Written evidence from A4e
SUMMARY
A4e welcomes the opportunity to contribute to
the debate on the establishment and objectives of Local Enterprise
Partnerships. In this submission we argue that:
— LEPs, in bringing a number of Councils
together alongside other local public and private sector partners,
will need the scope to cover relevant economic development and
travel to work areas and sufficient scale to make an impact on
economic outcomes.
— The LEPs represent an opportunity to
join up services to the workless with programmes to support job
creation and enterprise, thereby making the programmes more effective
in reaching their objectives and generating savings in local support
services.
— With public resources scarce it will
be important to maximise the community's support and contribution
and to coordinate all forms of local public investment in an area
relevant to the enterprise development. LEPs should have a key
role in overseeing both these processes.
— Private sector investment will be crucial
to local economic success: LEPs should have a key role in ensuring
the private sector is able to contribute to building a sustainable
local economy.
— LEPs will be faced with a highly complex
challenges and significant resource constraints: they should be
set up so that they are able to draw on the support of strategic
partners from private and voluntary sector to act as managing
agents responsible for overseeing the delivery of key programmes.
A4E BACKGROUND
Established over 20 years ago, A4e was set up
with the aim of lifting people out of poverty in Sheffield, originally
through helping ex steel workers re-train and find jobs in other
industries. Since then the company has grown on a global scale,
supporting over one million people to improve their lives.
With a £145 million turnover, and 3,500
staff A4e is a global organisation helping over 100,000 customers
every year and delivering employment and skills services to almost
7,000 employers every month. It provides a wide range of services
to the unemployed, communities and business in all parts of the
country. All these are directly relevant to the LEPs' objective
of developing their areas' resources to create the right environment
for business and growth.
In summary A4e has close, practical experience
of the past and current approaches to local economic development,
understands the issues intimately and is well placed to contribute
to the debate on their future led by the new LEPs.
1. INTRODUCTION:
THE LEPS'
SCALE AND
SCOPE
There is a clear case for a local authority
role in building resilient local economies which meet their residents'
needs—and particularly the needs of residents who are economically
vulnerable such as the workless. LEPs should be seen an important
means of setting economic priorities for their areas and enabling
public, private and voluntary sectors to work together to deliver
long term, local economic "well being".
Given the wide variation in the structure and
needs of local economies it is important that LEPs are able to
set their own priorities and establish their own programmes to
achieve their objectives.
Equally, it is clear that there are some important
principles that need to guide the general approach of LEPs to
economic development and support for the workless. A number of
these principles are suggested below. However one of the most
important is that LEPs be established from the start with the
necessary scope and scale to be effective.
Economic activity and travel-to-work areas cover
areas far wider than those of individual local authorities. Authorities
which decide to work together in a LEP must therefore ensure their
chosen area "fits" the local economy and labour market.
Equally they will need to establish a role that is broad enough
to make an impact on the local economy and avoid small scale projects
which have only marginal impact.
An important example is the need for a link
between the LEP areas and the DWP's new Work Programme contract
areas. Significant problems of duplication have arisen in the
past as a result of the lack of a clear relationship between the
DWP and the Regional Development Agencies' programmes of support
for the unemployed. The LEPs will find it difficult to integrate
their support for the workless with the DWP unless a clear relationship
is established between the programmes.
Recommendation 1: The scope of LEPs
must be sufficient to match those of the local economy, and the
scale of their activity and objectives sufficient to make an appreciable
impact on the economy
2. JOINING UP
EMPLOYMENT SUPPORT
AND JOB
CREATION PROGRAMMES
One of the central principles LEPs should adopt
is to ensure they have a balanced and integrated programme for
the support of the workless and for local job creation.
Programmes to tackle worklessness and economic
regeneration through job creation have traditionally been considered
largely independent activities—even when they have been
overseen by the same agency. The assumption has been that attracting
new investment leads to the creation of new jobs, and that the
labour market will then ensure that people will be available for
these jobs (or where necessary, once the workless have been prepared
through welfare-to work programmes).
In practice this assumption is rarely fulfilled.
As a result there have been chronic mismatches of opportunities
and skills which in turn have led to long term residual unemployment
in many areas.[1]
In an economic downturn this mismatch becomes much more serious
and can threaten the viability of welfare-to-work programmes.
An alternative approach is to give greater emphasis
to job creation programmes which are more closely linked to local
resources and needs. By managing the elements of local economic
regeneration as an integrated programme, working with the communities
involved, jobs created can be better matched to those people needing
work.
The current welfare-to-work programmes highlight
personal barriers to getting work, notably individuals' lack of
knowledge or confidence, possible health issues, presentation
skills etc. These are key components to any programme and A4e
(together with the other providers in the field) has done much
to develop a more integrated delivery model and to add further
components, such as job skills and community support to their
programmes.
However even in relatively buoyant job market
there are both individual and structural barriers to job placement
success. Some of the individual barriers can be addressed by more
intensive support programmes (which may become viable under the
new Work Programme). However there are other structural barriers
that arise from changes in labour demand and by a sheer shortage
of local job opportunities. These of course will become more evident
if the general level of unemployment rises.
It will therefore become increasingly important
to develop clearly focussed job creation initiatives alongside
(and integrated within) the journey to work.
Moreover building a resilient local economy
and meeting the needs of the workless over the long term demands
programmes that build long term skills and local enterprise. We
need therefore to look beyond "quick fix" solutions
and instead build long term skill development escalators and strong,
sustainable enterprises. In particular it will be important to
resolve the tension between short-term pressures to get workless
people into current vacancies and the longer-term objectives of
ensuring the general skills base develops to meet the realistic
future needs of the local economy. This will involve building
an integrated programme with a number of key elements notably:
— Personalised employment support that
recognises the needs of vulnerable groups and fully engages the
community's support in meeting them.
— Long term skills development programmes.
These will need to recognise the starting points of individuals
and groups and build locally appropriate skill specialisms which
both meet employer needs and act as a vocational bridge between
schools and employers.
— Enterprise development to develop confidence
and skills of the workless to establish their own business, in
many cases breaking the cycle of inter-generational unemployment.[2]
— Business support and advice.
— Financial support for community focussed
job creation.
Recommendation 2: The LEPs represent
an opportunity to join up services to the workless with programmes
to support job creation and enterprise, thereby making the programmes
more effective in reaching their objectives and generating savings
in local support services.
3. COMMUNITY
ENGAGEMENT AND
TOTAL PLACE:
MAXIMISING THE
IMPACT OF
PUBLIC INVESTMENT
Community focused services supported by voluntary
and community based organisations have proved highly successful
in meeting the needs of those excluded from the labour market.
Many of the welfare-to-work contracts for example shown how the
integration of community based providers into regeneration programmes
can make very significant contributions to successful outcomes.
More broadly a large number of local authority
led Total Place pilots conducted over the last year have shown
the scope for providing more effective services at lower unit
cost by joining up locally provided services. There is clearly
scope to apply both community support and "total place"
principles to the problem of worklessness and local job creation.
The central funding streams that are most relevant are:
— Skills funds (supported by the SFA and
YPLA).
— Health funds aimed at reducing spending
on worklessness related conditions.
These programmes and funds, coupled to the funding
streams from Councils need to be integrated to ensure they have
the greatest effect on carefully selected outcomes relevant to
the area. It will be important for LEPs to show how they can shape
the national programmes around the needs of the local area while
meeting the particular outcomes required by those national policies.
For example LEPs will need to show that Regional Growth Fund projects
will both support immediate needs for economic support and reduce
long term differences in wealth creation between the different
regions.
LEPs will be the appropriate level to focus
the design of these integrated programmes by bringing together
community support and national funding streams to achieve the
twin priorities: long term development paths for the workless
and resilient local economies.
Recommendation 3: Given the scale
of problems of worklessness and the sharply reduced levels of
public funding, LEPs would have to focus their efforts on key
priorities. This will involve mobilising community resources and
adopting a total place approach, concentrating scarce national
programme resource around key priorities, including in particular,
the needs of the workless
4. MAXIMISING
THE IMPACT
OF PRIVATE
SECTOR INVESTMENT
Private sector investment will be a critical
factor in building local economies, more so than in the past in
light of cuts in public spending. LEPs will need to avoid competitive
bidding for inward investment between themselves which would be
needlessly expensive. Instead they will need to help build relationships
between private companies and local workforce and the workless.
There are an increasing range of examples of
companies building these types of links with local institutions,
communities and people. Many companies have supported local community
development as part of a policy of Corporate Social Responsibility.
Others, notably companies supplying the local public sector, have
done so as part of their contracts with the Council or have agreed
such conditions as part of S106 planning agreements. There is
a strong argument that organisations receiving public money should
be required to deliver agreed social outcomes as part of their
contract.
In summary there is considerable scope for organisations
that act as "midwife" for the process of bringing together
investment in capital and local "human" capital and
the LEPs have the scope and position to play this role as appropriate
for each area.
Recommendation 4: With the reduced
public funding private sector investment in local areas would
become more important. The LEPs will need to ensure they take
advantage of opportunities to link privately driven investment
with local resources, particularly the contribution the workless
can make.
5. MANAGING AGENT
ROLE FOR
PRIVATE AND
VOLUNTARY SECTOR
STRATEGIC PARTNERS
The key starting points of LEPs will be to understand
the economic needs of their communities and to understand the
structure of the local economy. Their role should be as a service
"commissioner", deciding the outcomes needed and choosing
the appropriate strategy to achieve them in consultation with
local people and providers. Scarce local expertise and limited
public funds will mean that LEPs must be prepared to bring in
strategic partners to support the delivery of their core priorities.
This is particularly likely to be required when
setting up and managing integrated workless support/economic regeneration
programmes. These will have complex outcome targets which will
require high levels of expertise in the design of effective solutions.
They will also demand knowledge and experience of building complex
supply networks in the community and in the wider economy. Particularly
important will be expertise in both understanding and engaging
local communities and implementing effective strategies to tackle
worklessness and the development of enterprise.
Recommendation 5: LEPs' principle
role should be as commissioners of programmes designed to achieve
economic success. LEPs should then be ready to bring in private
and voluntary sector partners to act as managing agents to achieve
their major economic priorities.
6. CONCLUSIONS
Local government and LEPs in particular, face
very significant challenges in ensuring that the resources of
local communities are mobilised to cope with the increasing economic
needs of communities in face of significantly reduced public resources.
The needs of the workless will become particularly acute as many
areas face lower rates of job creation.
We must not waste—as we have in the past—one
of the community's key resources, the contribution that the workless
in a community can make. The cost of allowing people, especially
the young, to move further and further from the labour market
will be high in the short term. There will be higher benefit payments
and a greater call on local services such as the police, health
and social services. The long term effects are even more damaging.
Recent studies of the long run impact of the 1980s recession have
shown that the contribution of a whole generation of young people
can be lost.
There is strong evidence that local government
can have a very significant impact. They can co-ordinate and orchestrate
the contributions of community, private sector and public expenditure
in rebuilding local economies with long term resilience. As important
they can ensure those local economies meet the needs of the community
as a whole, and especially its most vulnerable members.
The potential of LEPs as a focus for all those
who contribute and benefit from local economic development can
be best mobilised if they work as commissioners of economic outcomes.
They are able to understand their communities and know how to
bring in the expertise of both private and voluntary sector providers.
They need to combine this approach with strong leadership and
political vision so they are able to resist threats to economic
development schemes that have arisen in the past from fragmented,
short term decision making.
In summary LEPs have the potential to become
a focus for genuine local economic development programmes that
meld community effort, private sector investment and targeted,
integrated public service investment. We cannot afford to waste
resources in pursuing silo based programmes, either within the
economic development field or, more generally, across the local
public sector.
SUMMARY OF RECOMMENDATIONS
Recommendation 1: Scope and Scale
The scope of LEPs must be sufficient to match
those of the local economy and the scale of their activity and
objectives sufficient to make an appreciable impact on the economy.
Recommendation 2: Joining up Support
for the Workless with Job Creation
The LEPs represent an opportunity to join up
services to the workless with programmes to support job creation
and enterprise, thereby making the programmes more effective in
reaching their objectives and generating savings in local support
services.
Recommendation 3: Community and
Public Sector Support for the Workless
Given the scale of problems of worklessness
and the sharply reduced levels of public funding, LEPs would have
to focus their efforts on key priorities. This will involve mobilising
community resources and adopting a total place approach, concentrating
scarce national programme resource around key priorities, including
in particular, the needs of the workless.
Recommendation 4: Private Sector
Contribution
With the reduced public funding private sector
investment in local areas would become more important. The LEPs
will need to ensure they take advantage of opportunities to link
privately driven investment with local resources, particularly
the contribution the workless can make.
Recommendation 5: Strategic Partners
LEPs' principle role should be as commissioners
of programmes designed to achieve economic success. LEPs should
then be ready to bring in private and voluntary sector partners
to act as managing agents to achieve their major economic priorities.
16 August 2010
1 One particularly glaring current example is the Olympic
development in east London where of 7,000 construction job opportunities
only 4% have gone to people living in the five surrounding Boroughs
where rates of worklessness are especially high. Back
2
There are significant success stories in this area of work. For
example A4e's Intensive Start-up Programme in the North West works
in all the region's local authorities. Running since March 2009,
the programme has created 3,292 businesses and 3,398 jobs. This
has been achieved through a prime contracting approach. A4e takes
on all managing agent functions (programme and performance management),
overseeing delivery through a network of local public and third
sector suppliers Back
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