary sector here.

  • “Big Society” Deregulation Taskforce

The Office for Civil Society and BIS have launched a taskforce on reducing charity regulation. The taskforce is chaired by the president of NCVO, Lord Hodgson of Astley Abbotts and also includes Lynne Berry from WRVS, Andrew Hind of the Charity Commission, and David Tyle of Community Matters. The taskforce’s responsibilities will include the responsibilities of trustees, employment law, and service delivery contracts.

  • Social Mobility agenda

A new ministerial group on social mobility will be set up to develop a Social Mobility Strategy and former Labour Health Secretary Alan Milburn is to undertake an annual review on social mobility it has been announced. This review will examine the contribution of employers and non-governmental organisations to social mobility and policy initiatives will include reforms to the tax system to reward work and a focus of education resources on the most disadvantaged.

  • LGA or IDeA to fund all Council Training

Either the Local Government Association or the Improvement and Development Agency is set to take control of funding for training and improvement across local government. Currently the funding is distributed among nine separate organisations, including the National Institute of Adult Continuing Education. In the future this funding will be unringfenced in order to reduce overhead costs and promote the better use of resources. This will be supported by a short consultation which closes on 9th October 2010.

  • Unison Challenge Reforms

Unison, the union have challenged proposed reforms to the NHS which will give employees the chance to “spin-out” from the public sector to form social enterprises. The union argue that the reforms have not properly fulfilled the duty for public consultation.

  • NHS Consultant Review

A review will be made into bonus payments paid to NHS consultants. The review will consider the need for incentives to encourage and reward excellent quality of care, innovation, leadership, health research, productivity and contributions to the wider NHS.

  • ‘Free schools’ project falters

The first wave of “free schools” will involve only around a dozen new schools – falling far short of scheduled government plans according to the Financial Times. The schools, which are funded by the taxpayer but run by private-sector bodies, will open in September 2011.

  • Children’s Homes and Fostering consultation

The Department for Education have launched a public consultation on fostering and children’s homes. The proposed changes are designed to reduce delay in foster placements, streamline bureaucracy and remove overly prescriptive regulations. The consultation runs until 19 November 2010.

  • DWP/Birmingham University training research

The University of Birmingham have published research for DWP on the relationship between undertaking training and gaining/retaining employment. The report uses long-term data and suggests. The research shows that the proportion of workers aged 16-69 in training rose by7 8% between 1994 and 2003 but has remained flat since then. For most age groups, except those under aged 20, the rate of wage increase was raised if they had undergone a period of training.

  • Big Lottery Fund consultation

The Department for Culture, Media & Sport is running a consultation on how the Big Lottery Fund might take into account the need to distribute money to projects delivered by the voluntary and community sector. The consultation runs until 29thOctober and further details can be seen here.

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The voluntary sector

  • “Democratising Commissioning”

ACEVO and PWC have jointly published a report on how commissioning could be reformed to put communities and citizens at the heart of service design and delivery. The paper advocates the use of initiatives such as personal budgets, participatory budgeting, choice and voice in order to create services that reflect the complexity of people’s lives. They also recommend that support for commissioners be refocused to concentrate on market development and skills in innovative service design.

  • Volunteering “Civic Core”

A specific “civic core” of people is responsible for the vast majority of volunteering in the UK. According to research published by the Third Sector Research Centre, two-thirds of unpaid help is given by around 7% of the population. The amount of unpaid help and civic participation in the most advantaged areas is also well over twice that of the least advantaged.

  • NAVCA CEO joins Spending Review

Kevin Curley of NAVCA is to represent the voluntary sector on the Independent Challenge Group, a stakeholder group established to provide advice to the government for the forthcoming spending review. Curley is the only civil society leader appointed to the body.

  • Equality Act guidance

The Government has produced a guide on the implications of the Equality Act for voluntary sector service providers. The Equality Act will be introduced on 1 October 2010 and will simplify existing equalities legislation. The guide provides advice on how to prevent and address discrimination in the provision of goods, facilities and services to the public.

  • “Proving Your Worth to Whitehall”

New Philanthropy Capital have published a paper on how charities can make an effective evidence-based case to government. The publication poses to charities the same 9 questions that the Treasury is currently asking government departments, including whether the activity is essential to meet government priorities, whether it can be targeted at those most in need; and how it can be provided more effectively.

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Think tanks and research

  • Ipsos Mori Research

Polls undertaken by Ipsos Mori show that the Coalition Government has the highest “100th day rating” of any government since 1979 (except Blair in 1997). Public awareness about the “big society” agenda has also increased to 52% since the election but 61% still know either “not very much” or “nothing” about any specific plans.

  • ICM poll

A poll published by ICM shows that the coalition remains reasonably popular, with 46% of voters deeming it to be doing a good job in running the country against 36% who say it is doing a bad job. Meanwhile, a drop in support for the Lib Dems has meant that Labour are on an equal footing with the Conservatives (37%).

Policy briefing 2 August 2010

It has been a noteworthy couple of weeks for both skills policy and the voluntary sector. Last week saw the Government enter consultation to produce a new Skills Strategy. The consultation is in two parts – policy and funding – and will run until 14 October 2010.

The policy priorities are for a credible vocational training offer; incentives to support the unemployed; quality information for learners and employers to see the benefits of co-investment; greater freedom for providers to respond to learner demand; joint-work with employers; the empowerment of communities through informal learning; and a reconsideration of prioritised funding for particular learners.

The funding priorities are for better information about availability, cost and quality of learning; greater flexibility in budgets and management structures; a greater focus on outcomes (i.e. delivering jobs for learners rather than teaching hours); creation of a low-cost and effective system with minimal government intervention; and the introduction of £1m minimum contract levels and greater use of sub-contracting in further education.

There has also been plenty of political action to further outline the “Big Society” agenda, however this has occurred alongside £11m of cuts to Office for Civil Society spending.




  • Skills Funding Agency consultation

The Skills Funding Agency have launched a consultation on the Single Equality Scheme. They hope that this scheme will ensure that all adult learners have the opportunity to achieve their full potential and contribute to a more productive and skilled economy, promoting equality across the learning sector. The consultation runs till 6 September 2010.

  • UKCES: World Class Skills and Jobs

The UK Commission for Employment and Skills has published an assessmenton progress towards creating a highly-skilled UK workforce by 2020. The report suggests that the proportion of employers providing training continues to increase, despite the recession. It also states that 7% of adult skills development is currently funded by the voluntary sector, as opposed to the public sector (47%), private sector (30%) and individuals (17%).

  • Learning & NEETs

The Learning and Skills Improvement Service recently held a seminar with BIS minister John Hayes to discuss a research project on young people and adults outside of employment, education and training. Key messages from the seminarincluded the need for the curriculum to be responsive to the personal interests of young people and for multi-agency responses to better engage people. It also highlighted the importance of informal learning opportunities as a means of engaging adults and supporting their progression to more formal opportunities.

  • Open Spaces for Adult Learners

The National Institute for Adult Continuing Education (NIACE) has been commissioned to produce guidance to support a diverse range of organisations to open their spaces for informal adult learning. The guidance will aim to address the lack of access to convenient space for learning through underused sites such as corporate meeting rooms, empty retail space, and sports halls.

  • Connexions at risk

The Connexions guidance service for young people is facing unexpectedly severe cuts as a result of reductions to local authority Area-based Grants. The cuts are said to range between 11-45% and are likely to have a negative impact on the 18-24 year-old NEET population who rely upon the service.

  • Internship Pay report

The Institute for Public Policy Research and social enterprise, Internocracy, have published a joint-report which argues that many internships breach the Minimum Wage Act.. The report also argues that a standard definition of what constitutes and internship would allow for more robust data on current numbers of interns.

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  • “Big Society” Week

David Cameron further outlined the Big Society agenda during a speech in Liverpool. Big Society consists of three strands: Social Action (fostering a new culture of voluntarism and philanthropy); Public Service Reform (opening up public services to charities, social enterprises and private companies) and Community Empowerment (creating communities “in charge of their own destiny”). The three main methods for achieving this are to be decentralisation, greater transparency, and new means of providing finance (such as payment by results and the Big Society Bank).

  • Office for Civil Society cuts

The Office for Civil Society has been asked to deliver £11m in savings. This will come from unallocated budget (£2m); the “V” volunteering scheme (£7m); Capacitybuilders, especially the “ChangeUp” programme (£1.3m); the Commission for the Compact (£0.4m); and other a range of programmes to support social enterprise.

  • Open Letter to the Voluntary Sector

Cabinet Office ministers Francis Maude and Nick Hurd have written an open letter to charities and social enterprises asking them for ideas on how to reduce the deficit. The intention is for organisations to share their frontline experience of what works as well as innovative ideas for reform.

  • Big Society Ministerial Group

The first meeting of the Ministerial Group on Big Society was held to look at each department’s contribution as well as how the Compact could be made more effective. The group is co-chaired by Francis Maude and CLG secretary Eric Pickles in order to reflect the importance of localism to the agenda.

  • National Citizenship Service

Plans have been announced for pilots of the National Citizenship Service in Summer 2011. The pilots will involve 10,000 people and last for seven to eight weeks. Activities are expected to include an outdoor challenge, a set of structured tasks involving visiting and helping the local community and developing skills and designing a social action task. The Government is invitingpotential providers to submit bids.

  • Strategy for Sustainable Growth

BIS have launched a new strategy for sustainable economic growth. The strategy outlines three key priorities – promoting free and open markets; promoting business and innovation through entrepreneurialism; and smarter public and private investment, including the creation of a highly-skilled workforce. A cross-government White Paper will follow later this year to clarify overall economic priorities.

  • Private Sector Recovery consultation

HM Treasury and BIS have launched a joint consultation on how to encourage a private sector-led recovery through new ways for businesses access to finance. The consultation paper sets out the range of finance options, focusing especially on how SMEs might access bonds or equity finance rather than loans.

  • Regional Growth Fund consultation

A consultation has been launched on how the proposed £1bn Regional Growth Fund should be spent. The fund has been set up to provide support for projects offering potential economic growth and new private sector employment to areas currently reliant on public sector employment. It is expected that the majority of bids will be around £1m and will be proposed by Local Enterprise Partnerships.

  • Local Enterprise Partnership meeting

BIS Minister Mark Prisk and CLG Minister Greg Clark met with business groups, local authorities and think tanks to discuss the forthcoming creation of local enterprise partnerships. Representatives discussed issues in relation to potential size, scope and geography. The meeting was organised to give attendees a further chance to help shape future policy ahead of the 6 September deadline for proposals.

  • Review of Offender Learning

John Hayes, Minister for Further Education and Skills has announced a wide-ranging review of learning for offenders in prisons and in the community. The review will involve all those within government who are involved in offender learning, as well as charity and voluntary organisations.

  • Government Offices to be abolished.

The eight remaining Government Offices for the Regions across England are to be cut. In a written statement, Eric Pickles denounced the Government Offices as an “arbritrary” tier of administration without democratic legitimacy.

  • Citizenship Survey

The latest quarterly results of the CLG Citizenship Survey 2009-10, a face to face household survey of over 16,000 people, have been published. The results found that 40% of people had volunteered over the previous year; 76% of people felt that they “belonged strongly” to their neighbourhood, and that 855 of people thought that their community was cohesive.

  • New role for John Hayes

BIS Skills minister, John Hayes has been given additional responsibility as Minister of State at the Department for Education with responsibility for 16-18 apprenticeships and careers advice.

  • Consultation on School Funding/Pupil Premium

The Department for Education has launched a consultation on school funding in 2011/12. The school funding consultation is seeking views on ending the policy of funding a minimum of 90% of a local authority’s three-year-old population; a proposal to allow local authorities to apply for additional funding where they have schools serving service children; and an intention to have a Minimum Funding Guarantee. It will also consult on how best to operate the Pupil Premium for disadvantaged children.

  • Department of Health consultations

The Department of Health has just launched three consultations – Commissioning for PatientsLocal Democratic Legitimacy in Health; and Liberating the NHS. The first consultation will cover how to put GP consortia in charge of commissioning services as supported by an independent NHS Commissioning Board. The second consultation will explore proposals on how patients, locally elected councilors, local authorities, public health experts and others will work with GP consortia to make health services meet the needs of local areas and improve health outcomes. The third consultation will seek to reform the regulation surrounding healthcare providers.

  • Expansion of “Right to Request” for PCTs

Fifteen additional projects have been announced as part of the “Right to Request” scheme. The scheme gives all Primary Care Trust staff the ability to run their services on a social enterprise model. The new projects span two thirds of Strategic Health Authorities and include cities like London, Bristol, Leeds and Birmingham. Projects include a wide range of services like increasing access to psychological therapies, improving end of life care and a wider range of children services. Other interested PCTs are asked to contact the NHS’ Social Enterprise Unit.

  • Cull of Health Bodies

review of arms-length bodies has outlined changes that will reduce the number of health bodies from 18 down to around 8 and deliver savings of over £180m by 2014/15. The review looks at whether their work could be carried out by a different body. Bodies affected include the General Social Care Council, which will be transferred into the Health Professions Council; the Health Protection Agency, which will be abolished and its functions transferred to a newly-created Public Health Service; and the Care Quality Commission, which will lose its function in assessing NHS commissioning. Health sector leaders are shocked by the lack of consultation over such cuts, especially the abolition of the GSCC.

  • Benefits Reform

Iain Duncan Smith has proposed measures to combine housing benefit and income support with the tax credit system to form a single benefits sytem in order to reduce costs. They will also be exploring proposals to supplement monthly household earnings through credit payments reflecting current circumstances, including children, housing and disability. The savings could be used to increase work incentives by reducing punitive tax and benefit withdrawal rates.

  • Third Sector international fund consultation

The Department for International Development has launched a consultation on a £40m fund for third sector organisations that work with the world’s poorest people. The fund will offer ‘innovation grants’ of up to £250,000 to organisations with annual turnovers of less than £500,000 that want to develop new ideas and grants of up to £2m will be available for larger programmes.

  • Shadow Meeting on Big Society

A collection of Labour MPs met to discuss policy on the voluntary sector. The meeting included shadow minister for the cabinet Paul Goggins, and Alun Michael, the first minister to be given responsibility for the voluntary sector under New Labour. They discussed the need for a coherent definition of “Big society” and the possible effect of spending cuts on the sector.

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The Voluntary Sector

  • Capacitybuilders’ Report

A report published by Capacitybuilders shows that the majority of public service commissioners would like to see greater collaboration and mergers between the infrastructure organisations that provide support and advice to voluntary organisations. The benefits of such efforts would be simpler funding arrangements and easier means of engagement.

  • NAVCA/NCVO Disappointment over LEPs

Voluntary sector infrastructure bodies, NCVO and NAVCA have expressed disappointment over the exclusion of the sector from the new Local Enterprise Partnerships due to replace the RDAs. A letter sent to council chiefs from the business secretary Vince Cable and the communities secretary Eric Pickles said the government was keen to encourage local businesses and councils to work together to develop proposals for LEPs but did not extend the invitation to voluntary sector organisations.

  • ACEVO/SIB: “Understanding Social Investment”

A report jointly-published by ACEVO and the Social investment Business recommends that funds from Futurebuilders, Communitybuilders and the Social Enterprise Investment Fund be transferred to a new, independent retail bank.

  • Big Lottery Funding areas

The Big Lottery Fund has announced the 50 areas where community groups will be able to apply for a new £200m funding scheme – Big Local. The areas will be given at least £1m each from an independent charitable trust set up to distribute the money. The BLF are currently seeking a partner to distribute the fund.

  • Funding cut for London Voluntary Sector

The London Development Agency has slashed a £4m fund, the Incubator Fund, which had the purpose of helping voluntary and community organisations collaborate on developing and winning bids for public service delivery contracts and manage cash flow.

  • Consortia to Bid for DWP contracts

Third sector providers of unemployment services are developing plans for large consortia to become prime contractors for the Government’s Single Work Programme. The rrogramme, which will replace welfare-to-work schemes such as Pathways to Work and the Flexible New Deal, will be run through large regional contracts worth up to £50m a year. Intereste4d organisations include 3SC, Groundwork and the national Housing Federation.

  • “Scaling up for the Big Society”

A new research report by New Philanthropy Capital suggests that two things stand in the way of the voluntary sector building a Big Society: (i) an inability to provide evidence of their impact (ii) and the challenge of identifying proven, cost-effective approaches and organisations that can be scaled up to meet the challenge. The paper features examples of charities that have direct evidence of effectiveness and could be scaled up successfully.

  • Trusteeship 2010

Trusteeship 2010, a report by New Philanthropy Capital presents the views on what has changed for charity trustees in the UK over the last year. The report points to the launch of new recruitment services and resources for trustees, and greater collaboration between charities and professional associations as positive developments but argues that huge challenges lie ahead in the wake of public spending cuts.

  • Lack of Evidence on Public Service Delivery

The Third Sector Research Centre has claimed that there is little independent evidence to suggest that public services commissioned from voluntary sector organisations are better for users. The review, which examined 48 pieces of research published between 2004 and 2010, says that evidence on the impact of third sector service delivery is scarce and commissioners continue to have doubts about the capacity of third sector organisations to take on contracts.

Policy briefing 8 May 2010

The Voluntary Sector

  • Third Sector Minister Loses Seat

The Labour Minister for the Third Sector, Angela Smith has lost the vote in the Basildon and Thurrock constituency which swung to the Conservatives by 9.7%. Elsewhere, the Conservative Shadow Minister for the Third Sector, Nick Hurdwon the Ruislip constituency with a 2.8% swing and Jenny Willott of the Liberal Democrats won the vote in Cardiff Central despite losing 8.4% of the vote. However, Nick Hurd has said that he is uncertain whether he would be the third sector minister in a Conservative-led government.

  • Impact of a Hung Parliament on the Sector

Various umbrella bodies have spoken out on the subject of a hung parliament. ACEVO have drawn attention to the challenges it will create for chief executives, pushing their lobbying skills to the limit. NAVCA, meanwhile, have warned that a hung parliament would not entail the need to convince a new government of the merit of the voluntary sector as all the parties already share a broad consensus about the value of voluntary work. The Charities Aid Foundation have said that the increased number of stakeholders would make it easier to influence legislation in the third sector’s favour.

  • NCVO Civil Society Almanac 2010

The annual NCVO Almanac has declared its findings for the year. The Almanac found that Civil Society had an income of £157 billion last year, with 1.6 million employees (668,000 of which worked for voluntary organisations) and 900,000 organisations (171,000 of which were active voluntary organisations). It defined “Civil Society” as not just charities and voluntary organisations but also employee-owned businesses, companies limited by guarantee, co-operatives and universities. Other findings included that 20.4 million adults formally volunteer every year (41% of the population) and that 36% of Civil Society’s income comes from statutory sources.

  • Charitable giving and volunteering in decline

Charitable giving and volunteering has declined in England over the past five years according to the annual citizenship survey (pdf file) published by CLG. The survey shows that levels of “civic engagement” remained at 47% and that only 26% of people took part in formal volunteering on a monthly basis, compared with 29% in 2005. Charitable giving also declined, with 74% of people in 2008/09 saying they had given money to charity in the four weeks before the survey compared to 78% in 2005.

  • Acevo calls for continuation of future jobs fund

ACEVO has written to the three main parties demanding assurances that they will continue the £1 billion Future Jobs Fund, which has offered 70,000 job placements in charities so far. Labour and the Liberal Democrats have promised to keep the Future Jobs Fund. The Conservatives, meanwhile, have promised to review the scheme in 2011.

  • Citizens UK Manifesto

Citizens UK, a national network of civil society organisations has published itsmanifesto. They call for the next government to recognise “civil society” as an equal partner with government and markets; the public sector to adopt the Living Wage; the creation of an interest cap on loans and access to affordable credit for communities; the end of detention of children in immigration centres; affordable housing to be offered through Community Land Trusts; and a conditional “earned regularisation” for long-term irregular immigrants.

  • Social Return on Investment

A research paper by New Philanthropy Capital suggests that measurement of charity effectiveness is hindered by a lack of understanding of Social Return on Investment (SROI). In order for SROI to achieve its full potential, investment needs to be made to help charities collect evidence of their impact. The expression of outcomes in terms of financial values is recommended in order to gain a deeper understanding of the value of each element of a charity’s work.

  • Compact Voice – 2010 General Election

Compact Voice has created a website to highlight the views of all the Prospective Parliamentary Candidates to the voluntary and community sector. It asked each candidate four questions, including how important the sector is to their constituency and whether they would champion the Compact in their constituency. The answers are available online.

  • Better Banking Open Letter

Over 500 third sector organisations have signed a letter to the leaders of the three main parties calling for reforms to high-street banking. The open letter from the Better Banking Coalition calls on the next government to require banks to introduce greater transparency about their loans and for a Community Reinvestment Act which would require banks to provide more services in deprived areas or fund specialist third sector organisations such as community development finance institutions and credit unions.

Policy & Consultations

  • Skills Funding Agency and Further Education Funding

The Business, Innovation and Skills Select Committee has published a report on the post-LSC education landscape. The committee remain unconvinced that recent changes have been an improvement, creating significantly more organisations involved in the delivery of further education and presenting insufficient evidence of long-term cost savings. The committee welcome the publication of national and regional skills strategies but argue that they are overly focused on public sector organisations and need to take greater account of the views and needs of business.

  • Young People Not in Education, Employment or Training

The Children, Schools and Families Select Committee has published a reportwhich persuades the Government to reform the benefits system for young people based on the model of the Netherlands. In the Dutch system, more generous levels of benefits are offered to young people in exchange for greater compulsion to take up education, training or work. The report also calls for increased co-location of welfare and other services in line with the Total Place approach. 

Skills & Workforce

  • Local Government Workforce Strategy

The Local Government Workforce Strategy 2010 published by the Improvement and Development Agency has a clear focus on the need for partnerships and effective multi-agency working throughout the areas of organisational transformation, leadership, skills development, recruitment and retention in the local government workforce.

  • Apprenticeships Guide for Local Councils

Improvement and Efficiency West Midlands, with the IDeA and the National Apprenticeship Service has produced an online guide to support councils to engage with Apprenticeships. The guide explains how Apprenticeships are used to improve the local government workforce age profile, address skills shortages and reduce the number of young people not in education, employment or training.

  • LSIS Corporate Plan 2010-2013

The Learning and Skills Improvement Service has published its corporate planfor the next three years. The plan promises continued support for STEM priorities (science, technology, engineering and mathematics), further support for employers to meet their skill needs in priority areas, and for curriculum developments that encourage the wider participation of disadvantaged learners and young NEETs. 

Think Tank & Research Activities

  • Demos Analysis of Education

The think tank Demos have presented their analysis of the main parties’ education policies. Conservative proposals to drive up standards through opening up provision are regarded as “highly debatable”. Labour’s education policy is seen to be “a solid and sensible, if unexciting, set of proposals”. Meanwhile, the Liberal Democrats’ are seen to lack detail, especially on the proposed Pupil Premium. On balance, Demos conclude that Labour would be the best placed to respond to learning inequalities.

  • PPC Third Sector Backgrounds

According to research by the Guardian, in the top 100 marginal seats, over 25% of Labour Prospective Parliamentary Candidates have worked in the third sector, 13% of Tories (excluding trustees and volunteering), and about 10% of the Lib Dem candidates have had paid work in the charitable sector.

  • Co-production Report

A New Economic Foundation report, “Public Services Inside Out” (pdf file) examines how new relationships may be fostered between professionals, service users, families and neighbours. The key themes suggested by the report include recognising people as assets; building on existing capabilities; establishing mutual responsibilities; the importance of peer networks; blurred distinctions between professionals and recipients; and the facilitation rather than delivery of services.

  • Community Health and Well-being – an asset approach

The Improvement and Development Agency have published a report on how an asset-based approach to wealth might tackle health inequalities in an era of public service cuts. An asset-based approach would focus on building social capital, promoting face-to-face community networks, and encouraging civic participation in order to improve health outcomes, well-being, and resilience.

  • The Third Sector Post-Election

The Economic and Social Research Council has produced a briefing paper on the prospects for the third sector following the General Election. The issues and opportunities facing the sector include increased delivery of public services, the reworking of funding models such as sub-contracting and social investment, the potential for civic engagement offered through the localism agenda, and increased pressure for value for money in terms of both outcomes and outputs.

  • 2020 Low Carbon Economy

The Work Foundation has produced a report (pdf file) on the workforce implications of a low-carbon economy. The report argues that the cross-sectoral nature of many “green jobs” results in a poor match with standard occupational classifications. Meanwhile, the development of an appropriately skilled workforce remains uncertain due to a lack of investment in infrastructure and technical skills, and the absence of reliable demand for low-carbon services.

  • Shaping the Future of Social Care

PriceWaterhouseCoopers has published a report on the future of social care. The report warns of impending challenges such as the move towards personalised services, payment-by-results and micro-commissioning. These challenges entail greater engagement with individuals to plan for future care needs and support for smaller organisations operating in a more competitive care market.

The New Political Landscape

This policy briefing aims to outline recent changes to the political landscape and to map emergent trends in order to help inform Skills – Third Sector’s current work.

The inability of any political party to achieve a decisive majority in the recent General Election and the imminent need to address the public budget deficit has combined to create an uncertain operating environment for many organisations.

This has been clarified somewhat by the release of a Coalition Agreement between the Liberal Democrats and the Conservatives, more detailed plans from the Treasury of where the cuts will fall and the list of Bills within the Queen’s Speech, but there are still many questions around the future viability of organisations and public funding.

Coalition Agreement

The Conservative-Liberal Democrat coalition laid out their programme for government on 20 May. The programme carries numerous implications for the third sector, promising to “promote the radical devolution of power and greater financial autonomy to local government and community groups.” [1] Perhaps of greater consequence though is the consensus reached on immediate action to tackle the deficit, which is to be achieved by £6.2bn of cuts to non-frontline services in 2010/11.

In terms of specific policy agreements, the coalition has promised significant public service reform. In order to increase transparency, all central government spending and contracts over £25,000 will be available online and all councils will be required to publish full contracts, tender documents and all items of spending over £500.

The coalition also plans to further open up the provision of public services, including a requirement for 25% of government contracts to be awarded to SMEs. Much of this is aimed at the voluntary and community sector, including the introduction of a community “right to bid” for state-run services and new community powers to save facilities threatened with closure. The agreement also promotes the right for public sector workers to form their own co-operatives to bid for and deliver services.

With regards health, every patient will be allowed to choose any provider that meets NHS prices and standards, and local communities are promised greater control over public health budgets (with providers paid by the outcomes they achieve in improving local health).

School provision will also be opened up in response to parental demand and free nursery care will be offered by a diverse range of providers.

In criminal justice, a “rehabilitation revolution” will expand the involvement of independent providers. In welfare, a single welfare-to-work programme will be created with contracts aligned to reflect providers’ results. The creation of Service Academies to offer pre-employment training and work placements and Work Clubs for unemployed people to exchange skills and provide mutual support will also most likely be aimed at third sector provision.

In terms of further education, the agreement promises improvement to the quality of vocational education, including the creation of Technical Academies. Colleges will be given greater independence and many of the further education quangos will be abolished. A review of support for part-time students in terms of loans and fees has also been promised.

The coalition agreement proposes various financial reforms of relevance to the voluntary sector. Mutuals are to be promoted in order to achieve a more diverse banking sector and a free financial advice service is to be created via a “social responsibility levy” on the financial services sector.

The creation of a Green Investment Bank and a “green new deal” to offer incentives for domestic energy efficiency will help further the low-carbon agenda.

The National Lottery is also set to be reformed so that more money goes into sports, the arts and heritage and a Big Society Bank is to be created from dormant accounts to provide finance for NGOs. These new sources of funding will be vital for the voluntary sector as they run alongside proposals to train significant numbers of community organisers, a National Citizen Service for 16 year olds, and a national Big Society Day to encourage voluntary action.

Spending Cuts

More specific proposals for spending cuts were laid out by the Treasury on 24 May. There is to be a total of £6.2billion savings in 2010/11 in order to tackle a £156billion deficit. The Treasury is adamant that these savings will only be made to “non-frontline services”. Furthermore, £500 million of the savings are set to be reinvested, including £50m for Further Education colleges and £150m to fund 50,000 new apprenticeship places.[2]

Proposed savings are to occur across the following areas:-

  • Consultancy and Travel (£1.15bn)
  • IT (£95m)
  • Discontinued projects and renegotiated contracts (£1.7bn)
  • Property Costs (£17m)
  • Civil Service recruitment freeze (£120m)
  • Quangos (£600m)
  • “Low Value Spend” (£520m)
  • Local Authority grants (£1.165bn).

The category of “low value spend” includes the phasing out of Child Trust Funds by 2011, savings to the Government’s housing pledge, “ineffective elements of employment programmes” (including further rollout of the Future Jobs Fund), Regional Development Agency spending, and Department for Education quangos.

In total, the Department for Education has been asked to make £670m from cuts to wasteful spending and quango costs. Schools, Sure Start and 16-19 education, however, have all been declared as safe from cuts.

In terms of reductions to local government spending, there will be no reduction to the main £29bn Government grant to Local Authorities but local government will be expected to contribute £1.165bn through individual grants. In addition, £1.7bn of local government spending will be opened up to enable councils to focus their budgets on particular services.

A breakdown of individual government departments’ contributions to spending cuts reveals that BIS is being asked to make the largest individual contribution (£836m), with the CLG’s contribution divided into departmental (£780m) and local government (£405m).

The Department for Education is expected to make £670m of savings, DWP has been asked to contribute £535m and the Cabinet Office itself is expected to make £79m in savings.

Queen’s Speech

The Queen’s Speech on 25 May outlined the Government’s priorities for the forthcoming year. There were a total of 22 bills, including:

  • A Welfare Reform Bill to simplify the benefits system to improve work incentives.
  • An Energy Security and Green Economy Bill to help ensure energy efficiency measures are made to homes and businesses, and to establish a framework for secure low-carbon energy supplies and greater competition in the energy market.
  • An Academies Bill to enable primary and special schools to become Academies, the freedoms needed to drive up standards and automatic charity status.
  • An Education and Children’s Bill to introduce a slimmer curriculum giving more space for teachers to decide how to teach.
  • A Health Bill to take forward proposals to significantly cut the number of health quangos, cut the cost of NHS administration by a third and allow GPs to commission services on behalf of their patients.
  • A Public Bodies (Reform) Bill to cut the number of public bodies and allow Ministers to abolish, merge or transfer functions from public bodies back into Government Departments.
  • A Decentralisation and Localism Bill to turn RDAs into Local Enterprise Partnerships and return decision-making powers on planning to local councils.

On the topic of public service reform, the Queen’s Speech was especially sanguine about the potential of the third sector [3].  This commitment also came with the acknowledgement that measures would have to be undertaken to counteract current barriers to third sector involvement in public service delivery.

Organisational Changes

The formation of a coalition government and looming spending cuts entails certain organisational changes, some of which have already occurred, some are expected to occur as the civil service returns from purdah, and others are yet to be laid out.

The new Government has already removed all reference to the “third sector” from the Cabinet Office, making the Office of the Third Sector redundant in name, if not in function.

The relevant Government Minister, Nick Hurd, has been named Minister for Civil Society and Nat Wei of Teach First has been appointed as Government Adviser on Civil Society. The formal creation of the Office for Civil Society within the Cabinet Office is expected shortly.

DCSF has been rebranded the “Department for Education” under the new Conservative education secretary, Michael Gove. Whilst the Department maintains a similar remit for state schools, education up to the age of 19 and children’s services, it is to take more of a conventional focus on education and there is some concern that it could lead to the decline of multi-agency working and children’s services.

The new Department for Education has also called for a halt on the work of all government quangos in the children and young people’s sector – including the Children’s Workforce Development Council, Ofsted, and the Young People’s Learning Agency – until they have decided on their key priorities.

The Liberal Democrats and the Conservatives have both promised to create a single funding agency for further education to ensure that public funding follows student choice. In the Lib Dem manifesto, this body is called the Council for Adult Skills and Higher Education and in the Conservative manifesto it is called the Further Education Funding Council. Semantic differences aside, this new body will consolidate the functions of the Higher Education Funding Council and the Skills Funding Agency. Although this is a point of agreement, it is likely that it would take a new piece of legislation to dismantle the SFA so can be expected to occur over a longer period.

Broad cuts to education quangos are expected, with the British Educational Communications and Technology Agency (BECTA) already declared non-essential. It is understood that the Qualifications and Curriculum Development Agency will be expected to provide £8m in savings; the Children’s Workforce Development Council £15m; the National College for Leadership of Schools and Colleges £16m; and £30m will be saved from the Training and Development Agency for Schools [4]. Out of these bodies, the QCDA looks to be in most long-term danger given the shared Lib Dem and Conservative interest in giving schools more freedom over the curriculum. The future of the Young Peoples’ Learning Agency also remains uncertain.

In their manifesto, the Conservatives promised to rename the Department of Health the “Department of Public Health”, echoing the increased tendency towards preventative and community-based healthcare. This seems to echo strongly with the stance of the Lib Dem manifesto, however the previous Liberal Democrat promise to cut the size of the Department of Health by half looks overly ambitious in light of the Conservatives promise of annual increases in funding, although both parties are sure to agree on cuts to health quangos over the coming months.

A further point of agreement between the Conservatives and the Liberal Democrats lies in the future of the Regional Development Agencies, both parties seeing them as unaccountable and wasteful. Local Enterprise Partnerships are set to replace RDAs, as joint local authority-business bodies brought forward by local authorities themselves to promote local economic development.  Nonetheless, where RDAs have strong local support they may continue to operate with refocused economic development objectives. “Localism” has been a central part of the Conservatives’ policy agenda, however, so the role of local government quangos such as the Improvement Development Agency or Local Government Association is as yet unclear.

Implications for Skills-Third Sector

The new Government’s programme of action has broad implications for the operating environment of both the voluntary sector and the educational landscape. A clear focus on opening up service provision to the voluntary sector is to be welcomed, especially the obligation for 25% of government contracts to be given to SMEs as this will reward many of the smaller sector organisations currently disadvantaged within the commissioning process. Furthermore, the intention to publish local and central government contracts more widely will bring much needed transparency to the commissioning process. It is also essential that the Government delivers on measures to reduce current barriers to the voluntary sector in public service delivery.

Certain details need to be expanded upon in the agreement, such as how the community “right to bid” would work (what organisational form would such a “community” take) and how the proposals for public sector workers to establish co-operatives would be regulated. More detail is also needed on proposals to create Service Academies and Work Clubs for the unemployed and how their provision will join-up with traditional Jobcentres.

The continued emphasis on “Big Society” as an object of government is to be welcomed and highlights the essential contribution of the voluntary sector to the nation, both socially and economically. Nonetheless, there is a need to ensure that large-scale policy pronouncements such as the creation of an “army of community organisers”, a National Citizenship Service and a Big Society Day are backed up with sufficient resources.

Volunteering is not a free resource and needs the right investments in sector infrastructure such as advice, training and management of volunteers. As these elements of training (especially Volunteer Management) are something which Skills-Third Sector has responsibility for then this could provide opportunity for our organisation to shape the Big Society agenda.

With regards the spending cuts, these could have an adverse effect upon the voluntary sector. Most significantly, the proposed cuts to local authority grants will deny local infrastructure organisations and community groups a significant proportion of their income and will present barriers to the desire for their increased involvement in service delivery.

The proposed transformation to RDAs into new organisations purely concerned with basic economic development functions may also curtail the work they do in the areas of social inclusion and skills, and may well hamper the development of regional skills strategies. Furthermore, as yet there is no clear criteria against which the popularity of RDAs will be assessed.

Finally, the forthcoming cuts to education quangos will affect many of the bodies that Skills-Third Sector work with (such as CWDC) and could have wider repercussions throughout the skills sector. Most of the skills system has only just become acquainted with the transition to the Skills Funding Agency and the Young Peoples’ Learning Agency, so the likely shift back to a single skills body could be regarded to be a regressive move. The £200m savings to be reinvested in Further Education and Apprenticeships is to be welcomed, however, and aligned to the impetus for increased third sector delivery of public services could present an avenue of funding for Skills-Third Sector’s future work.


[1] The Coalition: our programme for government (2010:11)
[2] The remaining amount will be divided between social rented homes and backdated business rates bills.
[3] “The Cabinet Office will work closely with other government departments to identify where social enterprise, charities and co-operatives can have an enhanced role in public services. The Cabinet Office Minister, Rt. Hon. Francis Maude, working closely with the Minister for Civil Society and HM Treasury Ministers, will oversee this work”. Full speech here.

Spending Review Framework

This briefing aims to inform readers on the content of the recent Spending Review Framework.

The Spending Review Framework gives greater detail of the Coalition Government’s proposals to cut the public deficit.

Under the framework, all government departments will be required to assess current contracts and programmes on the basis of value-for-money and identify any potential savings. Part of this will be the attempt to encourage a greater range of service providers.

The following questions are to be asked about public spending:

  • Can the activity be provided by a non-state provider or by citizens, wholly or in partnership?
  • Can non-state providers be paid to carry out the activity according to the results they achieve?
  • Can local bodies as opposed to central government provide the activity?

These questions carry forth the commitment for increased local and voluntary provision of services and a payment by results model for public services. However, it should be noted that a lot of such non-state provision would include the private sector funding state capital spend (such as property and machinery), and may also entail increased sub-contracting arrangements between the private and voluntary sector.

The framework also states that there is ‘no justification for spending public money on programmes and projects without considering the impact on the outcomes that people care about.’ This could be a potential point for voluntary organisations to pick up on, as delivering quality outcomes and high-levels user satisfaction is something that the voluntary sector is seen to contribute to service delivery.

A Public Expenditure Committee is to be formed to advise the cabinet on the Spending Review, agreeing on key priorities and assessing the impact of reduced spending on various parts of society. This Committee will include the Cabinet Office ministers Francis Maude and Oliver Letwin. Given the position of all things voluntary sector within the Cabinet Office, this means that Letwin and Maude are likely to be more attuned to the issues affecting the voluntary sector when deciding upon spending priorities.

Finally, the framework promises a period of external engagement with the voluntary sector, the private sector and key experts over August 2010. This will take the form of a series of events to discuss and debate various aspects of public spending, covering the following themes:

  • The role of localism and how it can meet the Government’s vision to distribute power and opportunity more widely.
  • Major areas of departmental expenditure
  • The broader welfare reform strategy

The Review states that “A range of people will be invited to these events, to make sure that they represent a wide spectrum of expertise and viewpoints. Invitees will include members of think tanks and interested groups, academics, representatives of local government, business and trade unions, and public sector experts and watchdogs such as the Audit Commission.”

The written commitment to hold external engagement events over a specified timescale makes it difficult to be overly cynical about the Coalition’s intent to involve the public in discussions around reducing the budget deficit. However, the list of invitees seems to focus on academic and public sector experts at the expense of representatives of the local voluntary sector.

To ensure cuts which are genuinely informed by democratic discussion it will be vital that such talks take place with as a broad a representation of civil society as possible and that the voluntary sector is able to effectively feed in on how the cuts will impact upon the communities and people it serves.

To achieve this, Skills-Third Sector may play a key role in collating robust research data about the sector to be brought forward into the external engagement process by voluntary organisations.