Local authorities have a pivotal part to play in easing unemployment during the recession. Many of the initiatives in the Budget will rely on local projects and councils cannot shy away from their duties.
The most significant Budget in a generation is behind us. The broad narrative — future opportunity and investment in recovery — failed to deflect attention from the broader gloom. Labour market figures released almost simultaneously with the announcement ran counter to the chancellor’s necessary optimism. But with 2.1 million now jobless — more than when Labour came to power — an urgent labour deployment scheme was the only option for a government anxious to stop the dole queue growing.
The social cost of recession made a rapid response imperative. History shows that each downturn creates more long-term unemployed people who are permanently dislocated from the labour market, persisting like rock pools through the ebbs and flows of the economic cycle. This in turn marginalises communities. The pattern will repeat itself unless action is taken early and vigorously.
So what did the Budget deliver? The trend in capital investment, dropping in cash terms from £44bn this year to £22bn by 2013, put paid to cumbersome grands projets. Rather, as the Local Government Information Unit and Local Government Association have suggested, the green housing and other low-carbon initiatives will require local infrastructure projects that can respond quickly to new employment opportunities.
The £1bn Future Jobs Fund, which will be launched this autumn, aims to create 150,000 new jobs. Councils’ enthusiasm for the bidding process will be telling. The government envisages them taking a pivotal role, but it is important to understand the nature of the opportunity.
At present, funding lasts for six months only. Importantly, these jobs do not yet exist. Local authorities are eager to resuscitate ailing labour markets through job creation right across the spectrum, with most emphasis on highways maintenance, sports and the arts. But they must not be overly creative in their desire to meet short-term need. Without a focus on sustainable careers, we devalue the strengthening currency of existing initiatives such as apprenticeships.
A potentially interesting point opens up here. Like the BBC series Ashes to Ashes, we could be catapulted back to the 1980s. Proposals in the Budget and existing powers mean that councils could effectively create intermediate job markets — a modern, local take on the Manpower Services Commission and Youth Training Scheme.
There could be genuine merit in providing recruitment services across the wider local public sector. There is nothing to stop councils eventually competing alongside private sector providers when the private sector jobs return, one step closer to localism. But just because councils have reserves to draw on does not necessarily make this a winning pitch applicable everywhere. The appropriate mix of capacity, ambition and realism is vital, too.
Alarmingly, two in five of the unemployed are aged 16—24. Hence a focus on young people in the Future Jobs Fund and the promise of a universal offer of jobs, training or work placement for all in this age group who have been unemployed for 12 months.
Councils will also be vital partners in initiatives such as Care First, set to create 50,000 traineeships for young people in the care sector. Demand clearly exists, although a supremely careful selling job is required to prevent a consensus view forming that this is an ill-conceived plan to kill two birds with the same stone.
The extra £250m for sixth-form and further education college places will keep young people clear of increasingly politicised unemployment statistics. The challenges for councils in grasping new responsibilities for the 16—19 agenda will be to match education and training to labour market need or create pathways into higher education.
The Budget directed an extra £1.3bn funding for Jobcentre Plus. But this rare giveaway is no more than a sticking plaster for a network running at full tilt after a period of low unemployment. Although vastly improved, Jobcentre Plus remains too centralised, and, ironically, unable to cope with high levels of demand.
We cannot ignore the contribution councils already make to the people and places they know best through their understanding of the interaction of circumstances that cause entrenched unemployment.
We must be clear about how councils add genuine value. We must not divert attention from existing focused schemes for groups most affected by long-term unemployment or stuck in the low-pay, no-pay cycle. But shying away from major job creation initiatives would punch a hole in the localist argument.
The art here will be to strike the right balance between a desperately needed short-term stimulus and planning for sustainable job markets that capitalise on the future opportunity the chancellor points to. After all, councils have as much idea here as the man himself.
Andrew Collinge is director of policy at the Local Government Information Unit
