A Local Healthwatch for each Local Authority – a Major Opportunity for Social Enterprise?

Background

2013 will be a year for defining ‘Social Enterprise’, especially in the National Health Service in England. This Background section explains why.

(From the outset, Huckfield declares an interest in all this as a Member of the Board of the Social Entrepreneurs’ Network Scotland and a firm supporter of Social Enterprise)

Andrew Lansley’s Health and Social Care Act March 2012 gives all Local Councils a stronger role in shaping health and care services through setting up Health and Wellbeing Boards, which bring together local Councillors, Directors of Adult Social Services, Children’s Services and Public Health, Clinical Commissioning Groups and patients’ views to be represented by a new local Healthwatch (formerly called Local Involvement Networks). Local authorities must all employ a Director of Public Health and will become responsible for the health of their local populations.

Huckfield, like many others, is not pretending that these new Healthwatch bodies will be a countervailing power to GPs’ Clinical Commissioning Groups as the big Budget Holders. Through having a seat on Health and Wellbeing Boards, a local Healthwatch will be able to provide advice and information about access to local services and choices available to patients. It will be able to stress concerns, visit health and care centres, and hopefully through sitting on the Health and Wellbeing Board, at least find out something about what’s happening.

But beyond this, a local Healthwatch won’t have much real power.

(For those who have lost track on new NHS Structures under the Health and Social Care Act 2012, there are useful summaries on the UK Parliament site and on the Department of Health site at Health and Social Care Act Explained. There’s also a candid summary of events throughout the 2010 to 2012 passage of the Act – “Never Again” by the Institute of Government and the King’s Fund - which shows foundations laid for the 2012 Act by the previous Labour Government.)

The potential breakthrough for Social Enterprise is that the 2012 Lansley Act replaces a key Section in the Local Government and Public Involvement in Health Act 2007 so that “the body contracted to be the local Healthwatch must be a ‘body corporate’ (ie. a legal entity), which is a Social Enterprise.”.

As the Department of Health’s Summary Report on Issues Relating to Healthwatch Regulations July 20 2012 shows on page 2, Social Enterprise UK was consulted about all this. This Summary Report also makes it clear on its page 4, Section 1.11 that “The proposed criteria align with the principles promoted by organisations such as Social Enterprise UK”.

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Not Much Doubt about the Regulations

There was no ‘Social Enterprise’ definition in the Public Services (Social Value) Act March 2012, which “requires public authorities to have regard to economic, social and environmental well-being in connection with public services contracts”, that is to say, written contracts in which a contracting authority engages a person to provide services.

These Regulations therefore represent the first attempt under Coalition Government legislation to define ‘Social Enterprise’ in detail. What follows shows that from mid 2012 there should not have been much doubt about their content.

In June 2012, the Local Government Association published Get in on the Act: Health and Social Care Act 2012. Page 14 is clear about Section 183: Local Healthwatch bodies.

“Section 183: makes provision for contractual arrangements between local authorities and LH, which must be a Social Enterprise. It also enables local authorities to authorise LH organisations to contract with other organisations or individuals (LH contractors) to assist them to carry out their activities.”

Accompanying the Regulations, the Explanatory Memorandum to the Parliamentary Joint Select Committee on Statutory Instruments on pages 8 to 10 is comprehensive about the forthcoming definition of ‘Social Enterprise’

“7.15 Local Healthwatch organisations will be social enterprises which satisfy the community interest test and other criteria. There is no single definition of a Social Enterprise and there are several legal forms. However, a general description would be ‘businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community’”.

Succeeding paragraphs of the Explanatory Memorandum refer to Local Healthwatch bodies’ satisfying a “community interest test”, provisions for distribution of profits and assets on dissolution.

Parliament’s Joint Committee (Lords and Commons) on Statutory Instruments is able to report on discrepancies and lack of clarity in Regulations which it considers. The Joint Committee on Statutory Instruments Publication List makes no reference to consideration of these Regulations, despite their significance in defining ‘Social Enterprise.’

But all these other publications should have left no doubt about the significance of forthcoming Regulations in seeking to define ‘Social Enterprise’. Following precedent, there is now every possibility that this definition will be replicated in Regulations under other legislation.

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2007 Local Government and 2012 Health and Social Care Acts and the 2012 Regulations for Local Healthwatch Bodies from April 2013

Though Huckfield is grateful that dilligent colleagues at “Though Cowards Flinch” have also signposted to the detailed Regulations shown below, what follows below is Huckfield’s interpretation.

1) Section 222 Arrangements under Section 221 (1) of the Local Government and Public Involvement in Health Act 2007 previously set out who may provide a “patients’ view” on a wide range of local health, care and social services. Subsection (2) says:

“(2) In this section, a reference to a “Local Involvement Network” is to a person who, in pursuance of the arrangements, is to carry on in A’s area activities specified in section 221(2) for that area”.

2) Section 183 of Andrew Lansley’s Health and Social Care March 2012, changes this:

“183: Local Authority Arrangements

(2) For Subsection (2) substitute—

“(2) The arrangements must be made with a body corporate which—

(a) is a Social Enterprise, and

(b) satisfies such criteria as may be prescribed by Regulations made by the Secretary of State.”

“(7) For subsection (8) substitute—

(8) For the purposes of this section, a body is a Social Enterprise if—

(a) a person might reasonably consider that it acts for the benefit of the community in England, and

(b) it satisfies such criteria as may be prescribed by regulations made by the Secretary of State.

(9) Regulations made by the Secretary of State may provide that activities of a prescribed description are to be treated as being, or as not being, activities which a person might reasonably consider to be activities carried on for the benefit of the community in England.

(10) In subsections (8) and (9), “community” includes a section of the community; and regulations made by the Secretary of State may make provision about what does, does not or may constitute a section of the community.”

3) The NHS Bodies and Local Authorities (Partnership Arrangements, Care Trusts, Public Health and Local Healthwatch) Regulations 2012, is Statutory Instrument 2012 (No 3094) under the 2012 Lansley Act. The Regulations were laid before Parliament on Monday 17 December 2012:

“Criteria concerning Social Enterprises
35.—(1) For the purposes of section 222(8)(b) of the 2007 Act (Local Healthwatch: Social Enterprises) the criteria prescribed are that the constitution of the body must—

(a) state, or contain provisions which ensure, that not less than 50% of its distributable profits in each financial year will be used or applied for the purpose of the activities of that body

(b) contain a statement or condition that the body is carrying on its activities for the benefit of the community in England, and

(c) where appropriate, contain provisions relating to the distribution of assets which take effect when that body is dissolved or wound up, as specified in paragraph (2).

(2) The provisions referred to in paragraph (1)(c) are ones which—

(a) require that the residual assets of the body be distributed to those members of the body (if any) who are entitled to share in any distribution of assets on the dissolution or winding up of that body according to those members’ rights and interests in that body

(b) in the case of a company not limited by guarantee and registered as a charity in England and Wales, provide that no member shall receive an amount which exceeds the paid up value of the shares which the member holds in the company, and

(c) designate another social enterprise (within the meaning of section 222(8) of the 2007 Act) to which any remaining residual assets of the body will be distributed after any distribution to members of the body.

(3) The criteria prescribed in paragraph (1) do not apply to the following bodies—

(a) a Company Limited by Guarantee and registered as a Charity in England and Wales

(b) a Community Interest Company registered as a Company Limited by Guarantee; and

(c) a Charitable Incorporated Organisation (within the meaning of Part 11 of the Charities Act 2011(1) (Charitable Incorporated Organisations).”

Though many, including Huckfield, would still be concerned about distribution and the ‘asset lock’, it would have been better if the definition for ‘Social Enterprise’ was based on Sections 35 (1), (2) and (3) inclusively together rather than being either 35(1) or 35(3).

But under these Regulations, it now appears that any organisation, which doesn’t distribute more than 50% of profits, includes a statement of community benefit and some benevolent phrases on distribution of assets, can now call itself a ‘Social Enterprise’.

This new definition of Social Enterprise opens the door very wide. Huckfield believes that this is the first time ‘Social Enterprise’ has been defined in this way.

“Teach Yourself Lansley”

Huckfield is reminded of a previous definition of ‘Social Enterprise’ and is grateful to the Guardian’s signposting on Thursday 02 March 2012 to John Lister’s ““Teach Yourself Lansley”“. This defined ‘Social Enterprise’ as follows:

“Social enterprise: (oxymoronic noun) interim nonprofit private provider paving the way for proper private takeover”

After this definition of ‘Social Enterprise’ in these Regulations, Social Enterprise won’t just be oxymoronic.

There is a real risk that for many in the media and wider public ‘Social Enterprise’ becomes a euphemism encompassing structures ranging from private companies and multinationals with a progressive Corporate Social Responsibility policy to local community structures whose main purpose is changing lifestyles and communities.

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The Social Enterprise UK Badge

The difficulty for Social Enterprise UK may be that the Criteria for its Membership Badge don’t appear very different:

• “Our business has a clear social or environmental mission that is set out in its governing documents

• We are an independent business and we earn more than half of our income through trading (or we are working towards this)

• We are controlled or owned in the interests of our social mission

• We reinvest or give away at least half our profits or surpluses towards our social purpose

• We are transparent about how we operate and the impact that we have”

For those, including colleagues at “Beanbags and Bullshit”, who apparently may believe that “controlled or owned in the interests of our social mission” above provides an adequate safeguard, the Social Enterprise UK Membership Badge Criteria say:

“For those organisations that are keen to issues shares we believe that control should remain with the social mission. This could be through a Golden Share issue or it could be by ensuring that the majority and controlling stake is held either in trust or by another body with a social purpose”.

This Golden Share is explained as “a nominal share which is able to outvote all other shares in certain specified circumstances”. Well paid lawyers will be fortified by experience which shows that whoever holds a Golden Share must be prepared to use it.

From this it seems that Social Enterprise UK may not be taken too seriously if it complains about Health Secretary Jeremy Hunt’s new definition of ‘Social Enterprise’, when those who wear its own Badge may not to many people look much different.

Any readers in doubt about any of this need only read the Chief Executive of Social Enterprise UK’s “Hello Autumn” Blog of Tuesday 06 September 2011:

“At Social Enterprise UK HQ we’re seeing an upsurge in interest – potential start-ups looking for advice, Social Enterprises realising that they’re part of a movement (it still amazes me how many organisations there are out there that don’t realise they’re actually a Social Enterprise), but perhaps most interestingly, big corporates are knocking on our door wanting to know how they can get into the world of Social Enterprise”.

This story above about the 2012 Local Healthwatch Regulations for April 2013 shows that those “big corporates” won’t need to bother knocking on the Social Enterprise UK door. They only need to read the Regulations.

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Prisoners’ Week Scotland, organised by Prison Chaplains, has organised a commendable series of events throughout this week. But on Wednesday 21 November, few of the 60 of us attending might have anticipated that an evening in Perth Prison would cause the Scottish Daily Mail to reveal its own Inconvenient Truth.

As a panel member, Graham Grant, the paper’s Home Affairs Editor, unashamedly admitted that his paper’s editorial policy was driven by giving its readers what they wanted to hear. His paper simply sought to reflect the views of its readers.

Earlier, in reply to a question sent in from Peterhead Prison about publishing “good news stories”, he didn’t think that prisons were for “healing souls” or for spiritual healing. The perspective of his readers was that too little was spent on victims. It was hard to find a “champion of prisoners’ rights”.

His parting shot for the evening was that prisoners should serve the full sentence and the Scottish Penal System faced an “identity crisis”.

Perhaps he was pretending not to hear the evening’s careful opening contribution from Mike Ingles, Perth Governor, who had started as a Prison Officer in 1995. Following £80mn public expenditure in Perth Prison, he saw his job as turning this investment into outcomes. The refurbished prison was a platform for safer communities and reducing reoffending.

Clarion Calls for Reform

The Governor might also have been thinking of a series of recent reports advocating reform of Scotland’s Criminal Justice System to reduce reoffending:

• Scotland’s Choice: Report of the Scottish Prisons’ Commission July 2008.

  In para 3.45 on page 41, under “Community Justice, Prisons and Resettlement”, Henry McCleish’s Commission reported: “The most important drivers of offending and reoffending are beyond the reach of the penal system; some suggest that recognition of the social and cultural causes of reoffending makes it unwise to overstate the role that the penal system can play in reducing reoffending”

• Audit Scotland’s “An Overview of Scotland’s Criminal Justice System” September 2011.

  On page 33, para 98 the Report says “In 2002, the UK government estimated that the cost to the criminal justice system of each prisoner who reoffended on release was £65,000 (around £80,000 at today’s prices). In 2006/07, 6,890 people in Scotland were released from custody and more than 4,200 had reoffended within two years. The costs to the Scottish criminal justice system resulting from this level of reoffending have not been estimated but they are likely to be similarly high”.

• Scottish Government Justice Analytical Services “What Works to Reduce Reoffending: A Summary of the Evidence” October 2011.

  Page 44 “Concluding Remarks” says “Key events in offenders’ lives such as parenthood and re-integration in the local community impact on their motivation to stop reoffending” and

  “Rehabilitative interventions with the strongest evidence base are cognitive-behavioural programmes and supportive and interpersonally skilled supervision”.

• Elish Angiolini’s “Commission on Women Offenders” April 2012.

  This Report goes much wider than Cornton Vale. Page 85, para 312 says:
  

  “There is also a lack of a shared vision or common goal directed at delivering the best outcomes for women offenders; fragmented and short-term funding; and an absence of any systematic measurement of outcomes or of what programmes are effective in reducing reoffending.”

  Page 85, para 313 continues:

  “This has resulted is inconsistent and ineffective service provision, which has seriously impacted on the positive outcomes which are being achieved for women offenders and undermines confidence in the efficacy of community disposals”

• Scottish Government’s “The Strategy for Justice in Scotland” September 2012

  Page 49 on “Reducing Reoffending” says “We understand that closer integration of services to rehabilitate offenders is essential to address the root causes of offending, and ensure a longterm solution for future generations. Much better links must be developed with employment, housing, education and health services, helping offenders to access the services they need to desist from crime”.

• Audit Scotland’s “Reducing Reoffending in Scotland” November 2012.

  Page 34, para 124 says “Given the findings of this audit, improvements are required in all of these areas. Overall, a more coherent approach at national, regional and local levels is required, with a shared commitment to reduce reoffending among all the bodies who work with offenders, including criminal justice bodies, councils, the judiciary, the NHS and the third sector”.

There is a strong and coherent threat running throughout all these Reports – that Scotland’s Criminal Justice System has not been as effective as it might be in reducing reoffending.

But throughout the evening in Perth Prison it was some of the prisoners attending who themselves provided the best response to the Daily Mail. One “lifer” was proud of the hairdressing certificate he had attained. Another recognised prison as a place of rehabilitation. When asked by Gordon Grant who they thought paid their wages, their blunt riposte was that they earned their pay through doing work in prison.

Communities of Grace

One of the more thoughtful contributions of the evening came from a fellow panelist on the platform, Rt Rev Albert Bogle, the new Moderator of the General Assembly of the Church of Scotland. Responding to questions about those leaving prison, he offered the services of the Church of Scotland as a hosting place for organisations coming together for supporting released offenders. Some church groups already formed the basis of Family Centres. Though he recognised that communities outside often had concerns about those released from prison, he also recognised the qualities and skills of those working inside prisons and how these might be used beyond prison walls. Churches might offer “communities of grace” to assist in this process.

The Prisoners’ Forum Panel Chair, BBC TV Presenter, Isabel Fraser, reminded us about One Stop Shop Community Justice Centres or “hubs” in Elish Angiolini’s Commission on Women Offenders.

There were several contributions, including from prisoners, about difficulties encountered on release, inadequate temporary accommodation and the temptations of reversion to previous addictions and other problems.

Marina Shaw, Manager of Circle Scotland’s Families Affected by Imprisonment team, urged more preventative work before offenders were caught up in the Criminal Justice System and more restorative justice. She recalled a Barlinnine Prisoner who said that when people in society came to him he felt he could return to society. Plans for leaving should start at the beginning of sentences rather than at the end. Her team sometimes worked with those released and their neighbours for some months.

Pete White, Founder and Coordinator of Positive Prison, Positive Futures, said that despite the Daily Mail’s coverage, some good services were available. There should be more help not to get into prison and more help when coming out. Earlier he said that if society supported the Criminal Justice System, it should also offer more support to those leaving it.

Franny McGrath, Operations Manager for Perth and District YMCA, shared concerns about the quality of accommodation available on release and advocated working with prisoners before they came through the gate. He felt that the Third Sector often showed more consistency.

Public Social Partnerships and Reducing Reoffending Change Fund

During the evening there were several contributions about the roles of public and Third Sector providers and their working together.Huckfield is concerned that there was not more awareness of the Scottish Government policy of Public Social Partnerships and its £7.5mn Reducing Reoffending Change Fund, administered by a very competent team at The Robertson Trust.

There are other Charitable Trust and Foundations which take an interest in projects for previous offenders re entering the community and to prevent reoffending.

And, Finally

At both the Perth evening and at the Barlinnie “No Offence” Conference on Wednesday 07 November, Huckfield was struck by the number of Prison Officers and inmates who attended and were obviously taking a real interest in proceedings. Though some prisoners spoke, you could see that some Officers also had something to say. Huckfield hopes that future occasions will provide an opportunity for Prison Officers’ contributions too. At the recent Prison Officers’ Association Scotland Conference in Peebles on Wednesday 31 October 2012, delegates welcomed what the new Scottish Prison Service Chief Executive said about their role outside prisons too.

Once again, Rev Kenneth McGeachie, the Perth Chaplain and Scotland’s Prison Chaplains are to be congratulated for their organisation of Prisoners’ Week Scotland. Those attending in Perth Prison last Wednesday evening were appreciative of their endeavours in providing a bridge between those working for Scottish Prison Service and those “outside”.

THIS CONFERENCE IS A VERY TIMELY EVENT

This piece represents a strong Huckfield recommendation. At only £95, this Conference represents exceedingly good value. A similar London Conference would be at last £300 plus fares.

This is the Black Country Partnership for Learning Online Booking Form.

Black Country Partnership for Learning

Black Country Partnership for Learning (BCPL) includes the University of Wolverhampton and seven Further Education Colleges:

• Dudley
• Halesowen
• King Edwards
• Sandwell
• Stourbridge
• Walsall
• Wolverhampton

BCPL held a highly successful 14-19 Years Post Wolf Conference on Friday 25 November 2011, with 100 attending from the West Midlands and beyond.

Friday May 25th 2012 at the Hawthorns Conference Centre, West Bromwich Albion Football Ground

This timely Conference which includes speakers and a programme which covers a very wide range of Further/Higher Education topics, especially if you read David Kernohan’s Wonke piece on Thursday 29 March 2012 about HEFCE’s projected grants for 2013, and all the uncertainties for the future arising from this.

From well-published delays in the Government’s Higher Education Bill, some colleagues may have thought things were settling down. But several other pieces recently including Andrew Fisher on Student Number Control, have highlighted continuing uncertainties for Higher Education, including Higher Education delivered in Further Education Colleges – not just for 2013 but in years to follow, especially since HE Margin bidding will continue.

Huckfield knows Further and Higher Education colleagues who, though they have developed strategies for 2013 enrolment, are still much perplexed about the years to come. This Conference is a good chance to get some answers.

Conference speakers range from the Minister for Higher Education and Science, Rt Hon David Willetts MP, through Higher Education in Further Education Specialists, including those from the private sector, including online provision to more local speakers with their local interpretations.

Conference Aims and Purpose

• To receive progress relating to the changing policy framework and institutional impact for Further and Higher Education Institutions
• To reflect on the new landscape emerging at the Further and Higher Education interface following the HE White Paper 2011
• To discuss practical responses, local partnerships and developments for 2012/2013 activity in colleges, universities and with private providers

Conference Programme and Speakers

09:45: Background and Context to the Conference

• BCPL Chair & Director

10:00: The Changing HE Policy Framework

• Rt. Hon David Willetts MP, Minister for Higher Education and Science, Department for Business, Innovation and Skills
• A Perspective from the Association of Colleges – Nick Davy, HE Policy Manager

11:00: The New Landscape

• Validation and Accreditation Services for Higher Level Provision – John Davies, Head of Programme Development, Higher Education Awards, Pearson
• Foundation Degree Awarding Powers for FE Colleges – John Ellison, Head of Higher Education, New College Durham
• FE/HE and Private Sector Relationships in Higher Education – Peter Crisp, Chief Executive of BPP Law School and Adam Temple, Managing Director of BPP Centre, Birmingham

12:00: Panel Session/Questions and Answers from Floor

12:30: Lunch

13:30: Practical Responses and Local Partnerships

• Participation, Progression and Partnerships: Real Inclusion in Practice – Professor David Green, Vice Chancellor & Chief Executive, University of Worcester
• Local Enterprise Partnerships and Employer/Demand-Side Perspectives – Professor Ian Oakes, Pro-Vice Chancellor, Research and Enterprise, University of Wolverhampton and Black Country Local Enterprise Partnership Board

Panel Session/Questions and Answers from Floor

14:30: Practical and Local Developments

• Partnership working across Students’ Unions and College based Student Support functions across Birmingham and the Black Country – Luke Millard, Birmingham City University and Paul Chapman, BCU Students’ Union and Kim Hughes, Students’ Union, Dudley College
• Flexible, Open and Distance Learning Approaches to HE Partnerships – Dr Philip Hallam, CEO, Resource Development International Ltd (RDI)

Panel Session/Questions and Answers from Floor

15:30: Plenary Session– Key issues for participants, reactions to inputs, impact and implementation timelines 2012/2013 and beyond

AND, FINALLY

Huckfield attends many conferences and seminars. There is much uncertainty facing Further and Higher Education in the years to come. With this range of speakers and issues covered you won’t do much better anywhere else.

As above, this is the Black Country Partnership for Learning Online Booking Form.

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BACKGROUND

The Huckfield Killing Social Enterprise Softly briefing last week was pessimistic about the openings available for Social Enterprise and Third Sector organisations in their bidding to deliver public services.

The Work Programme is the Government’s preferred delivery model. With a few large contracts and major providers taking the risk it’s easy to administer. Social Enterprises and the Third Sector are very junior partners. Killing Social Enterprise Softly also mentioned the way in which HM Prisons and the National Offender Management Service are now contracting out more HM Prison and offender management services, again using the prime contractor model.

With many others, Huckfield on Friday 24 February attended a briefing by SERCO, Catch 22 and Turning Point at Durham University, with SERCO as lead partner in The Local Alliance. Another partnership of HM Prisons, Working Well, Shaw Trust and Mitie is also doing the rounds. No wonder that some Durham questioners wondered whether they should submit Expressions of Interest to more than one prime!

Well Done, NOMS

National Offender Management Service is now offering a ray of hope for Social Enterprises and the Third Sector in England. The NOMS briefing Huckfield attended on Wednesday 14 March in Leeds was much more cheering since the presenters clearly wanted to support Social Enterprises to take part.

Congratulations are due to the NOMS management team who are delivering this ESF Technical Assistance programme, especially for taking the trouble to hold this series of seminars at an appropriate level. This is the closest that many of us have come to the “ESF Good Old Days” before CoFinancing, under which organisations had more bidding flexibility. Perhaps there might be more Huckfield thoughts on ESF CoFinancing another day?

To Save Yourself Time

Since this is a detailed Huckfield briefing, to save time, use this link to go straight to HOW TO BID below. This enables you to skip background details and takes you directly to details of the NOMS ESF Technical Assistance current bidding process for Social Enterprises in England.

THE NOMS EXAMPLE

This Section below describes other ESF CoFinancing Organisations which may have access to Technical Assistance support for Social Enterprises and the Third Sector. ESF Technical Assistance is not delivery funding but funding to enhance delivery capabilities.

Other ESF CoFinancing Organisations Please Copy

This Section below suggests lessons for others from the way in which NOMS is operating its ESF CoFinanced Programme. This Section also mentions Wise Group – a Social Enterprise from Scotland – which is delivering the DWP’s Troubled Families “Family Wise” ESF programme in the North East.

TECHNICAL ASSISTANCE

This Section below describes ESF Technical Assistance and how NOMS will operate its Programme to support Social Enterprises and the Third Sector.

ESF Technical Assistance

This Section below shows how the European Social Fund defines Technical Assistance.

NOMS Technical Assistance

This Section below describes how NOMS will operate ESF Technical Assistance to support Social Enterprise and the Third Sector.

NOMS Rationale for Technical Assistance

This Section below shows NOMS’ reasoning behind using Technical Assistance in this way.

HOW TO BID

This Section below describes in detail the way in which the bidding process will operate.

Main Aim of this Bidding Opportunity

This Section below describes some key features of the bidding process.

Approach to Bidding

This Section below describes what NOMS seeks to achieve through inviting Social Enterprises to bid for Technical Assistance support.

Timescales and Funding

This Section below describes the timescale and funding ‘lots’ for which Social Enterprises can bid. There are 15 bidding ‘lots’ across England.

Key Bidding Requirements

This Section below describes the most important issues to keep in mind while initiating a bid. Once bidders register their interest, there is time between April and June 2012 to work up a full proposal.

Projected Outcomes

This Section below shows what NOMS would like to achieve from the Technical Assistance bidding process.

NEXT STEPS

This Section below gives further details of forthcoming Huckfield briefings, which will focus on encouraging other ESF CoFinancing Organisations to follow the NOMS example of making Technical Assistance available to Social Enterprises and the Third Sector.

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MAIN HUCKFIELD BRIEFING BEGINS HERE:

Links have already been provided above to those sections which now follow.

THE NOMS EXAMPLE

This Section provides further background on NOMS Technical Assistance bidding.

Other ESF CoFinancing Organisations Please Copy

Though the Work Programme has an Innovation Fund available to assist organisations, this is not processed in the same way.

This Huckfield briefing hopes that other ESF CoFinancing Organisations, including the Department of Work and Pensions and Skills Funding Agency – which have bigger ESF allocations than NOMS – will please copy the NOMS example. Their ESF CoFinanced programmes include Technical Assistance. Following further discussion, some of this might be used in the same way.

DWP uses ESF to support a range of delivery programmes, including supporting troubled families. Many DWP and other programmes seek to reach those hardest to help. This is not ideal territory for big prime contractors, which need the services of smaller Social Enterprises and Third Sector organisations to achieve their outputs. At least one of the DWP’s ESF CoFinanced Troubled Families prime contractors – the Wise Group in the North East – is a strong Social Enterprise.

Though this Huckfield briefing recognises that the current 2007-2013 EU Structural Funds Programme is nearing a conclusion, previous EU Programme experience shows it will take until 2015 to wind up the Programme. Huckfield briefings will continue to press for other ESF CoFinancing Organisations to use any Technical Assistance in ways similar to NOMS and also for some ESF in the new 2014-2020 EU Structural Funds Programme, when this is agreed, to be used in the same way.

The NOMS High-level specification for Social Enterprise (SE) Consortia Building programme (Technical Assistance funded) also refers to page 5 of the EU Sustainable Development Strategy 10917/06 from 2006:

“INVOLVEMENT OF BUSINESSES AND SOCIAL PARTNERS
Enhance the social dialogue, corporate social responsibility and private-public partnerships to foster cooperation and common responsibilities to achieve sustainable consumption and production”.

A further Huckfield briefing will feature Community Benefit in Sustainable Procurement, which also supports Social Enterprise and Third Sector delivery and fits within the EU Sustainable Development Strategy.

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TECHNICAL ASSISTANCE

This Section describes how NOMS will use ESF Technical Assistance to help Social Enterprises and the Third Sector.

ESF Technical Assistance

This Technical Assistance is not a bidding opportunity to deliver services but rather to help Social Enterprises to form consortia or new structures to deliver. The European Social Fund England site explains Technical Assistance:

“Technical Assistance (TA) funds finance the preparatory, management, monitoring, evaluation, information and control activities of the Operational Programme, together with activities to reinforce the administrative capacity for implementing the funds, at national and regional levels. These funds are predominantly used to support CoFinancing Organisations (CFOs) in delivering ESF as they are responsible for 95% of programme activity”.

NOMS Technical Assistance

On page 3 of the High Level Specification for Social Enterprise (SE) Consortia Building programme , NOMS has defined its use of Technical Assistance more specifically. Through using ESF Technical Assistance NOMS seeks:

“to develop the Social Enterprise market place to better enable such organisations to participate in the current and future Cofinance programmes. This procurement opportunity has the expressed aim of enabling consortia building within the social enterprise sector, with a particular focus on SMEs in the market. This opportunity is designed to enable the sector to organise into entities or structures that can, through working with NOMS CFO and others help to deliver policy objectives.

“This opportunity is therefore designed to test how enterprises and other organisations can work together to create a ‘value’ or ’supply chain’ that can offer offenders the opportunity to gain skills and employment (supported by other multi-pathway interventions). These value or supply chains should also create environmental and social benefit beyond that experienced by the participants themselves and which is offered through a single contract to the Authority or one of its prime providers.”

It is important to note that though this is a bidding opportunity for NOMS ESF Technical Assistance, the successful Social Enterprises do not necessarily have to use their new structures for NOMS delivery. However, since NOMS has regional prime contractors across England, it is advisable to discuss any bids with them first. Contact details are provided below in HOW TO BID below.

Rationale for NOMS Technical Assistance

The High Level Specification for Social Enterprise (SE) Consortia Building programme in Background on page 1 shows that:

“NOMS Co-Financing (CFO) Programme will provide support to approximately 110,000 offenders by December 2014. The Co-Financing Programme is supported by money from the European Social Fund (ESF) and then matched with complimentary delivery through NOMS contracted out provision. Estimated total programme value is in excess of £275m. Delivery is via a prime or consortia contractor model, with specialist delivery provided by sub-contractors or partners.

“As part of the delivery requirement, each prime provider must have a Social Enterprise element and there should be a strong link between the main programme and the additional work commissioned via Technical Assistance”.

NOMS deserves credit here for insisting that prime contractors must include Social Enterprise elements – which this Technical Assistance programme is designed to support.

Page 1 of the High Level Specification for Social Enterprise (SE) Consortia Building programme continues with an explanation of why NOMS is doing this:

“The government is committed to removing pre-qualification processes for contracts under £100,000 but this is unlikely to impact on CFO procurement as the lots have been and will probably remain substantially above that level. The only opportunities therefore for SME Social Enterprises to participate would be either as part of a substantive consortium able to meet the prime provider thresholds or more likely as a sub contractor.

“The current CFO phase 2 contracts (worth in total £89m) have 419 subcontractors /partners, of which only 36 (8.5%) are currently identified as Social Enterprises. This relatively low level of representation, together with the anecdotal evidence collected at NOMS CFO Programme regional events and more informal consultation indicates that some structural intervention is necessary in order to achieve programme objectives”.

NOMS thus clearly recognises that there is inadequate participation from Social Enterprises and the Technical Assistance programme seeks to do something about it.

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HOW TO BID

This Section highlights some of the main points to keep in mind during the bidding process.

Main Aim of this Bidding Opportunity

Page 3 of the High Level Specification explains:

“NOMS CFO has secured additional Technical Assistance funding from ESF to develop a number of elements to increase the effectiveness of the Co-financing Programme, which will deliver services to offenders to increase access to mainstream opportunities up to 2014. One of these elements includes a programme of work designed to develop the social enterprise market place to better enable such organisations to participate in the current and future Co-finance programmes”

On page 4 of the High Level Spefication, NOMS explains:

“The primary objective is to award grants for the creation of new SE consortia models that will be able to better participate in current and future tendering opportunities. The Authority will also be providing Technical Support to underpin this procurement, with a separate procurement opportunity to be launched during the coming months for defined Technical Support.”

“Potential consortia models will need to demonstrate how multiple partners (or elements of the chain) offer specialist services or capacity or trading environments; each will also need to demonstrate as part of contract compliance, the additional value they are creating within the community or area in which they are/will be operating. The focus of this procurement is the development of the SE market place and the ability of small and medium sized enterprises to participate in wider CFO and other programmes.”

Approach to Bidding

The High Level Specification continues on page 4:

“Potential consortia models will need to demonstrate how they are supporting this development and incorporating partners from the sector. Potential consortia models will also need to evidence the strength of the SE offer in their proposal and the number of organisations involved”.

Though earlier information about this bidding opportunity indicated a deadline of Friday 23 March 2012 for Expressions of Interest, NOMs has made it clear that it will be acceptable for Social Enterprises to express an interest until the beginning of April. Since there is not yet an Official Expression of Interest Form, it is best to e mail Simon Ambrose at NOMS. His contact details are: Simon Ambrose, initial NOMS contact.

• Simon’s phone is: 0300 047 5902
• Simon’s address is: 2nd Floor, 2.15 Clive House, 70 Petty France, London, SW1H 9EX

It is only necessary at this stage for a bidder or lead bidder to express an interest, perhaps with a brief summary of what is intended. Though no official Expression of Interest forms are yet available, contact with NOMS ensures that they register your details and ensure that interested Social Enterprises receive all relevant information.

There will be a period from April until June to submit a full application. This April till June period should afford good time to enable new partnerships and consortia to develop their offering. They will have from November 2012 until 2014 to deliver their project.

At the Leeds Seminar on Wednesday 14 March, detailed advice was on offer about the kind of Third Sector organisations which might be suitable for delivery of services, whether a new legal body, lead body or external organisations. Once formed or strengthened, these new structures might proceed to deliver a wider range of services – not necessarily for NOMS prime contractors.

While at this stage only £1.25mn is on offer for ESF Technical Assistance to help Social Enterprises to form consortia and develop their capacity, all this is targeted directly at and biased in favour of Third Sector organisations.

There was also guidance at the Seminar on the constitutional structures which Third Sector bidders might ultimately assume – ranging from Unincorporated Organisations and Charitable Incorporated Organisations through Industrial and Provident Societies and Community Benefit Societies to Community Interest Companies.

The Leeds Seminar also strongly recommended making contact with the NOMS prime contractors for the areas concerned, since they obviously have an interest in the further development of their delivery capacity.

The NOMS Prime Contractor in the North East is Pertemps, where the contact is Mark Harrison. Contact details are: Mark Harrison – initial Pertemps contact

• Mark’s phone is: 01642 495 460 and 077 396 77225
• Mark’s address is: Pertemps People Development Group, 7-9 Queen Street, Redcar TS10 1DY

The NOMS Prime Contractor in the North West is Merseyside Probation Trust, where the contact is Tracey Hill. Contact details are: Tracey Hill – initial Merseyside Probation Trust contact

• Tracey’s phone is: 01928 713 555
• Tracey’s address is: Runcorn Probation Office, Norton House, Crowngate, Runcorn WA7 2UR

Once again, potential bidders are strongly advised to engage in an informal pre bidding dialogue with the relevant NOMS prime contractor to ensure that they are aware what you seek to do and may be able to help. If successful, Social Enterprises which receive Technical Assistance will be in a good position to assist with prime contractor delivery.

The NOMS CoFinanced ESF consists of £1.25mn with bids open for 15 lots:

England (excluding South West):

• Lot 1: 1 x £250,000 This is for proposals that have national coverage
• Lot 2: 2 x £150,000 These are for proposals that are at a regional level
• Lot 3: 8 x £50,000 These are for ‘local’ proposals

South West (including Cornwall):

• Lot 4: 2 x £100,000
• Lot 5: 2 x £50,000

Once projects are up and running, the Technical Assistance grant at 100% will run from from November 2012 until October 2014. Additional technical support and advice will be made available to consortia lead organisations at different stages of the procurement process to enable them to strengthen and clarify their offer. The support will be universally available to all successful bidders at the respective stages within the same value lot.

Key Bidding Requirements

Page 6 of the High Level Specification shows that potential bidders should be able to demonstrate:

• The viability of creating a value or supply chain that will result in a legally constituted consortium established as a Social Enterprise. Potential bidders must also ensure that they can evidence the ability to incorporate Social Enterprise partners in their proposed consortia models as well as evidence of engagement and commitment from identified partners.
• That they have utilised the access to technical support (for example legal, governance, financial, HR) that will be provided by the Authority to assist in the development of their consortia, or utilised their own alternate support to evidence the viability of their proposals
• That they have developed and can offer referral routes that will deliver skills, employment and where included other support (across the reducing re-offending pathways) for offenders and which can also demonstrate a wider impact within the communities or societies within which they are operating or delivering. Such impact may be financial, social, economic, re-generational, environmental or other impact that, for example fits with the EU’s definition of sustainable development
• The effectiveness of their model through accepting referrals from CFO providers, probation trusts or prisons in sufficient numbers relevant to the scale of the offer outlined in the bid and through subsequent outcomes related to skills and employment.
• The ability to participate in and contribute to the shared learning around evidencing social value in a way that will help test the approach envisaged by the Public Services (Social Value) Bill
• That the potential consortia models are capable of funding their defined model through trading activity, social finance, contracts with CFO prime providers or funding obtained through other potential stakeholders (for example local or health authorities or housing associations) as a consequence of or in relation to the wider social impact that can be achieved

All this means that a wide range of technical support, additional posts, structures, systems and other changes might be funded – provided that NOMS can see that the Technical Assistance really is making a difference. NOMS will carry out usual required ESF monitoring duties.

Projected Outcomes

Page 6 of the High Level Specification shows that among NOMS’ anticipated outcomes will be:

• 15 legally constituted consortiums with which the Authority or its providers can contract (through a single contract with each consortium) to support the delivery of objectives and outcomes outlined in their bids.
• 15 cohesive (but potentially multi-faceted) referral routes that will deliver skills, employment and where included other support (across the reducing re-offending pathways) for offenders and which can also demonstrate a wider impact within the communities or societies within which they are operating or delivering. Such impact may be financial, social, economic, regenerational, environmental or other impact that, for example fits with the EUs definition of sustainable development.
• Consortia to demonstrate the effectiveness of their model through accepting referrals from CFO providers, probation trusts or prisons in sufficient numbers relevant to the scale of the offer outlined in the bid and through subsequent outcomes related to skills and employment.
• 15 consortia capable of funding their defined model through trading activity, social finance, contracts with CFO prime providers or funding obtained through other potential stakeholders (for example local or health authorities or housing associations) as a consequence of or in relation to the wider social impact that can be achieved.

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NEXT STEPS

Huckfield is a keen supporter of Social Enterprises. Further Huckfield briefings will feature:

• discussions with possible Social Enterprise bidding organisations in the North East and North West with support and guidance
• pressing for other ESF CoFinancing Organisations to use ESF Technical Assistance in similar ways to NOMS to support Social Enterprise and Third Sector Organisations
• encouraging the Scottish Government in discussion with DWP and others to use CoFinanced ESF in Scotland in similar ways, including support for the Work Programme. Further Huckfield briefings will cover the Innovation Fund for the Work Programme, since initial bidding for Round 2 has just closed
• encouraging and lobbying UK and Scottish Governments and ESF Cofinancing Organisations to make available ESF bidding opportunities for Social Enterprise and Third Sector Organisations, not just for Technical Assistance, but to fund their delivery too.

Finally, further Huckfield briefings will provide information as it becomes available.

So why not Subscribe to Updates in the right hand panel? It’s complete free.

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BACKGROUND

With ongoing reductions in public expenditure for infrastructure funding, this Huckfield briefing gives a summary of funding available in Scotland for further development of infrastructure projects. It does not seek to be exhaustive but to shed light on some sources with which all readers may not be familiar.

The following headings take you straight to sections concerned:

SCOTTISH INNOVATION

This Section offers a brief description which shows that there is more funding innovation in Scotland than is sometimes recognised or appreciated.

Glasgow Eastern Area Regeneration (GEAR)

This important partnership brought public and private sectors together with benefits for deprived communities in Glasgow.

Highland Housing Association Land Bank Fund

This important Highland Council/Highland Housing Association Land Bank Fund initiative deserves more detailed study.

Fife and East Kilbride

In Fife and East Kilbride there have been important research projects which are sometimes overlooked. Further Huckfield briefings will provide more details on these.

LOCAL COUNCIL BORROWING AND LOANS

The following represent general powers for local council borrowing which do not need special purpose vehicles:

Prudential Borrowing

A brief summary of the Prudential Borrowing Code and its implications for local councils.

Municipal Bonds

Faced by higher interest rates from the Public Works Loan Board, following the example of the Greater London Council and some Housing Associations, more local authorities are exploring issuing their own bonds.

SPECIAL PURPOSE VEHICLES

Rather than general powers, these mechanisms need specific assembly and formation:

Non Profit Distributing Organisations

NPDOs are sometimes called “PFI-lite”. Through the Scottish Futures Trust NPDOs represent the Scottish Government’s chosen vehicle for funding significant public infrastructure developments. Scottish Futures’ “hub” policy is still being developed across Scotland.

National Housing Trust

Through the Scottish Futures Trust, these involve partnerships between local councils and developers to build more affordable homes.

EUROPEAN FUNDING

Under some Priorities of the 2007 to 2013 Structural Funds Programmes, local councils and others may continue to make funding applications.

JESSICA

Funding under JESSICA (Joint European Support for Sustainable Investment in City Areas) represents an important programme funded by the European Commission, European Investment Bank and Scottish Government.

LEVIES AND TAXATION

This Section deals with Planning Agreements, Community Infrastructure Levy and Tax Increment Funding.

Planning Agreements

Planning Gain through Planning Agreements has been more widely used in England than Scotland.

Community Infrastructure Levy

In England, CIL is beginning to replace Planning Agreements under Section 106 of the Town and Country Planning Act 1990.

Tax Increment Funding

With the Scottish Futures Trust, the Scottish Government and local councils are setting the pace for the rest of the UK in this important new financing mechanism.

LOCAL COUNCILS AND COMMUNITY BENEFIT FROM RENEWABLE ENERGY

With more Councils defining and developing Community Benefit policies from renewable energy, especially wind farms, this is an expanding area of potential infrastructure funding.

Dumfries and Galloway

Following a detailed review in 2011, Dumfries and Galloway are developing a detailed Community Benefit policy.

South Lanarkshire

Especially with its well known Whitelee Wind Farm, South Lanarkshire has been a Scottish and UK pace-setter in defining community benefit from wind farms.

Scottish Borders

Scottish Borders is developing its Community Benefit policy. Its area includes the 10-turbine Brunta Hill Windfarm.

Highland Council

Highland Council announced its detailed Community Benefit policy, including funding for infrastructure, on Friday 24 February 2012. Highland is also the first council in Scotland to begin a detailed community benefit policy for offshore wind.

OTHER COMMUNITY BENEFIT FROM RENEWABLE ENERGY

Scottish and Southern Energy (Scottish Hydro) and the Forestry Commission are beginning to develop their Community Benefit policies across Scotland. While these are at a preparatory stage, their size they may have important implications for infrastructure.

Scottish and Southern Energy (Scottish Hydro)

Scottish Hydro policy across Scotland is beginning to emerge.

Forestry Commission

The Forestry Commission has pursued a tendering process for wind farm developments on its land. The £5000 per installed Megawatt tariff which has emerged has now set the benchmark for Scotland.

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SCOTTISH INNOVATION

The following show examples of innovation in Scotland which deserve more study and will be covered in more detail in further Huckfield briefings.

Glasgow Eastern Area Regeneration (GEAR)

GEAR activity from 1976 to 1987 is summarised in “Remaking Planning: The Politics of Urban Chance” in 1996 by Tim Brindley, Yvonne Rydin and Gerry Stoker:

“Private builders have been attracted to GEAR sites that have been reclaimed and attractively landscaped by the public sector. Initially, land was sold cheaply by the former public sector owners and in some cases, subsidised with public sector grants and underwritten by public sector guarantees to buy any properties not sold”.

Highland Housing Association Land Bank Fund

“Paying the Piper:Funding and Financing Infrastructure Issues for Housing in Scotland” March 2011 by Newhaven Research for the Chartered Institute of Housing, describes the Highland Council/Highland Housing Association Landbank initiative on page 45:

“In March 2005, Highland Council transferred the land to Highland Housing Association (HHA) for the open market value. Purchase of the land by HHA was funded by means of an interest free loan provided from the Land Bank Fund . HHA issued a development brief in July 2005, and commissioned a feasibility study and indicative masterplan for the site, which confirmed potential for 32 affordable and 88 private units, or 120 in all; revised outline planning consent was applied for and granted.”

Fife and East Kilbride

There are also cases innovative ways forward in Fife’s research into a possible “roof tax” and research for East Kilbride on the “Infrastructure Deficit” for the Northern Distributor Road.

Further Huckfield briefings will provide more details on these.

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LOCAL COUNCIL BORROWING AND LOANS

Prudential Borrowing is well established as a local council funding source for infrastructure. With increased Public Works Loan Board rates, more councils are now investigating the possible issuance of their own bonds.

Prudential Borrowing

Prudential Borrowing is the administrative framework applying to local councils that allows them to borrow in accordance with the Prudential Borrowing Code.  The objective of the Code is to help ensure for individual authorities that:

• Capital expenditure plans are affordable
• All external borrowing and other long term liabilities are within prudent and sustainable levels
• Treasury management decisions are taken in accordance with professional good practice

Prudential Borrowing has often been a loan from the Public Works Loan Board at rates of interest marginally above those at which the Government itself can borrow from the gilts market. Other forms of borrowing, including commercial bank loans and bond issues, are also permitted.

Prudential Borrowing is sometimes described to as an alternative means of procurement to PFI/PPP. But Prudential Borrowing represents a means of finance rather than a procurement route. But Prudential Borrowing can be used in conjunction with conventional, PPP or PFI procurement mechanisms.

In “An Exploratory Study of the Utilisation of the UK’s Prudential Borrowing Framework” by Stephen Bailey and others in Public Policy and Administration November 2010, on page 352:

“The Prudential Indicators are intended to clarify the consequences of proposed investment policies, enhancing transparency and accountability. Using the Indicators, each local authority sets a limit on the amount of borrowing it can undertake. Estimates for ‘capital expenditure un-financed’ (defined as that capital expenditure which is not financed by capital receipts, grants or revenue contributions) results in local authorities setting their own limits on the total amount of debt they can take on. This is intended to ensure that all external borrowing is within prudent and sustainable limits, that capital expenditure plans are affordable and that treasury management decisions correspond with certain accounting standards. This marks a significant shift from direct prescriptive statute-based control towards increased local self-regulation, financial autonomy and reliance on professional codes of practice for the monitoring of this autonomy”

Municipal Bonds

Municipal bonds may be issued by central and local government to finance capital projects like schools, roads or other public infrastructure or even to fund ongoing required expenditure.  Investors who buy municipal bonds are in effect lending money to the bond issuer in exchange for a promise of regular interest payments and the return of the original investment or principal. These bond investors are usually attracted by the steady stream of income payments. They may be more risk-averse and more focused on preserving rather than accumulating wealth.

Following London’s £600mn bond issue to fund Crossrail in July 2011, according to the Sunday Telegraph of Sunday 4 December 2011 some English local councils, including Wandsworth, Birmingham and Guildford now have secured external credit ratings as a preparation to become potential bond issues as their sources of finance are cut or become more expensive.

Though around 50% of UK capital expenditure is channelled through local government. But local councils face increasing difficulties with  spending cuts and increases in the cost of borrowing from the central Public Works Loan Board. Grants for local government capital spending will be reduced from £11.1bn in 2010-11 to £6bn in 2014-15 in real terms.

The New Local Government Network believes that increased Public Works Loan Board interest rates will force more city councils to the bond markets. In “Capital Futures:Local Capital Finance Options in an age of recovery”, the New Local Government Network said:

“Nearly two-thirds of the councils surveyed for new research say the PWLB rate rise will change the way they borrow, suggesting that bond issuances will come back onto the local agenda for the first time in 17 years.”

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SPECIAL PURPOSE VEHICLES

This Section describes special mechanisms which may be set up through Scottish Futures Trust to assist local council borrowing.

Non Profit Distributing Organisations

These are sometimes called “PFI lite”. The Scottish Government has abandoned PPP/PFI in favour of the Scottish Futures Trust(SFT). SFT has embarked on a range of procurement options, such as Non-Profit Distributing Organisations (NDPOs). The essential difference between NPDOs and mainstream PPP/PFI is that returns to private investors are capped.

The Eighth Report on December 16 2008 of the Scottish Parliament Finance Committee Inquiry into Methods of Funding Capital Investment Projects in paragraph 129 concludes:

“The Committee believes that a broad range of options for funding and procurement of capital projects should be in place. The Committee notes the Scottish Government’s decision to make NPDO models the default form of private finance, and the statement in the Value for Money Guidance that, where NPDO is not suitable, other private finance models will be assessed. The Committee recommends that public bodies should select the method of financing which delivers best value to the taxpayer. The Committee, therefore, agrees by division that all methods of finance should be considered equally on their merits. A minority of the Committee endorses the Scottish Government’s position that the NPDO model should be the default option.”

The Scottish Government’s Response from Cabinet Secretary John Swinney on February 16 2009:

“The Scottish Government very much agrees that value for money should determine the procurement model used. That is why it is not in favour of the use of the standard PFI model of procurement because it considers that the uncapped equity returns inherent in the financing structure do not represent best value for money for the taxpayer and give rise to excessive profits. Where it is shown that the use of private finance will secure better value for money, the Government believes that the NP~ model, which eliminates uncapped returns and directs surpluses for community benefit, offers a better deal for taxpayers”.

In “Non-Profit Distribution: The Scottish Approach to Private Finance in Public Services” in the Cambridge University Press “Social Policy and Society” 2009, Mark Hellowell and Alyson Pollock on page 406:

“The key difference between PFI and NPD is that, whereas in the former, the SPV capital includes a small element of private equity, in the latter its members invest only loans. In consequence, while SPV shareholders receive returns on their capital in NPD, the level of these returns is to a large extent ‘capped’ at the point at which contracts are signed, and any surpluses remaining at the end of the contract are passed to a designated charity. This is distinct from the PFI model, in which surpluses are passed to SPV members as dividends”.

The Scottish Futures Trust is forming a series of NPDO “Hubs” across Scotland involving private and public sector partners. On Monday 23 January 2012, Barry White, SFT Chief Executive announced:

“This is a momentous achievement for SFT and the hub team. In the past 18 months we have announced the appointment of the preferred partners for the South East, North, East Central and West hubs with the last preferred partner for South West hub to be announced in August 2012. When all hubs are operational they will deliver in excess of £1.4bn of infrastructure projects across Scotland by 2020″

National Housing Trust

This is an initiative by the Scottish Government in 2011 to enable developers and local authorities jointly to fund homes by forming Limited Liability Partnerships, with loans underwritten by the Scottish Government. Typically a local council may meet 65% of construction costs for the homes, in a partnership with private developer.

The Scottish Government described in October 2011 how the National Housing Trust works.

“New build homes are procured from developers, and when a bid from a developer is accepted onto the initiative the developer will complete the homes on their site to agreed standards and timescales. Limited Liability Partnerships (LLPs) are being set up to oversee progress on each developer’s site within a Council area – these are companies which won’t have any staff, but have a board of management involving the relevant developer and Council and a representative of the SFT. Once the homes are completed, the LLP will buy them by paying between 65% and 70% of an agreed purchase price to the developer upfront.

“This contribution is funded by participating Councils who will provide loans to the LLPs in their area – Councils are likely to fund this by borrowing from the Public Works Loan Board. The remaining 30% to 35% is contributed by the developer as a mixture of loan funding and equity investment”

“The homes are expected to be available to tenants for affordable intermediate rent for five to 10 years and the developer will oversee an agent(s) who will manage the homes and carry out maintenance and repairs to agreed customer service standards. The managing agents will allocate homes to tenants based on criteria agreed with the Council.

“Each LLP’s income from tenants’ rents will be used to pay interest to the Council so it can finance its own borrowing for the initiative and will also pay interest on the loan from the developer and pay for agents responsible for managing and maintaining the homes. The Scottish Government will provide a guarantee to participating Councils that it will step in if there is a problem and the LLP is unable to pay what it owes to the Council”

This is an example of Procurement Tendering on the Tenders Electronic Daily site.

The Second Phase of the NHT initiative shows details of 15 Councils procuring homes through the current phase of the NHT initiative and the approximate number of homes being sought in each area.

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EUROPEAN FUNDING

Under current 2007 to 2013 EU Structural Funds Programmes, the Scottish Government, Local Councils and others may continue to apply for European Regional Development Fund, provided they can find the required match funding contribution. EU funding will be covered in detail in a later Huckfield posting.

Councils and others can also apply under a wide range of Transnational Programmes including Eighth Framework. Applications may be made under most of these, irrespective of council designation.

JESSICA

The most recent development in Scotland is under the JESSICA (Joint European Support for Sustainable Investment in City Areas).

Scottish Ministers signed a Funding Agreement with the European Investment Bank (EIB) in June 2010 to establish a £50m JESSICA Holding Fund in Scotland. The fund was capitalised with £24m from ERDF Priority 3, matched by £26m from the Scottish Government.

The £50 million investment fund will support a range of regeneration projects offering loans and equity investment to revenue generating projects in 13 local authority areas in Scotland. These areas being an eligibility criteria of ERDF Priority 3.

The announcement at the Scottish Government JESSICA launch event said:

“The £50 million SPRUCE (Scottish Partnership for Regeneration in Urban Centres) Fund is open for business. The Fund is a new source of capital aimed at financing regeneration projects in Scotland, with funding that has been repaid from successful projects being used to fund further regeneration projects. Administered by Amber Fund Management Limited SPRUCE, Scotland’s JESSICA Fund (Joint European Support for Sustainable Investment in City Areas) will provide funding support to revenue-generating projects within 13 eligible areas. The intention is that the fund will be recycled up to three times within 10 years, providing significant resource to support successful regeneration in these key areas”.

This is explained in more detail on the site of AMBER, the fund’s managing agent:

“The SPRUCE Fund supports a wide range of urban regeneration activity within well defined, integrated, sustainable urban development plans.

“Eligible and investible projects include the development of office and commercial space, key transport projects and investment in energy efficient projects. This latter activity includes support for innovative approaches to energy efficiency retrofit measures.

“The SPRUCE Fund can lend to public, private or joint venture entities delivering regeneration or energy efficiency benefits within the designated local authority areas. The SPRUCE Fund lending rates are highly competitive”.

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LEVIES AND TAXATION

This Section describes Planning Agreements, Community Infrastructure Levy and Tax Increment Funding. The latter are emerging instruments which deserve special focus in view of their potential.

Planning Agreements

Previously, a main source of funding for infrastructure in Scotland and especially in England has been from Planning Gain and Planning Agreements.

In 2004/05 most Scottish planning agreements were under Section 75 of the Town and Country Planning (Scotland) Act 1997. By 2006/07 the majority were under Section 69 of the Local Government (Scotland) Act 1973. In England the main legal basis for planning obligations is set out at section 106 of the Town & Country Planning Act 1990.

The Scottish Government’s “Assessment of the Value of Planning Agreements in Scotland” by McMaster and others in 2008 on page 37, Table 4.11 showed that during the three years from 2004/05 to 2006/07, the total value of all planning obligation contributions throughout Scotland was £159mn.

The same Report on Planning Agreements shows that during the period 2004/05 to 2006/07 only 16% of all planning permissions in Scotland were linked with a Planning Agreement. Edinburgh, Scottish Borders, Aberdeenshire, Glasgow and Midlothian accounted for 61% of all contributions. Page 1 on Use of Agreements shows:

“The increase in the use of agreements for major housing developments, however, was especially significant. In 2003/04, 9% of all such permissions were linked with an agreement and the proportion rose to 16% in 2006/07.

For England, the equivalent Department of Communities and Local Government Report in 2006 showed that this three year Scottish total compared with an English total ten times as large in 2003/04 – for a single year.

In Valuing Planning Obligations in England Update Study for 2005-06, published by DCLG Final in August 2008,  Table 4.2 “Regional Estimate of the total value of planning obligations agreed in 2005-06 (excluding land contributions and county councils)” on page 50 shows that total Affordable Housing contributions were £1.9bn and other obligations £935.7mn, giving a total of £2.8bn

On page 52 this is further summarised:

“The total value of obligations that will be delivered from agreements signed in 2005-06 is estimated at around £2.8bn (an estimated loss or non-delivery of approximately £1bn or 30%)”.

Allowing for population differences – with England’s population ten times that of Scotland – this shows that the English total in developer contributions for one year was three times the level of contributions in Scotland.

The Town and Country Planning Association in “Planning Community Needs – a Guide to Effective Section 106 agreements and Statements of Community Involvement” in July 2008 gives a London Borough of Camden example where the total Section 106 Planning Gain was valued at £90mn from a scheme with a total value of £3bn. Inside the M25 orbit, London Boroughs and Central Government investment in London have seen levels of planning gain which are not achievable in Scotland, the North or Midlands.

After lobbying from developers about planning obligations’ being too onerous, Scottish Government Circular 1/2010 was designed to ease pressure on residential and commercial developers, through “Relationship to Proposed Development” and “Reasonableness” Tests.

Further developments now make it easier for some negotiations between planning authorities and developers to enable relief from some Planning Agreements in order to allow developments to proceed. While all of this eases pressure on some developers, it does not make it easier to fund infrastructure.

Further Huckfield briefings will include more up to date information on Planning Agreements in Scotland and England.

Community Infrastructure Levy

The main advantage for infrastructure funding is that procedures in a Community Infrastructure Levy in England determine the levy in advance, without subsequent uncertainties on payments and implementation. In many London Boroughs there will soon be two Community Infrastructure Levies – one levied by the Mayor to fund Crossrail and the other by Boroughs to fund their infrastructure needs.

One of the forerunners of the Community Infrastructure Levy was the Milton Keynes “Roof Tax”, as reported in the Guardian of Wednesday 27 July 2005:

“Society Guardian has learned that a Milton Keynes partnership committee, a new body with powers to fast-track planning, which includes EP and councillors, will tell key Whitehall departments that the infrastructure price tag for the proposed eastern and western extensions of the new town will reach between £1.2bn and £1.5bn by 2011.

As an interim measure to fund facilities, the Milton Keynes partnership committee has gained agreement from 20 large landowners, as well as builders, for the country’s first infrastructure tariff, labelled a “roof tax”. They will pay a levy of £18,000 for each house completed. This could raise around £270m”.

There is potential in exploring models of development charges based upon work already undertaken by Scottish Government.  This should build on recent research and examples of good practice including the Future Infrastructure Requirements for Services model adopted in Aberdeenshire.  Other models might be based upon the concept of allowing developers to ‘pay as you sell’ rather than ‘pay in advance’. This relies on infrastructure planning to identify where benefits can be accrued.

Under the Community Infrastructure Levy procedure in England Local Planning Authorities publish a list of infrastructure projects to be funded and the levy rate to contribute to identified funding gaps. An Independent Examiner from the Planning Inspectorate then judges whether the infrastructure list and proposed levy are reasonable.

Community Infrastructure Levy powers were introduced for England in April 2011. DCLG has consulted on amendments following the Localism Act 2011, to require local authorities to pass some receipts to neighbourhoods where development is taking place and to clarify how receipts fund ongoing costs of providing infrastructure. All this gives more local choice over how to implement the CIL charge.

As the DCLG March 2011 Presentation shows, Community Infrastructure Levy may be spent on infrastructure which legally includes (the list in the Act is not exhaustive):

• flood defence
• open space
• recreation and sport
• roads and transport facilities
• education and health facilities
• affordable housing

Authorities are advised to keep their infrastructure evidence simple and should demonstrate that there is an Infrastructure Funding Gap against existing funding streams. Authorities seeking to raise funds through CIL have to strike a careful balance between:

• Meeting all or part of the infrastructure funding gap
• The potential impact of CIL upon the economic viability of development across its area

The Newark and Sherwood CIL came into force in December 2011. Redbridge and Shropshire followed on New Year’s Day 2012. Portsmouth and London are at Examination Stage. Broadland, Croydon, Huntingdonshire, Norwich, Poole, South Norfolk and Wandsworth are undergoing Examination.

Since the first 12 CIL Charging Schedules show significant differences, it is difficult to predict average yields from CIL. But they will be significant.

Bristol predicts £14mn over five years. In its detailed Levy Rationale Background Paper – March 2011 Shropshire identified an overall Infrastructure Funding Gap of £385,459,000 for 2010 till 2026 for Road Transport Facilities, Flood Defences, Education, Medical Facilities, Open Space, Sports and Recreation, Police and Electricity Supply – based on estimates and existing developer contributions. This equated to £17,800 per projected dwelling.

In a succinct but methodical Examiner’s Report to Shropshire Council September 2011 the Examiner Sue Turner concluded:

“Since the Core Strategy was adopted, work on infrastructure planning has continued. The Shropshire LDF Implementation Plan 2011-2012 provides an up to date picture of the infrastructure projects to which CIL is expected to contribute.  It identifies a funding gap of £212,815,912 and an indicative CIL requirement of £180,148,912.   All of the figures above show that there is a significant infrastructure funding gap and demonstrates the need to levy CIL”.

Shropshire’s prediction of £180mn over 15 years shows that CIL can be a significant source of future income. In accordance with the DCLG Code of Practice, 10% of net CIL monies will be directed to strategic infrastructure schemes, and 90% of net CIL monies will be spent on local infrastructure.

As CIL Charging Schemes proceed, their Examiners may need to revise some CIL estimates on account of the following:

• Ageing population and changing implications for a range of social infrastructure facilities
• Changing household patterns. Many current planning ratios are based on historical household demands. More single person households are changing the pattern of education demands. Primary and Second School contributions may gradually need changing
• Digital Media and changing models of learning, particularly in the FE/HE sector
• Externally commissioned service delivery and new models of delivering social infrastructure in partnership with retail and leisure establishments

It will take time before most local authorities have a CIL scheme in place. Only 35% have Adopted Local Plans. So there may be a need to look at other methods in the mean time.

Tax Increment Funding

In “Paying the Piper – Funding and Financing Infrastructure Issues in Scotland” by  Newhaven Research for the Chartered Institute of Housing on March 07 2011 on page 27:

“Tax increment finance (TIF) allows local authorities to fund the improvement of an area through the property tax revenue subsequently generated by that improvement ….

“Used in this way, TIF is intended to create the necessary conditions for attracting subsequent commercial and residential investment, but it has also been used directly by local housing authorities to secure additional market and affordable housing”

“In brief, the approach involves clearly designating a specific area, calculating the existing tax revenue generated in that area at some base date, specifying and costing a programme of improvement work, estimating the increase in tax revenue that will arise as a consequence of doing this work and then hypothecating that increase in tax revenue for a specific period to pay for the work to be done.”

In May 2011, the Scottish Government on set out its basic position on Tax Increment Funding:

“Any proposal for a TIF project must demonstrate to Scottish Ministers that:

• the enabling infrastructure will unlock regeneration and sustainable economic growth
• it will generate additional (or incremental) public sector revenues (net of a displacement effect)
• it is capable of repaying, over an agreed timescale, the financing requirements of the enabling infrastructure from the incremental revenues”.

The Scottish Government set out the latest position in an announcement “Plans for funding building projects” on Tuesday 01 November 2011:

“Three local authorities have been given approval by the Scottish Government to develop proposals under the Tax Incremental Financing (TIF) model.

The successful councils plan to fund infrastructure projects by borrowing against the future business rate income that should be generated by the resulting development.

The following local authorities will now work with the Scottish Futures Trust (SFT) to develop full TIF business cases:

• Falkirk Council – £52 million direct investment to key strategic road improvement, the Grangemouth flood defences and site enabling works. It is forecast to attract £365m of private sector funding and creating over 5,000 full-time equivalent (FTE) additional jobs at national level
• Fife Council – £17 million for improved vehicle and marine access to Energy Park Fife, site remediation and enhanced delivery of a Levenmouth Low Carbon Investment Park. It is estimated that 1,000 new jobs will be created
• Argyll and Bute – £20 million proposal to extend Oban’s North Pier and to construct a development road at Dunbeg/Dunstaffnage. 1,000 FTE jobs expected

Ministers have so far approved two TIF business cases:

• City of Edinburgh Council – £84 million Leith Waterfront project has the potential to unlock £660 million of private investment generating 4,900 FTE jobs
• North Lanarkshire Council – £73 million Ravenscraig Phase two scheme is expected to unlock £425 million of private investment and over 4,500 FTE jobs

In addition to those already agreed, work on developing further TIF business cases remains underway.

• Glasgow City Council is in the process of developing a business case for a £80 million TIF project, Buchanan Quarter, which is expected to be submitted shortly
• Aberdeen City Council’s plan to use TIF for Union Terrace Gardens project will be progressed if public support for the project can be demonstrated

Cabinet Secretary for Infrastructure and Capital Investment Alex Neil said on Tuesday 01 November 2011:

“Depending on progress with TIF pilots, we will bring forward primary legislation before the end of this Parliamentary session to roll out TIF more widely across Scotland. There may also be further opportunities to progress those bids not announced as successful, to ensure good geographical spread, before then.”

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LOCAL COUNCILS AND COMMUNITY BENEFIT FROM RENEWABLE ENERGY

With more onshore windfarms gaining planning consents and becoming operational, several local authorities are beginning to develop and formalise their policies and guidelines for Community Benefit, including funding for larger infrastructure programmes.

Dumfries and Galloway

Dumfries and Galloway conducted a Windfarm Community Benefit Framework Review in April 2011. “Windfarm Community Benefits. Revised Approach 2011 Information for Communities”  Section 7 refers to a Minimum Developer Contribution:

“The standard minimum rate of contribution is £5,000 per megawatt per annum based on the  installed/consented capacity of the windfarm. For example for a windfarm development with installed capacity of 25 megawatts, the community benefit fund would be £125,000 per annum. This rate will be index linked from 1st January 2011 based on the Retail Price Index”.

“Windfarm Community Benefits Revised Approach 2011 Information for Developers” in Section 6 refers the establishment of a Regional Socio Economic Fund:

50% of the funding will be ring-fenced for a Regional Socio-Economic fund. The purpose of this fund is to invest in social, economic and environmental projects that support a sustainable low carbon economy. Projects will seek to deliver in one or more of the following areas:

• Business and skills
• Environment and community
• Cultural and tourism
• Affordable housing
• Community transport
• Improved broadband connectivity

The region-wide fund will take applications from constituted community groups, communities, organisations including the public sector from across Dumfries and Galloway.

South Lanarkshire

With Whitelee and the other windfarms, practice in South Lanarkshire is now established with its Renewable Energy Fund

The Fund’s basic options are:

• Main renewable energy fund – grants over £10,000 up to 50% of total ‘eligible’ costs
• Local grant scheme – grants of less than £5,000 and up to 100% of total ‘eligible’ costs for smaller community-based projects

Applications for financial assistance are eligible for projects within a 10km radius of participating renewable energy developments. These are accepted from:

• public organisations and agencies
• partnerships, trusts, co-operatives and other non-government organisations
• community groups, associations or organisations
• any business, co-operative or other trading enterprise located, or offering a service benefiting communities, within a 10km radius of participating developments

Applications will be considered from outside the 10km radius if it can be demonstrated that the people who will benefit those who live inside the eligible area. Any grants awarded would be proportional to the percentage of residents who would benefit from the project.

Scottish Borders

Scottish Borders’ Council has issued a comprehensive toolkit “Achieving Community Benefit from Commercial Windfarms” on page 10 says:

“There are no hard and fast rules about the level of community benefit which can be achieved, but some real examples include: – Highland Council aims to achieve £4,000 to £5,000 per installed MW per year”

Highland Council

Highland Council launched its renewable energy Community Benefit Policy in Inverness on Friday 24 February 2011. The policy is in line with examples above:

“The  Council’s policy applies to all onshore renewable energy developments.  It seeks a minimum payment to community benefit funds equivalent to £5,000 per Megawatt of installed capacity per year. The Council will seek to negotiate concordats with developers, which will ensure that developers operate within the Council’s policy and that developers negotiate directly with the Council on behalf of communities to secure the greatest level of benefit possible.

“The Council’s policy is a 3-tier system of benefit with all of the first £100,000 per year of benefit going to local communities and managed within a Local Fund.  Of the community benefit that remains:

• 55% will also go to local communities through their Local Fund
• 30% will go to one of ten local Area Funds covering Caithness; Sutherland; Dingwall and Black Isle; Easter Ross; West and Mid Ross; Lochaber; Inverness; Skye; Nairn and Ardersier; Badenoch and Strathspey
• the remaining 15 % will go to the Highland Trust Fund”

The Council’s Community Benefit policy makes it clear that infrastructure may be funded:

“It is intended that all three funds would receive bids from communities, groups and other appropriate organisations for the following project types:

• Financial and other support for business and community projects including provision of infrastructure
• Alternative and renewable energy research
• Energy generation and efficiency schemes (including community ownership or stakes in renewable energy developments
• Community ownership or control of assets
• Projects which address issues of fuel poverty
• Other community interest projects based within the community
• Skills development and apprenticeships”

Highland Council’s policy is one of the first in Scotland to explore in more detail a proposed allocation of Community Benefit from offshore wind developments.

OTHER ORGANISATIONS AND COMMUNITY BENEFIT FROM RENEWABLE ENERGY

As more windfarms receive planning consent, are being constructed and become operational, in addition to local authorities, other organisations are now formalising their approaches to community benefit associated with these developments. The following provides some Scottish national examples:

Scottish and Southern Energy (Scottish Hydro)

In November 2011 SSE announced details of a new Scotland Sustainable Energy Fund that could be worth more than £90 million over 25 years:

“The fund will be available for organisations promoting skills development, community energy schemes and improving the built and natural environment. The fund is in addition to the £150 million SSE has already committed to support community projects in Scotland over the 25-year projected lifetime of the company’s existing and planned wind farms”.

SSE’s commitment is based on a tariff of:

“£5,000 per megawatt for all new onshore wind farms constructed in Scotland from 1 January 2012. This will comprise £2,500 for local community initiatives and £2,500 per megawatt for the new Scotland Sustainable Energy fund”.

While all this is at an early stage, it means that in future there may be substantial community benefit funding available for larger projects. As progress is made, there will be further Huckfield briefings.

Forestry Commission

Forestry Commission Scotland is working with developers for wind and hydro projects on national forest land. FCS has published a helpful guide to its thinking in “Opportunities for Community Involvement In Hydro or Wind Renewable Energy Development on the National Forest Estate“.

Forestry Commission Scotland deserve credit for setting the “benchmark tariff” of £5000 per installed megawatt since this is becoming the standard tariff for wind farm community benefit across Scotland.

The Opportunities for Community Benefit document shows selected developers for Hydro and Wind Generation Lots across Scotland. The developers will engage with local communities about processing Community Benefit. All this is still at an early stage of development.

But further Huckfield briefing will be posted on this site as soon as it becomes available, especially if some developers follow precedents above of splitting benefits available into local community and more strategic projects.

CONCLUSION

All of this represents a rapidly unfolding scene in which the Scottish Government and some local authorities are emerging as UK pace-setters. Future Huckfield briefings will publish further details as these unfold.

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Previous Huckfield briefings on Employer Ownership Pilots have appeared here since Wednesday 07 December 2011.

The Bidding Timetable and details of Briefing Sessions are shown below.

Though Employer Ownership Pilots apply only in England, the Scottish Government will follow developments after recent references in policy documents to a lack of employer involvement.

The Scottish Government’s Further Education Consultation in September 2011 Putting Learners and the Centre: Delivering our Ambitions for Post 16 Education, on page 32 said:

“We will improve this situation, where necessary looking at radically alternative models which put employers in the driving seat”.

Background for Prospectus

As reported in previous Huckfield briefings, on Thursday 17 November 2011, the Prime Minister and Business Secretary Vince Cable announced the Employer Ownership Pilots initiative for England. Under the proposed £250mn programme, employers will be given the power to design, develop and purchase the vocational training they need. Vince Cable said then:

“We have to fundamentally alter the relationship between employers and the state – giving employers the space and opportunity for greater ownership of the vocational skills agenda, including the chance to bid for direct control of public funds”

“Employer Ownership of Skills, a policy paper published by UKCES on Tuesday 13 December 2011 provided more details. Section 6 of the policy document says:

“Public investment will be provided directly to businesses, sitting alongside businesses’ own private investment, rather than following the mainstream public funding model.

“It will be open to proposals from businesses of  all sizes and from all sectors of the economy.  As part of the pilot, employers will be asked  to demonstrate how public investment would  be used to leverage business investment and  commitment to raising skills levels in their sector,  supply chain or local area and how they will support Apprenticeships”.

The Coalition Government Agenda

Employer Ownership Pilots represent the start of a gradual shift of public funding for employer led training and a new environment where through the Department of Business, Innovation and Skills, UKCES and the Skills Funding Agency, public funding acts as market maker. Rather than the Government’s keeping control or directly funding the training agenda for employers, increasingly, it wants employers to take the lead. Innovative suggestions include a public funding role in employer training as underwriting, as guarantor or for reducing risk.

The UK Government’s wider rationale is that 60% of employers already use private training providers. So employers been have subsidised to join Government incentives. But with unsustainable levels of public spending, the Government will now encourage employers to take ownership of their training agenda. This means moving from direct provider funding, based on qualifications, to employer-based structured investments and loans to leverage additional outcomes and work experience and moving from provider led to employer owned workforce development.

In other words, public funding will go directly to employers who will exercise their choice of provider.

Contents of The Prospectus

The Employer Ownership of Skills Prospectus February 2012  on page 6 “The Invitation” says that the full investment criteria, application forms and guidance will be available towards the end of February 2012.

Details of the Bidding Timetable and details of Briefing Sessions are shown below.

The Prospectus on page 6 continues:

“The Prospectus invites employers to develop proposals for improving skills, covering a wide range  of activities including:

• Apprenticeships and wider employee training opportunities
• Training and skills development to help people into work
• Innovative approaches to the design and delivery of training and workforce development”

The Prospectus on page 6 continues:

“Proposals should set out:

• The outcomes to be achieved
• The rationale behind the proposition and why it cannot be done as successfully through existing funding routes/delivery channels
• The mechanisms by which it will be delivered
• The level of private investment
• The public investment needed to make it happen”

Apprenticeships

The Prospectus continues on page 7:

“For example, successful apprentices will be expected to have:

• Acquired one or more significant qualification(s) recognised to be important to the sector
• Become competent in their current role
• Been supported towards achieving English and Maths to the level of a GCSE A* – C where they do not already possess this
• Good progression opportunities once they have completed, either in work or into further/higher education”

This is very much the Coalition Government’s agenda for vocational training and apprenticeships, beginning with Alison Wolf’s “Report on Vocational Education” in March 2011 and the Department of Business, Innovation and Skills’ FE Reform Series “New Challenges. New Chances”, the latest of which appeared on Thursday 01 December 2011.

Employers in Control

The Prospectus shows on page 8 that employers will be expected to be in control:

“Employer leadership and commitment: We want to explore through the pilot how we can improve the way that employers and individuals get the skills they need. We want to test new employer designed and delivered training and employment programmes. For example, proposals could include:

• A clear articulation of the skills needs within an industry and why public funds are required to complement private investment
• An employer definition for what quality is for a sector in skills and learning programmes
• A package of employer designed training and assessment that meets both industry and employee needs
• More sustainable models of funding training that encourage greater private investment alongside public investment
• New methods of training delivery that closely align employer and employees’ needs
• An employer-designed payment and monitoring system that safeguards public funds, demonstrates value for money and is simple for the business to operate”

These criteria show clearly that increased contributions will be sought from employers towards “more sustainable models of funding training that encourage greater private investment”. The need for “an employer-designed payment and monitoring system” favours larger companies. Many larger employers already have transaction and payment systems on to which Employer Ownership might be bolted. Though employers of all sizes from all sectors can bid, this part of The Prospectus favours large employers.

Collaboration

 The Prospectus shows on page 9:

“Collaboration can be demonstrated in two principal ways: employers working with:

• their employees, trade unions and providers to ensure that any skills offer responds to employer and employee need
• employers coming together to work in partnership”

The Prospectus continues on page 9:

“The types of collaboration between employers could, for example, include:

• Large primes and small businesses in a supply chain developing a mutually beneficial programme of learning
• Leading employers investing in a sector by providing up-front funding to support learning
• opportunities in smaller businesses
• Employers working together, with the support of their employee representative bodies, to secure greater apprenticeship and sustainable job opportunities
• National Skills Academies working for a set of employers to secure appropriate training opportunities
• Groups of employers, who individually may find it difficult to meet their skills or training requirements, coming together through bodies such as Group Training Associations and developing a collective proposal that meets all of their needs and offers more opportunities
• Employers within a locality developing a strategic skills offer through the most appropriate geographical infrastructure (for example partners in a city region) and with support of colleges and providers”

Difficulties for Collaboration on the Ground

The Government’s main problem with encouraging greater employer ownership of training is the lack of appropriate employer development and implementation mechanisms configured for employer-led bids. Sector Skills Councils are themselves in a competitive bidding agenda and some may not survive. The CBI, Institute of Directors, Engineering Employers’ Federation and others are not appropriately configured to articulate local employers’ skills and training needs. Group Training Associations are reduced in number and some have become training providers.

In short, there are not enough obvious local employer structures to articulate skills needs or submit bidding applications for Employer Ownership Pilots.

Employer bidding routes have been suggested, including bids from larger employers on behalf of supply chains, by clusters of companies and by businesses working together to de-risk training. Some of these were available when funded by Regional Development Agencies. Where they still exist, they will be dominated by larger employers. So there is a risk that some bids might seek simply add deadweight or reduce existing funding costs.

Larger employers with strong relationship with large providers, including colleges, have an advantage, especially where they have current programmes which are substantially employer funded. Larger employers are also more likely to have resources for bid submission.

Transparency

The UKCES “Employer Ownership of Skills” policy document of Tuesday 13 December 2011 included references to the need for market transparency. Page 5 ‘Transactions should be transparent’ included:

“Public contributions should be transparent, simple and less bureaucratic. Public contributions should be designed to facilitate employer/employee choice, empowering them as customers to drive quality, innovation and value for money”

This sounds like code language for driving down provider costs.

Initial Bidding Criteria

The Prospectus shows under “Investment Criteria” on page 13:

• “Economic benefit and value for money – proposals should demonstrate their potential for increasing the impact of work readiness, workforce development and Apprenticeship activity and for this to have a tangible impact on employer performance and growth. Only economic benefits which are deemed to be additional to what would happen without Government support will be counted
• Innovative approaches to skills and workforce development – proposals should demonstrate how they address strategic skills needs and demonstrate how this solution is new or an improvement on existing options
• Feasibility – proposals should demonstrate strong employer leadership and set out levels of employer investment alongside public investment. ……… The proposal should show that a strong team with a positive delivery track record will lead the project and that strong and appropriate partnerships have been forged to deliver the solution
• Quality – proposals should demonstrate how a high quality experience for the employer and learner will be delivered and how the breadth and depth of learning will be provided”.

In bidding jargon, this means that proposals must demonstrate additionality, innovation, a track record and quality assurance.

Size of Bids

None of this should be a surprise. Frequently Asked Questions on the UKCES site says:

“10. Are there minimum and maximum amounts we can bid for?

“We want to see significant and scalable proposals for skills investment and therefore the minimum cash investment from Government will be £250,000 for collaborative proposals involving SMEs, and £1 million for individual or consortia bids involving large employers (defined as employing 250 employees or above). We will continue to assess the appropriateness of the eligibility criteria throughout the Pilot”

13. Over what timescale is the money available?

“Up to £50m is available for the 2012/13 academic year, starting in August 2012. Subject to success of the first round of the pilot, up to £200m will be available for the second round”.

This shows that though the first round of Employer Ownership Pilots will be for a total £50mn, a much bigger second round will be available when there is more bidding experience.

Bidding Timetable

The Prospectus for Employer Ownership of Skills on page 11 shows the bidding timetable:

• Webinar taking place throughout March and April 2012
• Full application form and guidance published towards the end of February 2012
• Deadline for employer registration – 13 April 2012
• Deadline for submission of full applications 26 – April 2012
• Decisions and applicant feedback – June/July 2012
• Delivery to commence August 2012 onwards

Briefing Sessions

The Prospectus for Employer Ownership of Skills on page 11 shows the timetable for Briefing Sessions. Potential Bidders can register online to attend Employer Ownership Briefing Sessions, which are from 0800 till 1000 as follows:

• Manchester – Tuesday 06 March 2012
• London – Wednesday 07 March 2012
• Birmingham – Wednesday 14 March 2012
• Leeds – Thursday 15 March 2012
• Sheffield – Wednesday 21 March 2012
• Bristol – Tuesday 27 March 2012
• Newcastle – Wednesday 28 March 2012
• Nottingham – Tuesday 03 April 2012
• Liverpool – Wednesday 04 April 2012

And, finally. Further Developments

Further developments as they occur will be posted in future Huckfield briefings.

The following detailed sections seek to provide information for Scotland’s Further Education Colleges and others along similar lines to that previously provided in Huckfield briefings for Further Education and Higher Education in England.

Many of Scotland’s Colleges will be familiar with funding initiatives listed. No claim is made that this briefing is infallible or that it contains all that Colleges need to know about funding!

Since the Scottish Government’s Budget, proposed College regionalisation and reduced funding are not yet concluded, this briefing seeks to be policy-neutral. Further Huckfield briefings will report on latest developments.

Though information provided here is taken directly from source and attribution is made where appropriate, please feel free to add comments and suggest amendments below.

Because this is a long briefing, please click on the following headers to go straight to these sections:

OVERALL SUMMARY

This section provides an overall summary of the funding reductions now presented to Colleges and also includes the Cabinet Secretary’s response in the Scottish Parliament debate on Further Education on Thursday 02 February 2012.

SCOTLAND’S COLLEGES ARE IMPORTANT

This section presents a summary of achievements by Scotland’s Further Education Colleges.

COLLEGES AND PUBLIC SPENDING REDUCTIONS

This section summarises proposed overall funding reductions for Scotland’s Further Education Colleges.

SCOTTISH GOVERNMENT CONSULTATION ON POLICY

This section highlights important points in the Scottish Government’s Pre Legislative Consultation. In September 2011, the Scottish Government published its Pre Legislative Consultation Paper “Putting Learners at the Centre:  Delivering our Ambitions for Post-16 Education“.  In November 2011, Scotland’s Colleges published a “”Response to the Pre Legislative Consultation Paper: Putting Learners at the Centre”

SCOTTISH FUNDING COUNCIL CONSULTATION ON IMPLEMENTATION

This section highlights important points from the Scottish Funding Council’s proposals for implementation of “College Rationalisation: Proposals for Implementing Learners at the Centre“, together with the response and comments from Scotland’s Colleges in “Response to Proposals for Implementing Putting Learners at the Centre”

FUNDING FOR COLLEGE STUDENTS

This section provides a brief summary of Education Maintenance Allowances and Colleges’ bursaries for students.

SKILLS DEVELOPMENT SCOTLAND INITIATIVES

This section provides a summary of various Skills Development Scotland initiatives, including Individual Learning Accounts, Get Ready for Work, Training for Work, Modern Apprenticeships, with all of which Colleges will already be familiar.

A note is provided on Apprenticeship Training Agencies, based on the Australian model, which are expanding in England. Further SDS Initiatives including Flexible Training Opportunities, Employer Recruitment Initiative, Adopt an Apprentice and the Low Carbon Skills Fund, are summarised. There is also a note on additional support.

LOCAL FUNDS

This section highlights some available local funds for skills development and apprenticeships. The Commonwealth Jobs Fund (Glasgow), Commonwealth Apprentice Initiative (Glasgow) and West Dunbartonshire New Employment Wage Subsidy are summarised. This is not an exhaustive list and information on other local initiatives will be posted in future Huckfield briefings.

COLLEGE INITIATIVES

This section includes examples from Adam Smith, Carnegie, Dundee, Edinburgh Telford and Inverness Colleges in a brief and not exhaustive summary of Colleges’ involvement in renewable energy development. Further College developments for onshore and offshore renewables and other funding which may be available will be reported in a future Huckfield briefing.

LOCAL COUNCILS AND COMMUNITY BENEFIT FROM RENEWABLE ENERGY

This section shows how several local authorities are now developing and formalising their policies and guidelines for Community Benefit. Though most Community Benefit policies provide specific allocations for local communities, some Councils are now developing Community Benefit policies to fund larger regional infrastructure, including skills development, on which this section focuses.

OTHER ORGANISATIONS AND COMMUNITY BENEFIT FROM RENEWABLE ENERGY

This section shows how organisations which operate nationally in Scotland are also developing Community Benefit policies. Scottish and Southern Energy (Scottish Hydro), Scottish Power and the Forestry Commission are examples of those with significant Community Benefit policies for renewable energy developments. Apart from applications from local communities, these policies will also focus on larger projects, including local skills development.

HIGHER EDUCATION ACADEMY

This section describes how Scotland’s Further Education Colleges may participate in and benefit from Higher Education Academy programmes below, if they are subscribers. The Higher Education Academy has recently started offering subscriptions to FE collages with HE provision. This was mentioned in the HEA’s recent HE in FE briefing

HEA supports various networks and provides resources, events and workshops relating to learning and teaching in Higher Education. HEA has an office in Edinburgh. HEA works with individual academic staff, subject discipline groups and senior managers to identify and share effective teaching practices in order to provide the best possible learning experience for all students.

HEA contact details are provided in this Section.

EUROPEAN STRUCTURAL FUNDS

This section briefly covers proposals emerging from the European Commission about its 2014-20 Structural Funds, which are at an early stage of development. Scotland’s previous Objective One and Cohesion Fund Highlands and Islands Area may become a Transitional Area, thus retaining higher rates of intervention. Further developments will be highlighted in a future Huckfield briefing

KNOWLEDGE TRANSFER

This section covers a recent report published by Scotland’s Colleges. Frontline Consultants’ “Review of the Developing Employer Engagement Programme and Knowledge Transfer Grant” shows that Scotland’s Colleges have been highly successful with limited funding available for DEEP and Knowledge Transfer Grants.

EMPLOYER OWNERSHIP POLICY DEVELOPMENT

In July 2011 the United Kingdom Commission for Employment and Skills published its “Review of Employment and Skills” in Scotland. Other reports, including the Scottish Government’s and Scottish Funding Council’s “Putting Learners at the Centre” consultations, emphasise a need for more employer involvement in the design and delivery of skills training. Various structures, including Skills Investment Plans, are currently being explored in Scotland to secure more employer participation and involvement. In England, Employer Ownership Pilots launched this week will project a new environment in which public funding acts as market maker rather than direct funder. Employers will be directly funded by purchase training from providers of their choice.

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MAIN BRIEFING STARTS HERE:

OVERALL SUMMARY

Details of next year’s College spending were published in the Scottish Funding Council’s Circular “Indicative college sector financial decisions for academic year 2012-13″ of Thursday 02 February 2012, including the following:

• Colleges will see teaching budgets cuts by up to 8.5% under funding arrangements for next academic year.
• The overall budget will be £499.6mn, reduced from £544.7mn.
• No college will see its individual teaching budget cut by more than 8.5%, with student numbers being maintained.
• Student support will be maintained at the 2011-12 baseline level, with £84.2mn allocated using the same formula.
• A £15m Transition Fund has been set up to support mergers and federations.

Winding up the Scottish Parliament debate on Further Education on Thursday 02 February 2012, the Cabinet Secretary for Education said that:

• from 2007 to the end of the current Spending Review, the Scottish Government will have invested £4.7bn in colleges – 40% more in cash terms than previously
• NPD investment in colleges represents additional capital investment of £300mn
• student numbers and college student support are being maintained
• college student support has been increased by 25% since 2006-07, from £67.3mn to £84.2mn
• unlike England, the Education Maintenance Allowance is protected
• every 16 to 19-year-old will have a place in learning, with College places prioritised for 20 to 24-year-olds.
• recent figures show that 88.9% of school leavers go to positive destinations

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SCOTLAND’S COLLEGES ARE IMPORTANT

Scotland’s Colleges are important. The Scottish Government’s “High Level Summary of Statistics Trend Last Update”, November 2011 showed that:

• There were 347,336 students undertaking courses in the 43 SFC-funded colleges in Scotland in 2009-10, accounting for a total of 438,522 enrolments. Individuals may enrol on more than one course
• In 2009-10, the number of FE students decreased by 33,915 from 301,692 students in 2008-09 to 267,777. However, the number of full-time students increased by 9% between 2008-09 and 2009-10, which resulted in a 1.5% increase in FE activity at Colleges. At FE level, in 2009-10, there were 47,630 full-time and 267,777 part-time students
• The main reason for the high number of part time students at FE level is that many students are also in full time jobs or have other domestic responsibilities. The majority of these types of students are frequently enrolled on programmes with a vocational orientation
• 95% of all the activity programmes in Scotland’s Colleges led to a recognised qualification. The latest figures for 2009-10 indicate that 23,221 HE qualifications and 95,178 FE qualifications were achieved by students studying at Colleges. Furthermore, 38% of enrolments by working age students in Scotland’s Colleges, had a direct involvement in industry and commerce in 2009-10.
• In 2008-09, the most recent year for which SFC data is available, 41,243 FE students received support from bursary funds. This amounted to £67.4mn  of support, which in real terms meant an increase of 8.6% compared to academic year 2007-08 (£60.4mn).

This suggests that that around 8% of Scotland’s population is engaged with FE Colleges – a significant achievement.

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COLLEGES AND PUBLIC SPENDING REDUCTIONS

Commenting on Thursday 12 January 2012 following the announcement from the Scottish Government that funding losses to colleges would be capped at 8.5%, spokesperson John Spencer, Convener of Scotland’s Colleges’ Principals’ Convention said:

“The Scottish Government’s announced move to cap the level of cuts in the first year of the reform process at 8.5% is a helpful development.

“It is, however, important to restate that this will still be an 8.5% cut coming after a 10.4% cut in the current year. Colleges want to protect places, and committed to retain activity at the same level with the 10.4% cut this year, but we remain to be convinced as to how this may be achieved again”.

Published in September 2011, the Scottish Government’s Spending Review and Draft Budget 2012/12 at Table 9.06 on page 112 shows that the Scottish Funding Council’s Further Education Programme will be:

• 2011/12 – £544.7mn
• 2012/13 – £506.9mn
• 2013/14 – £494.7mn
• 2014/15 – £470.7mn

Though these figures may vary slightly, this represents a significant reduction in Scotland’s Colleges’ revenue budgets. The following page says “In 2012-13 we will embark on an ambitious programme of reform of post 16 education.”

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SCOTTISH GOVERNMENT CONSULTATION ON POLICY

College Regionalisation

The Scottish Government intends far reaching changes in the organisation and funding of Colleges.

One of the key recommendations of the Scottish Government’s pre legislative policy document “Putting Learners at the Centre:  Delivering our Ambitions for Post-16 Education” is at Section 133 on page 45:

“The financial pressures we face mean we can no longer afford a system of individual institutions (with all the managerial and academic overheads that entails) serving overlapping areas. Nor is it sensible to allow incoherent and unplanned provision to emerge, as sometimes happens through unilateral decision-making. Moreover …we need to strengthen the alignment between post-16 learning and jobs and growth.  We therefore need colleges,  in particular,  to come together collaboratively to achieve these benefits through federations, mergers or other innovative means”.

The pre legislative policy paper continues in Section 134 on page 45:

“A shift to regionalisation would still support local delivery and responsiveness to local need within the frameworks established at national and regional levels.  In developing such an approach, we will give specific consideration to mechanisms for protecting access-level provision locally”.

College Funding

“Putting Learners at the Centre:  Delivering our Ambitions for Post-16 Education” in Section 41 on page 18 says:

“We expect our training programmes to be of a high standard and to help individuals to progress towards sustainable employment or further learning. So it is important we continually review the performance of training providers, placing our trust in those with the strongest record of success. In that regard we need to encourage colleges to do more to provide flexible training and undertake long term provision alongside private providers. It is also important that, where appropriate, a significant proportion of funding is linked to outcomes that demonstrably help participants move towards sustainable employment. We will review current funding models and consider how we can use funding to improve performance”.

On page 54, Section 171 says on reforming funding:

“Given our wish to shift towards regionalisation of college provision, SFC funding for colleges should in future be based on the needs of a region, taking into account  the demographics and economy of the region in question.   The  SFC should also separately consider if there is specialist provision that should be funded nationally.  Regional funding of college provision should be bolstered by new requirements to make sure the needs of individual localities and communities within the region are properly taken into account.  There should be a simple, visible and public connection between the funding allocated and the outcomes that should be delivered in return”.

Scotland’s Colleges’ “Response to the Pre Legislative Consultation Paper: Putting Learners at the Centre” on November 29 2011  on pages 5 and 6 asks for regionalisation and funding changes to be introduced more slowly:

“Allocation of Funds to Regions: as a potential solution in ensuring provision for adult learners, we would propose amending the suggested criteria for regional funding allocations. The indicators proposed in the paper do not account for those aged over 24. We believe the criteria for funding should also include key indicators for older learners to ensure their needs are considered in funding and planning provision. However, it is important that a full equalities impact assessment is carried out before implementing any new formula”.

“Simplification of Funding Methodology: colleges support a simpler funding measure based on full-time equivalents (FTEs). However, changes in how student numbers are counted should not lead to a reduction in funding for delivering education to those students.”

“Outcome Agreements: Scotland’s colleges support the development of outcome agreements and, in broad terms, agree with the proposals for their negotiation and assessing performance. However, we believe that the target to have agreements in place for the next academic year by April 2012 is extremely challenging. The sector would also be agreeing to outcomes that were not known or planned for when decisions on provision were being made. With so many unresolved change proposals, any agreement should focus solely on plans for developing regional structures”.

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SCOTTISH FUNDING COUNCIL CONSULTATION ON IMPLEMENTATION

College Regionalisation

Section 2 on page 1 of the Scottish Funding Council’s Consultation Paper “College Rationalisation: Proposals for Implementing Learners at the Centre” in November 2011:

“Until now, funding from the SFC has been provided to individual colleges on a largely historical basis. In future, we think investment in the sector should be focused on the needs of a region – with those needs defined by the region’s socio-economic characteristics. We will expect colleges in a region to work together rather than independently to meet that need. We will make clear our expectations in an outcome agreement to be negotiated with the colleges in a region, with this agreement acting as the key mechanism for accountability. This approach represents a fundamental shift: from historically-based to needs based funding; from individual colleges to regional groupings; and from activity to outcomes”.

The Consultation defines regions in Section 10.The Consultation closed on Friday 23 December 2011.

Calculations for Regionalisation

Most interesting is the “College Regionalisation: Proposals for Implementing Putting Learners at the Centre” November 2011 which in its Sections 17, 18, 19 and 20 on ‘Estimating Regional Need’ explains how funding allocations will be based on regional socio economic data and population characteristics:

• the number of the S3-S6 age group in school education. This reflects the Scottish Government’s commitment to the senior phase of the Curriculum for Excellence, including school-college activity
• the numbers of 16-19 year olds not in school or university education and not participating in a national training programme;
• the numbers of 20-24 year olds who are unemployed
• the numbers of people of all ages with low qualifications in a region
• travel to study/travel to work data – though this is relevant more for some regions than for others”

Scotland’s Colleges’ “Response to Proposals for Implementing Putting Learners at the Centre” says on page 8:

“If Putting Learners at the Centre is implemented as outlined in the consultation paper, there will be risks as funding is redirected and refocused away from skills and the economy to concentrate on 16-19 year olds not in education, training or employment. As Colleges, we have worked hard to provide the skills and training needed for the growth of the economy to all comers, of all ages, providing the skills and education our learners need to get a job, keep a job, or get a better job”.

Scotland’s Colleges’ Response continues on page 10:

“The indicators proposed in the consultation paper will impact on those aged over 25 including those attending on a part-time basis and those in employment. We would recommend that a full equalities impact assessment is carried out before reaching any conclusion”.

Section 19 of the SFC Consultation Paper “College Regionalisation : Proposals for Implementing Putting Learners at the Centre” says:

“We propose to include travel to study/travel to work data to take account of the fact that significant numbers of learners will wish to study outwith their region because of transport links, to reach specialist courses, work or lifestyle or learning choices. We expect local learning opportunities at access or lower SCQF levels to be available nearer to home, but that people may have to travel for higher level courses or more specialist provision”

Section 19 continues:

“Outcome agreements for such regions would require them to demonstrate they are not duplicating provision better provided in neighbouring regions, that they are co-operating with those regions to ensure coherent provision for students and that, where appropriate, they continue to provide nationally important specialist provision.”

“Though broadly supportive of the switch to regional outcome agreements, Scotland’s Colleges’ “Response to Proposals for Implementing Putting Learners at the Centre” on November 29 2011 on page 18 recognises difficulties in changing to a funding methodology based on regional Outcome Agreements:

“To help develop these agreements, Colleges will engage with other stakeholders (e.g. local authorities, SDS, enterprise networks and other community planning partners) to discuss joint planning to meet regional skills needs including the contribution of regional outcomes. However, there needs to be a more clearly defined strategic role for Colleges both within a region and nationally, and particularly in terms of their membership of Community Planning Partnerships.

“It is appropriate that SFC indicate key national priorities to include in each region’s outcome agreement, however, these should not be seen as the only targets driving funding as this would constrain a college’s ability to work flexibly to meet regional needs.

“We concur that agreements should be assessed against outputs and broader outcomes and would wish to ensure that this does not lead to an increase in the already costly, complex and administratively burdensome systems needed to currently monitor activities”.

Issues will arise around Outcome Agreements based on progression and employment and inclusion of those who will not find either of these easy.

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FUNDING FOR COLLEGE STUDENTS

Education Maintenance Allowance Scotland

Scotland’s Further Education students and others are still able to benefit from an Allowance which no longer exists in England. There are serious effects from EMA withdrawal and its replacement by a narrower bursary system in England. EMAs in Scotland:

• are available to eligible 16-19 year olds – currently those born between March 01 1992 and February 28 1996.
• are available after reaching school leaving age
• will stop on reaching a 20th birthday
• can be paid for up to 3 years and up to 4 years for students with additional support needs

Depending on dependent children in a household, these are payable at £30 weekly for incomes up to £20,051 and £22,403.  To be eligible, students must have signed a Learning Agreement.

College Bursaries

Paid in addition to EMAs, individual College Bursaries may vary. The Aberdeen College Bursaries Advice  and Dundee College Money Matters are fairly typical.

Since some of these may face reductions, the National Union of Students Scotland is campaigning to ensure that their level should be preserved.

SKILLS DEVELOPMENT SCOTLAND INITIATIVES

Individual Learning Accounts

Individual Learning Accounts represent a Scottish Government scheme offering up to £200 annually per annum towards the cost of a learning programme. The offer is available to all residents in Scotland who are over 16 years and have an income up to £22,000 a year.

• Individual Learning Accounts ILA 200: £200 for courses such as SVQs and IT skills
• Individual Learning Accounts ILA 500: £500 for part time qualifications at Scottish Credit and Qualifications Framework (SCQF) levels 7,8,9,10 and 11. These include a part-time higher education or professional qualification course such as a Higher National Certificate.  This is delivered through the Student Awards Agency for Scotland

This scheme can be utilised to assist individuals to gain additional skills and qualifications to gain and sustain employment.

Get Ready for Work

Get Ready for Work (GRfW) is a National Programme to upskill, develop and support young people who may not be ready or able to access a Modern Apprenticeship or further education and want to access sustainable employment or further education. This is delivered by a range of Colleges, local authorities and providers across Scotland.

The programme is available to 16-18 year olds and lasts for six months. Trainees receive a weekly training allowance and expenses

GRfW comprises training and work placements with employer partners. During work placement trainees will receive “on the job” training and development to further enhance employment prospects and gain sustainable employment. Typical College providers include Forth Valley College, Kilmarnock College and Motherwell College.

Training for Work 

Training for Work offers vocational training to anyone over the age of 18 who has been continuously unemployed for 13 weeks. Some are able to enter the programme immediately.

Following referral from JobCentre Plus, Training for Work provides skills in response to an industry’s specific needs. Training can be tailored to meet the needs of local employers, which offers a better chance of getting a job. City of Edinburgh Council is a typical provider.

Modern Apprenticeships

Modern  Apprenticeships offer anyone between the age of 16 – 19 paid employment combined with an opportunity to train for jobs at craft, technician and management levels.  This offers a way to gain skills and qualifications to start a career without having to study full time across a wide range of industries. MAs offer:

• The occupational SVQ for the sector
• Core Skills – skills to become a more flexible employee, able to adapt to constantly changing work Situations.  These skills are known as Core Skills and are:

1. Communication
2. Working With Others
3. Numeracy
4. Information Technology
5. Problem Solving.

Modern Apprenticeships and their Frameworks are managed by the Modern Apprenticeships Group at Skills Development Scotland. Funding depends on age, SVQ Level and sector and may vary from just over £1000 to over £6000.  These payments assume provision of a contribution for the Apprenticeship Framework and Awarding Organisation.  There is a range of College examples from Ayr to Oatridge.

Apprenticeship Training Agencies

The Learning and Skills Improvement Service in England offers the “Guide to Setting Up an Apprenticeship Training Agency” . ATAs are apprentice recruitment agencies which then ‘hire out’ apprentices to employers – who then become “host employers”. This is based on the Australian model, where Group Apprenticeship Schemes are the largest employers of apprentices, with over 40, 000 apprentices, around 10% of the national total.

The ATA has the responsibilities of an employer and ensures the apprentice gets paid and receives appropriate on-the-job training. Formal training and assessment is delivered by a training provider with an existing apprenticeship contract.

For employers, ATAs offer an advantage since they conduct recruitment and matching apprentices for host employers, especially during current economic difficulties with uncertain order books and workloads. They also offer ongoing mentoring, especially to younger apprentices. If relationships with the host employer don’t work well, the ATA usually finds another apprentice or another training provider. For these services, the host employer pays the ATA the apprentice’s wages and an ATA management fee. The ATA deals with payroll, support and supervision of the apprentice and remains the legal employer. This has advantages, especially for SMEs, since the ATA and host employer work together to provide a good hosting match for the apprentice.

For Colleges, there may be some reluctance to pursue this since if the College as an ATA becomes an employer, the apprentice becomes a member of the College staff, with staff conditions attached. There may still be merit in further exploration of Colleges and other providers to become ATAs.

Flexible Training Opportunities

Employers up to a maximum of 150 employees can make applications for up to £5000 towards employee training costs with Flexible Training Opportunities. The Flexible Training Opportunities scheme offers up to a 50% contribution towards training costs (excluding training required by legislation or statute, including Health and Safety or inhouse delivery)

The employer can apply for funding up to 10 claims per annum, up to a maximum of £500 per claim. For example, this means that for training costs of £1,200, there will be a grant of £500. Eligibility conditions are:

• Employers with up to 150 employees
• Must have registered by Sunday 21 March 2012
• Must have completed training by 30th June 2012
• An employer can apply for funding for up to 10 claims.

The following two schemes are aimed at maintaining an employed status for apprentices,

Employer Recruitment Incentive

The Employer Recruitment Incentive offers businesses an incentive of up to £2000 when recruiting a Modern Apprentice or employee.

• 16 to 19 year old who is recruited or has progressed to a Modern Apprenticeship from Wednesday 21 December 2011
• Individuals aged 20 and more than 3 months unemployed starting a Modern Apprenticeship from Wednesday 21 December 2011
• Also available for 16-19 year olds within 26b weeks of having completed Get Ready for Work and  TPA and for those leaving Training for Work entering employment.

Adopt an Apprentice

Adopt an Apprentice Modern Apprentices continue with their training in a new workplace. The scheme gives a financial incentive to employers who take on an apprentice who has been made redundant.

“The preferred option is to secure employment with an alternative employer to allow the apprentice to complete their training. Once a Training Provider has been made aware (either from the apprentice or the relevant employer) that an apprentice is being, or has been, made redundant because of the economic downturn, the Training Provider should take all steps to secure alternative employment either through their own contacts or by working with the relevant Sector Skills Council”.

Low Carbon Skills Fund

Energy businesses working to support a low carbon economy can access the Low Carbon Skills Fund for training to increase expertise in this growth area. This is available to businesses focused on developing skills in carbon reduction, installing and using renewable energy resources, and increasing energy efficiency which have no more than 250 employees.

The Low Carbon Skills Fund gives Scottish businesses with up to 250 employees the opportunity to apply for up to £12,500 towards employee training costs. It

• provides funding for up to 25 episodes of training
• provides 50% of training costs, up to a maximum of £500 per episode

A list of the types and levels of training that are eligible for support, including:

• renewable energy, low carbon technologies and microgeneration
• energy efficiency, environmental and clean technologies
• waste management and reuse
• reducing carbon in supply and energy management

Additional Support

SDS will also help parents/carers and young people to access advice and information on welfare benefits. Nevertheless, it is always advisable to seek expert advice from agencies which specialise in these areas. There is also the official UK Government Website or a local Jobcentre Plus advisor for the most up to date information.

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LOCAL FUNDS

There are also various funds available to local residents and businesses:

The Commonwealth Jobs Fund (Glasgow) offers a  50% wage subsidy for 12 months up to a maximum of £6,507 for 35 hours a  week. Eligibility is for:

• Glasgow residents only
• SMEs with less than 250 employee
• Additional jobs, not displacement
• Permanent  jobs (minimum 18 month contract) 25-40 hrs per week
• Glasgow living wage £7.15 per hr
• 18-24 yrs unemployed 26 week (pre employment programmes accepted) available until 31st March 2013

The Commonwealth  Apprentice Initiative (Glasgow) offers a 50% wage subsidy for 12 months up to a maximum of £6,507 for 35 hours a  week. This means up to £8000 per employer for an apprentice. This is paid to employers in addition to contributions from Skills Development Scotland.

The West  Dunbartonshire New Employment Wage Subsidy offers a wage subsidy of up to pay of £140 per week for up to 13 weeks and offers a maximum of 50%  of gross pay. Eligibility is for:

• West Dunbartonshire businesses & residents only
• SMEs with less than 250 employees
• 16-40 hrs per  week
• Minimum wage & not exceed £7 per hr
• Unemployed minimum 3 months over 3 year period
• 16-19yrs  NEET (Not in Employment, Education or Training
• Additional employment opportunities not displacement

Other local funding which may be available will be reported in a future Huckfield briefing.

Local Additional Support Needs

There are also local support programmes for those with Additional Support Needs. A list of additional local support is provided through this link.

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COLLEGE INITIATIVES

More renewable energy developments are supported by Colleges and may provide further funding sources. These College examples do not represent an exhaustive summary of various Colleges’ involvement in renewable energy development. Further college developments for onshore and offshore renewables and other available funding will be reported in a future Huckfield briefing.

Adam Smith and the Hydrogen Office

There is a new partnership between Adam Smith College and The Hydrogen Office, established to provide expertise and innovation for energy education. Adam Smith and The Hydrogen Office have recently run school road shows in Fife for pupils aged 12 to 15 years, highlighting new energy sources and careers.

The Partnership will provide wider access to equipment and technological advances in the energy sector, with in-depth insight into new practices being used by companies.  Students studying renewables, construction and engineering courses may also get chance to work on special projects with The Hydrogen Office.

The College is also currently developing a Degree in Renewable Energy Technology with Abertay University.

Carnegie College and West Coast Energy

Carnegie College has close relationships with the renewables industry including with West Coat Energy for Renewable Energy Scholarships.

Up to six scholarships will be available to local young people to provide financial support for students studying Engineering and Renewables at the College, as well as providing mentoring aid supported by West Coast Energy. The company’s community benefit package of £3,500 per megawatt was revised following local consultation. The College has a campus at the Fife Energy Park, Methil, providing training for wind turbine technicians.

Dundee College

Dundee College has joined the Universities of Abertay and Dundee, Angus and Perth Colleges to form Energy Training East with Dundee Renewables, to harness expertise from Dundee City Council, Scottish Enterprise and Forth Ports, Skills Development Scotland and JobCentre Plus to pilot a training regime.

Edinburgh Telford College

Based at its new Granton campus, the College has a partnership with PPL Training for its Renewable Energies Training Centre.

Inverness College

Inverness College has its SEAM (Sustainable Energy And Micro-renewables) training centre for training and research in renewable energy and sustainable construction technologies, with support from the Scottish Government CARES programme, Community Energy Scotland, Highlands and Islands Enterprise and an EU Northern Periphery Partnership project called SMALLEST.

Scotland’s Colleges are represented on the Forum for Renewable Energy Development in Scotland (FREDS) Skills Group. 

Further examples of Colleges’ involvement in Renewable Energy Projects, developments and funding will feature in future Huckfield  briefings.

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LOCAL COUNCILS AND COMMUNITY BENEFIT FROM RENEWABLE ENERGY

With more onshore windfarms gaining planning consents and becoming operational, several local authorities are now developing and formalising their policies and guidelines for Community Benefit. Some examples are provided below. This is not an exhaustive list and further examples will follow in later Huckfield  briefings.

Since many local communities are affected by development of windfarms, this section recognises that most Renewable Energy Community Benefit funds rightly prioritise applications from local communities. Examples below show Community Benefit policies which are being developed for larger regional infrastructure funding, including skills development. Most of these are at an early stage and updates will be provided in further postings.

Dumfries and Galloway Council

Dumfries and Galloway conducted a Windfarm Community Benefit Framework Review in April 2011. “Windfarm Community Benefits. Revised Approach 2011 Information for Communities”  Section 7 refers to a Minimum Developer Contribution:

“The standard minimum rate of contribution is £5,000 per megawatt per annum based on the  installed/consented capacity of the windfarm. For example for a windfarm development with installed capacity of 25 megawatts, the community benefit fund would be £125,000 per annum. This rate will be index linked from 1st January 2011 based on the Retail Price Index”.

“Windfarm Community Benefits Revised Approach 2011 Information for Developers” in Section 6 refers the establishment of a Regional Socio Economic Fund:

“50% of the funding will be ring-fenced for a Regional Socio-Economic fund. The purpose of this fund is to invest in social, economic and environmental projects that support a sustainable low carbon economy. Projects will seek to deliver in one or more of the following areas:

• Business and skills
• Environment and community
• Cultural and tourism
• Affordable housing
• Community transport
• Improved broadband connectivity

The region-wide fund will take applications from constituted community groups, communities, organisations including the public sector from across Dumfries and Galloway. Further information about the operation of this policy can be obtained from Dumfries and Galloway Council, Economic Development Service, Business and Enterprise Team on 01387 260078.

South Lanarkshire Council

South Lanarkshire was one of the first local authorities to set up a Renewable Energy Fund. With Whitelee and the other windfarms, Community Benefit practice in South Lanarkshire is now well established.

Renewable Energy Fund

The two options are:

• Main renewable energy fund – grants over £10,000 up to 50% of total ‘eligible’ costs.
• Local grant scheme – grants of less than £5,000 and up to 100% of total ‘eligible’ costs for smaller community-based projects

Application for financial assistance for projects within a 10km radius of participating renewable energy developments will be accepted from:

• public organisations and agencies
• partnerships, trusts, co-operatives and other non-government organisations
• community groups, associations or organisations
• any business, co-operative or other trading enterprise located, or offering a service benefiting communities, within a 10km radius of participating developments.

Applications will be considered from outside the 10km radius if it can be demonstrated that the people who will benefit live inside the eligible area. Any grants awarded would be proportional to the percentage of residents who would benefit from the project.

Argyll and Bute Council

Argyll and Bute Council has had a policy on Community Benefit since 2004, when it was decided by Councillors that the initial tariff would be £2000 per megawatt installed, with an additional £1000 per mW depending on annual output. The latest list of Argyll and Bute Community Windfarm Benefits gives an indication of distribution of these benefits.

Scottish Borders Council

Scottish Borders’ Council has issued a comprehensive toolkit “Achieving Community Benefit from Commercial Windfarms” on page 10 says:

“There are no hard and fast rules about the level of community benefit which can be achieved, but some real examples include: – Highland Council aims to achieve £4,000 to £5,000 per installed megawatt per year”

Highlands Council

On Highlands Council has also made clear its intention to maximise community benefit from windfarms, a policy to be launched on Friday 24 February 2012:

“Members also gave the go ahead for a new concordat to be established which will set out the terms of a new relationship between the Council and developers.  As part of this agreement it will be the Council’s responsibility to provide the framework and infrastructure for receiving and then disbursing Community Benefit and through which developers will agree to provide not less than £5,000 per installed megawatt annually that will appreciate each year in line with the UK Retail Price Index”

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OTHER ORGANISATIONS AND COMMUNITY BENEFIT FROM RENEWABLE ENERGY

As more windfarms receive planning consent, are being constructed and become operational, in addition to local authorities, other organisations are now formalising their approaches to Community Benefit associated with these developments. The following provides some Scottish national examples:

Scottish and Southern Energy (Scottish Hydro)

In November 2011 SSE announced details of a new Scotland Sustainable Energy Fund that could be worth more than £90 million over 25 years:

“The fund will be available for organisations promoting skills development, community energy schemes and improving the built and natural environment. The fund is in addition to the £150 million SSE has already committed to support community projects in Scotland over the 25-year projected lifetime of the company’s existing and planned wind farms”.

SSE’s commitment is based on a tariff of:

“£5,000 per megawatt for all new onshore wind farms constructed in Scotland from 1 January 2012. This will comprise £2,500 for local community initiatives and £2,500 per megawatt for the new Scotland Sustainable Energy fund”.

While all this is at an early stage, in future there may be substantial community benefit funding available for larger projects including skills development. As progress is made, there will be further Huckfield briefings.

Scottish Power

Scottish Power operates the Green Energy Trust, providing grants up to £25,000 for renewable energy with community benefit, including a wider educational element.

Forestry Commission Scotland

Forestry Commission Scotland is working with developers to build wind and hydro projects on national forest land. FCS has published a helpful guide to its thinking in “Opportunities for Community Involvement In Hydro or Wind Renewable Energy Development On the National Forest Estate“.

Forestry Commission Scotland deserve credit for setting the “benchmark tariff” of £5000 per installed   megawatt since this is becoming the standard tariff for wind farm community benefit across Scotland.

The Opportunities for Community Benefit document shows selected developers for Hydro and Wind Generation Lots across Scotland. The developers will engage with local communities about processing Community Benefit. All this is still at an early stage of development. But further information will be posted in future Huckfield briefings as soon as it becomes available, especially where developers follow precedents above of allocating benefits available into local community and strategic projects.

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HIGHER EDUCATION ACADEMY

Further Education Colleges may participate in and benefit from Higher Education Academy programmes below, if they or individual staff are subscribers or HEA recognised professionals (see below).

The Higher Education Academy has only recently started offering subscriptions to FE Collages with HE provision. This was mentioned in the HEA’s recent HE in FE briefing

All HEA programmes are open to Scottish institutions – with the one exception of the National Teaching Fellowship Scheme, which is currently only open to institutions in England, Wales and Northern Ireland.

For further information about subscription rates, Colleges should e mail Dr Andy Jackson, HEA’s Head of Business Development for further information.

The Higher Education Academy is a national and independent organisation, funded by the four UK HE funding bodies and by subscriptions and grants. The HEA Strategic Plan 2012-2016  shows expertise and resources to support Higher Education to enhance the quality and impact of learning and teaching. HEA supports various networks and provides resources, events and workshops relating to learning and teaching in Higher Education for 28 different disciplines. HEA has an office in Edinburgh.

HEA works with individual academic staff, curriculum discipline groups and senior managers to identify and share effective teaching practices in order to provide the best possible learning experience for all students.

HEA’s work is focused in three main areas – Academic Practice Development; Teacher Excellence; and Institutional Strategy and Change. “Support and Services to Higher Education: 2011 and Beyond” provides an overall summary of HEA activities.

Funding and Programmes

Though not all programmes are currently open for bidding the following represent examples of possible funding from HEA:

Professional Recognition

The Professional Recognition Scheme contributes towards the professionalisation of teaching by conferring the status of Associate Fellow, Fellow, Senior Fellow or Principal Fellow.

Teaching Development Grants 

For Teaching Development Grants over the next year there will be a total of £1.5 million of funding available for individual grants, departmental grants and collaborative grants on the themes of internationalisation or employability. Development Grant funding exists to stimulate evidence-based research and encourage innovations in learning and teaching that have the potential for sector-wide impact.

The closing date for an Individual TDG Application Form is Sunday 19 February 2012.

The Collaborative Grant themes are internationalisation or employability. A total of £570,000 will be available with a maximum of £60,000 per project. Project duration will be 18 months. Collaboration may be cross institution and/or interdisciplinary. The project lead must be a Fellow of the Academy.

The application process for TDG Collaborative Grants opens on Monday 27 February 2012 and closes on Sunday 22 April 2012.

Change Academy 

Submissions are now open for Change Academy 2012. The HEA, in partnership with the Leadership Foundation for Higher Education, seeks submissions from HE institutions across the UK interested in taking part in the year-long Change Academy programme. Change Academy is a flagship programme designed to support institutions as they implement complex change projects to enhance the student learning experience. There is a Change Academy Guidance and Proposal Form. The closing date for submission is Friday 02 March 2012.

Internationalisation 

Connections: Pilot Projects Supporting Internationalisation The Higher Education Academy, in partnership with the UK Council for International Student Affairs (UKCISA), invites institutions to submit applications for funding to support projects which will:

• enhance the teaching and learning experiences both for international students studying in the UK and home students in the context of internationalisation
• promote intercultural understanding to prepare students for employment in a global context.

Bidding for the last deadline closed on Monday 30 January 2012.

There is a handy summary of all HEA Funding Opportunities, including links to the following:

• Workshop and Seminar Series - Call for Proposals and Proposal Form
• Teaching Development Grants
• HEA UK Travel Fund
• International Scholarship Scheme
• Doctoral Programme
• Connections: Pilot Projects Supporting Internationalisation

As mentioned previously, the Higher Education Academy has a specific Higher Education in Further Education section and directory.

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EUROPEAN STRUCTURAL FUNDS

 2014-20 Funding Proposals

Though at an early stage of development, the European Commission’s proposals for regional, employment and social policy is beginning to take shape. The Commission’s main points of interest concerning future funding are based on a Common Strategic Framework. 

European Regional Development Fund, the European Social Fund the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund will be brought together under a Common Strategic Framework.

Europe 2020

The objectives of the programme will be aligned to objectives of Europe 2020 which are:

• 75% of the 20-64 year-olds to be employed
• 3% of EU’s GDP to be invested in Research, Development and Innovation
• Greenhouse gas emissions 20% lower than in 1990
• 20% of energy from renewable sources
• 20% increase in energy efficiency

•  Localism: Emphasis has been placed on encouraging the development and delivery of programmes at a more local level. This is demonstrated by:

• Joint Action Plans: The development and delivery of a group of projects with a minimum public contribution of €10 million, to defined targets and outputs carried out under the responsibility of the beneficiary. A Member State, managing authority or any designated public body can submit a proposal for a Joint Action Plan.

• Integrated Territorial Investment: Where an urban development strategy or other territorial strategy requires an integrated approach involving investments under more than one priority axis of one or more operational programmes; essentially combining ESF, EAFRD and ERDF money.

• Community Led Local Development: led by local action groups composed of representatives of public and private representatives, with no single interest group of public sector organisation having more than 49% of the voting rights.

ERDF Priorities

• 20% on Energy efficiency & renewables
• 60% on research & innovation and competitiveness of SMEs
• Improving access to and quality of information and communication technologies
• Climate change and moves towards a low-carbon economy
• Services of general economic interest
• Telecommunication, energy, and transport infrastructures
• Enhancing institutional capacity and effective public administration
• Health, education, and social infrastructures
• 5% on Sustainable urban development

ESF Priorities

• Employment promotion
• Investment in skills, education and life-long learning
• 20% on Social inclusion and the fight against poverty
• Enhancing institutional capacity and efficient public administration

Progress so far  

On Monday 19 December 2011 there was a “Future Scottish EU Programmes Roundtable” in Glasgow, to share preliminary thoughts on a possible 2014-20 EU Programme:

“Discussion took place on the targeting proposed by the European Commission and the expected reduction of funds to approximately two‐thirds of current levels.  The Commission is proposing that 52% of funds should be targeted on ESF.   Currently only 42% of the LUPS Programme is targeted on ESF for example, meaning in the future Programme ERDF will proportionally take the larger share of cuts”.

“The proposed prescriptive allocations for 80% of possible activity to be spent on RTD & Innovation; SME Competitiveness; and Low Carbon activities alongside, a target of 15% to be spent on financial instruments and 5% for integrated urban development, means we need to be clever about  integrating these percentages across/within the themes.    It was noted that the prescriptive allocations would be something a number of Member States would challenge during the negotiations, so could be subject to change.

“There was general agreement that the three pre‐selected ERDF themes are largely those we ought to be looking at, but need to build in maximum flexibility to fund things across the themes within one operational programme and to enable future unknown priorities to be accommodated”.

The note from the meeting also says that:

“Consideration should be given to removing restrictions on the retention of revenue funds, making staff and overhead costs eligible expenditure, aligning known national funds and making it easier to use private sector funds as means to improve match funding”

With 60% of ERDF funds prioritised for research, innovation and competitiveness of SMEs, 20% for Energy Efficiency and Renewables and 5% for Sustainable Urban Development, this leaves 15% for ERDF other services and access. This means that Higher Education and Business Support organisations may feature as applicants, assuming that State Aids implications can be clarified.

Transitional Areas

The EU’s Cohesion Policy 2014-2020 proposes that 11.6%  or €38.9bn of Structural Funds should be spent on Transition Areas. These will be NUTS 2 regions whose GDP per capita is between 75% and 90% of the average GDP of the EU 27 Countries.

There will obviously be much discussion about the EU’s proposed Transition Regions – those in between less developed (Convergence) and more developed (Cohesion) Regions in the present programme.  In Scotland this includes the area in the current Highlands and Islands Programme.

More developed areas (the current Cohesion Areas, including Scotland’s LUPS Programme area) should receive 15.8% or €53.1bn.

Though there is much still to be discussed, all this means that Scotland’s previous Objective One Programme area might continue to receive higher levels of EU funding. Further developments will be reported in future Huckfield briefings.

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KNOWLEDGE TRANSFER

In November 2011, Frontline Consultants completed a Review of the Developing Employer Engagement Programme and Knowledge Transfer Grant, which has recently been published by Scotland’s Colleges. This Review shows that Scotland’s Colleges have been highly successful with limited amounts of DEEP and Knowledge Transfer Grant funding. On page 18:

“We have excluded the lower impact data from our aggregation to avoid double counting:

• In 2008, net employment impact was estimated at 253, 120 and 103 jobs respectively for the year 1, 2 and 3 surveys.  This suggests that net employment attributable to the programmes in that year could have reached 476 net jobs.
• Net GVA impact can be aggregated across the three surveys to cover the five year period 2006-10.  We discounted all the impacts back to 2006 using the HM Treasury discount rate of 3.5%.
• This suggests that over the five year period 2006-10, £23.65m (PV) of net GVA impact could be attributable to the college employer engagement programmes (Table 5.5).  This is an average of £4.73m net GVA (PV) per year.

All this shows that comparatively small amounts of targeted funding for Scotland’s Colleges produces very good results.

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EMPLOYER OWNERSHIP POLICY DEVELOPMENT

A series of reports in Scotland and England have called for greater involvement of employers in the design and delivery of skills. Under Employer Ownership Pilots in England, employers will directly receive public funding to purchase training and skills from providers.  These new pilots may provide relevant experience for Scotland.

UK Commission for Employment and Skills “Review of Employment and Skills”

In July 2011 the United Kingdom Commission for Employment and Skills published its “Review of Employment and Skills” in Scotland.

On page 25 under “Customer Focus: What is the Challenge”,  the Report said:

“…………… Although there is evidence of customer involvement in design and delivery of provision in the skills system, and employer involvement in co-design of services for large-scale recruitment, this is not a regular and consistent feature across the whole range of employment and skills services. ………There is limited customer consultation in design and delivery of programmes, offering very few opportunities for customers to influence or develop and take control of their own innovative and positive employment solutions”.

Review of Post-16 Education and Vocational Training in Scotland

To ensure more employment engagement and involvement, Willie Roe’s detailed “Review of Post 16 Education and Vocational Training in Scotland” in August 2011.  On page 49 he said that the UKCES Report represents a “call to action for:

“Employers to engage more effectively with local partners that deliver employment and skills services, clearly signalling their needs and becoming involved in the design and delivery of provision”

Review of Vocational Education – The Wolf Report

Though this Report covers provision in England, this section is relevant to Scotland. Alison Wolf’s “Review of Vocational Education” was published in March 2011. Prof Wolf on page 143 writes:

“Indeed our third major objective should be to recreate and strengthen genuine links between vocational education and the labour market; and especially, in the case of young people, the local labour market. Employers are the only really reliable source of quality assurance in vocational areas, and, in spite of lip service, have been progressively frozen out of the way vocational education operates”.

“Review of Post-16 Education and Vocational Training in Scotland”

In August 2011, on page 71 Willy Roe’s Report recommends the creation of Business Education Networks at local level:

“At the level of each local authority (or combination of local authorities) there should be established a Business-Education Network to co-ordinate and extend the wide range of connections that exist (or will be created in the coming years) between businesses, schools, colleges, and training providers. Some places in Scotland already have a vehicle of this kind. The Networks should be co-funded from the private and public sectors”.

“Preparing Learners in Scotland’s Colleges for Employment or Further Study”  

“Preparing Learners in Scotland’s Colleges for Employment or Further Study” August 2011 is an aspect report on provision in Scotland’s Colleges by HM Inspectors on behalf of the Scottish Funding Council. The Report says on page 17:

“However, in many subject areas in many colleges, advisory groups are not effective in bringing employers and programme teams together for the benefit of the college, employers and learners”.

In recommendations on page 25:

“Scotland’s Colleges should:

• consider how best they can collaborate in meeting the need for workforce development, given that only 23% of employers in the SESS used a college for workforce training.

“Putting Learners at the Centre: Delivering our Ambitions for Post-16 Education” 

Following this, the Scottish Government’s “Putting Learners at the Centre: Delivering our Ambitions for Post-16 Education published in September 2011 on page 31 said:

“Employers consider  their needs are  not sufficiently well articulated; that institutions are insufficiently responsive and flexible in terms of where, how and what is delivered; and, therefore, we are not well placed to anticipate and respond to current and future labour market demand.”

On page 32 the Scottish Government’s pre legislative paper continued:

“We will improve this situation, where necessary looking at radically alternative models which put employers in the driving seat”

Following these references above to the need for more employer involvement, various structures, including Skills Investment Plans, are currently being explored and developed in Scotland to secure more employer participation in vocational training and skills delivery.

Employer Ownership Pilots 

These following paragraphs on proposed Employer Ownership Pilots in England are included since they may have relevance for future Scottish Government policy.

On Thursday 17 November 2011, the UK Business Secretary Vince Cable announced their Employer Ownership Pilots initiative for England. Under the proposed £250mn programme, employers will be given the power to design, develop and purchase the vocational training they need.  Vince Cable said then:

“We have to fundamentally alter the relationship between employers and the state – giving employers the space and opportunity for greater ownership of the vocational skills agenda, including the chance to bid for direct control of public funds”

“Employer Ownership of Skills” 

Part of the Scottish Government’s intentions may be guided by the UK Commission on Employment and Skills publication of “Employer Ownership of Skills” published on Tuesday 13 December 2011.

Employer Ownership Pilots represent the start of a phased gradual withdrawal of public funding for employer led training and a new environment where through UKCES and the Skills Funding Agency, public funding acts as market maker. Innovative suggestions include a public funding role in employer training as underwriting, as guarantor or for reducing risk.

The Coalition Government’s wider rationale is that 60% of employers use private training providers. For provision in England the Government will now encourage employers to take ownership of their training agenda. This means moving from provider funding, based on qualifications, to employer-based structured investments and loans to leverage additional outcomes and work experience and moving from provider led to employer owned workforce development.

Section 6 of the UKCES “Employer Ownership of Skills” policy document says:

“Public investment will be provided directly to businesses, sitting alongside businesses’ own private investment, rather than following the mainstream public funding model.

“As part of the pilot, employers will be asked to demonstrate how public investment would be used to leverage business investment and  commitment to raising skills levels in their sector, supply chain or local area and how they will support Apprenticeships”.

None of the above seeks to project that similar policies will follow in Scotland, or that this could be one of the “radically alternative models which put employers in the driving seat”, to which “Putting Learners and the Centre” on page 32 refers. However, whichever direction is followed, what is happening in England is surely relevant?

AND FINALLY

Finally, many grateful thanks are owed if you’ve persisted and read through all this and think it’s the end. In reality, it’s probably only just the beginning.

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Especially, this piece – with apologies for its unenviable length – seeks to summarise the deluge of  Local Government funding initiatives and consultations which appeared immediately prior to Christmas.

Regional Policy by Eland House and Victoria Street

Instead of making tracks to Priestley Wharf to see Advantage West Midlands, West Midlands Councils and LEPs must look to funding available and allocated at national level and, just as important, to increasing their own powers. From management of EU Structural Funds to devolving Community Budgets, the Departments of Communities and Local Government and Business Innovation and Skills have replaced the Regional Development Agency.

1)      Core Cities with their LEPs will fare best. They might do even better with an Elected Mayor – though this shouldn’t become a celebrity sideshow contest.

2)      Non Core Cities with a LEP will become more dependent on their LEP. Though Wolverhampton can benefit from the Black Country LEP and Coventry from the Coventry and Warwickshire LEP,  perhaps they should think of leading a new national Non Core Cities Group? They might establish links with Nick Clegg’s Core Cities Unit and invite them to meetings.

3)      District Councils and second tier authorities need seriously to think about reinventing themselves. Through funding and governance changes, in future, there will not be a “mainstream” or typical District Council.

A) LOCALISM FUNDING – THE NATIONAL PICTURE

Before examining different funding routes for the three groups of councils above, this Section details DCLG and other funding now available or allocated at national level.

 i) The Economic Background

For all authorities, irrespective of their size or grouping or whether or not the Eurozone stays intact, the economic background is not good.

While in his Autumn Statement the Chancellor spoke of two more austerity years stretching into the next Parliament and taking £30bn more out of the economy, there has been little mention of further spending reductions he required during the present Parliament until 2015. In the Local Government Chronicle on Thursday 15 December 2011, Tony Travers, Director of the Greater London Group at the London School of Economics in a piece called “Bad Times are Here to Stay” wrote:

“In the light of the Chancellor’s announcement that there will be a public sector pay cap for a further two years, adjustments have been made to spending levels for the years up to 2014-2015. The Department for Communities and Local Government’s ‘local government’ spending line has been cut by £240mn in 2013/2014 and £497mn in 2014/2015″.

He continues:

“Health service spending will rise by 3.8% in cash terms this year, while local authority revenue spending fell by more than 3%. DCLG capital programmes have been chopped by 46%, compared with an 11% public sector average”.

“Council expenditure at the end of the current decade will probably be at the level, in real terms, it was 20 years previously”.

“Public sector austerity will last until at least 2017/2018 – unless the Eurozone implodes, when cuts might have to continue until beyond 2020. This may be a bleak midwinter message, but it is an entirely realistic one. Bad times are here to stay”.

And though local councils may extend their territory though setting up Health and Wellbeing Boards, forthcoming changes in Education Capital and Revenue Expenditure could mean that much future education funding completely bypasses them.

The relative position of the West Midlands is shown in the Price Waterhouse Cooper UK Economic Outlook Chapter Four “Regional Household Exposure to Finance Stress”

“The West Midlands stands out as a potential area of concern here, with both low earnings growth and high increases in unemployment, perhaps reflecting the particularly severe impact of the recession  on relatively cyclical manufacturing industries in that region”

“The North East and Wales are the regions that have suffered the highest levels  of household financial stress since the  recession began, followed by the West Midlands. A mixture of high increases in  unemployment and economic inactivity rates; marked falls in house prices and increases in personal insolvencies have all contributed to these findings”.

“Closing the North-South divide is therefore more difficult than ever for government, particularly at a time when money is tight and so the scope for significant transfers to more highly stressed regions is limited, particularly within England!”

ii) European Funding

EU funding will be covered in a later posting on this site. Under current 2007 to 2013 EU Structural Funds Programmes, Local Councils and LEPs may continue to apply for European Regional Development Fund, provided they can find the required match funding contribution. Applications may be made for ERDF, irrespective of size or council designation.

The West Midlands has more limited access to European Social Fund than some other regions, where some local councils have opted themselves to become ESF CoFinancing Organisations.

Councils can also apply under a wide range of Transnational Programmes including Eighth Framework. Applications may be made under most of these, irrespective of council designation.

And, despite previous difficulties, there’s always possible future development of JESSICA (Joint European Support for Sustainable Investment in City Areas)  and JEREMIE (Joint European Resources for Micro to Medium Enterprises) – about which more at an appropriate time.

iii) Regional Growth Fund

A detailed analysis of the regional breakdown of receipts from the first two rounds of Regional Growth Fund bids shows that almost 70% of the projects successful in the first round (April 2011) were located in the North of England. Second Round Winners show 55% in the North.  So far this shows that the West Midlands is not a major beneficiary region from Regional Growth Fund.

However, the formulae for the Growing Places Fund and New Homes Bonus are more favourable to the West Midlands.

iv) Growing Places Fund

On Monday 07 November 2011, the Growing Places Fund Prospectus launched  a £450m invitation for local partnerships to bid for infrastructure funding that will promote economic growth and the delivery of jobs and homes. The fund has been distributed indicatively by formula to LEP areas. The formula includes a 50% weighting given to resident population, and 50% given to “employed earnings”. These distribution criteria benefit more populous areas with higher rates of employment and higher average wages, mostly in London and the Greater South East.

So far the North has only received a collective total of 10%. The South East has received 20% whilst the broadly-defined ‘London mega-region’ as a whole has received around 40%. LEPs in the North East have received less than 5% of the GPF allocation, the North West under 15% and Yorkshire and the Humber just over 10%.

The Black Country has received £9.6mn.  Greater Birmingham and Solihull £14.9mn . Coventry and Warwickshire received £8.5mn.  Much will depend on structures involving local councils to use this revolving loan fund. 

v) Community Infrastructure Levy 

Though trailed by the previous Government, amended Community Infrastructure Levy Regulations were introduced on Wednesday 06 April 2011. DCLG is currently consulting on amendments following the Localism Act 2011, to require local authorities to pass some receipts to neighbourhoods where development is taking place and to clarify how receipts fund ongoing costs of providing infrastructure. All this gives more local choice over how to implement and utilise the CIL charge.

With DCLG’s capital programmes cut by nearly 50%, funding for new or replacement infrastructure funding might come from:

• Central Government Formula Grant
• Council Tax
• Disposals from Property Portfolio
• Prudential Borrowing
• Government Ring Fenced Grant
• Partner Investment (Network Rail or Energy Supply Company)
• Other Grants including Lottery
• Community Infrastructure Levy.

The National Infrastructure Plan published on Tuesday 29 November 2011 alongside the Chancellor’s Autumn Statement mentioned 500 projects and programmes worth more than £250bn. The Chancellor announced a number of initiatives, including borrowing against future Community Infrastructure Levy receipts.  In addition, the Chancellor announced £1bn for the road network and £1.4bn for rail infrastructure and commuter links.

As the DCLG March 2011 Presentation shows, Community Infrastructure Levy may be spent on infrastructure which legally includes (the list in the Act is not exhaustive):

• Flood defence
• Open space
• Recreation and sport
• Roads and transport facilities
• Education and health facilities
• Affordable housing

Authorities are advised to keep their infrastructure evidence simple and should demonstrate that there is an Infrastructure Funding Gap against existing funding streams. Authorities seeking to raise funds through CIL have to strike a careful balance between:

-        Meeting all or part of the infrastructure funding gap; and

-        The potential impact of CIL on the economic viability of development across its area.

One of the more solid works of reference on CIL is from the Planning Officers Society in October 2011. In addition, the Planning Advisory Service has been recently recruiting pilot authorities. So help is available for those authorities seeking to move forwards on CIL.

Shropshire is one of the DCLG’s Phase One Front Runners for the  introduction of CIL and has embarked on an admirably detailed local consultation at parish level about local projects using CIL and other funding. There are no West Midlands authorities in Phase Two of the DCLG queue. Because CIL is an important source of revenue, there is surely a need for more West Midlands authorities to become involved.

The Newark and Sherwood CIL came into force in December 2011. Redbridge and Shropshire followed on New Year’s Day 2012. Portsmouth and London (with its importance for Crossrail) are at Examination Stage. Broadland, Croydon, Huntingdonshire, Norwich, Poole, South Norfolk and Wandsworth await Examination.

Though six more authorities are consulting on their charging schedule, after Shropshire, there are no West Midlands authorities in any of these lists.

Since the first twelve CIL Charging Schedules show significant differences, it is difficult to predict average yields from CIL. But they will be significant.

Bristol predicts £14mn over five years. In its detailed Levy Rationale Background Paper in March 2011  Shropshire identified an overall Infrastructure Funding Gap of £385,459,000 for 2010 till 2026 for Road Transport Facilities, Flood Defences, Education, Medical Facilities, Open Space, Sports and Recreation, Police and Electricity Supply – based on estimates and existing developer contributions. This initially equlated to £17,800 per projected dwelling.

In her succinct but methodical Examiners’ Report to Shropshire Council on Friday 02 September 2011, Sue Turner concluded:

“Since the Core Strategy was adopted, work on infrastructure planning has continued.  The LDF Implementation Plan 2011/12 provides an up to date picture of the infrastructure projects to which CIL is expected to contribute.  It identifies a funding gap of £212,815,912 and an indicative CIL requirement of £180,148,912.   All of the figures above show that there is a significant infrastructure funding gap and demonstrates the need to levy CIL”.

Shropshire’s prediction of £180mn over 15 years shows that CIL can be a significant source of future income. In accordance with the DCLG Code of Practice, 10% of net CIL monies will be directed to strategic infrastructure schemes, and 90% of net CIL monies will be spent on local infrastructure.

Shropshire’s Community Infrastructure Levy documentation is all online and represents a first class online or distance learning tutorial in building a Charging Schedule and introducing the Levy.

As CIL Charging Schemes proceed, their Examiners may need to revise some CIL estimates on account of the following:

• Ageing population and changing implications for a range of social infrastructure facilities
• Changing household patterns. Many current planning ratios are based on historical household demands. More single person households are changing the pattern of education demands. Primary and Second School contributions are changing.
• Digital Media and changing models of learning, particularly in the FE/HE sector
• Externally commissioned service delivery and new models of delivering social infrastructure in partnership with retail and leisure establishments.

There are still outstanding issues about Councils’ ability to borrow against future CIL receipts, though Sections 1 to 7 of the Localism Act 2011 probably give more powers than some local councils may currently recognise. The easiest way to begin progress is through the Planning Advisory Service or Planning Portal sites on Community Infrastructure Levy.

CIL is not the only way in which local authorities can pre fund infrastructure since they can use income, loans and bonds, especially from 2013 onwards. But the Levy represents a step forward through its removal of the uncertainties and arguments surrounding the Section 106 process.

It will take time before most local authorities have a CIL scheme in place. Currently, only 35% have Adopted Local Plans and there is some interesting debate on what constitutes a “local plan”.  All this means that the remaining 65% may not be able to afford to wait for CIL and should get moving.

vi) New Homes Bonus

There was an extended piece on New Homes Bonus in Who Speaks for the West Midlands?

There is a useful DCLG New Homes Bonus Calculator on the DCLG site. From this Wolverhampton provisional total receipts for Year One and Year Two are £1.2mn and for Coventry are £2.8mn. For Birmingham these are £7.4mn. The ongoing issue to be decided is the extent to which New Homes Bonus is fully funded or siphoned off the Formula Grant.  

vii) General Power of Competence

The Localism Act 2011  provides local government with substantial new powers, greater freedom and flexibilities through a General Power of Competence, which will enable them to act in the interest of their communities and in their own financial interest. Local Government will be able to generate efficiencies and raise money by charging and trading in line with existing powers. Local authorities now have the opportunity to own assets, develop property and generate revenue. A growing number of councils are also examining a Local Authority Mortgage Scheme, with support for first time buyers through underwriting so much of their deposit.

viii) Communities

The Coalition is inching its way towards devolved powers, including Total Budgets at Community Level.

On Community Budgets, the Government announced on Wednesday 21 December that in Birmingham, Balshall Heath, Shard End, Castle Vale will become a pilot for more pooled budgets focused on prevention. Balsall Heath Forum and Shard End will be a community led approach. Castle Vale Community Partnership will led by a Housing Association. This process should mean moving power away from central government and allow communities and councils to assume greater control of, for example, skills, transport and employment. Community budgets should lead to more pooling of public service budgets.

Alongside Community Budgeting, Councils should not ignore the size of funding available for community projects in which they may become partners or for which they may provide match funding. Community groups have access to funding programmes to which local councils don’t. In September 2011 Big Lottery’s “Reaching Communities Programme” offers up to £500,000 for revenue and capital projects for most deprived LSOAs.

The Community Builders Fund, the latest round of which which closed on Friday 09 December 2011, has offered up to £750,000 loans and investments to support ‘community anchor’ organisations.

Various Social Investment and Social Impact Bond proposals offer similar sums from which their private investors seek a return. It’s worth keeping up to date with the Social Investment Business website.

There is more detail about funding for Community Projects elsewhere on this site. 

ix) Retention of Business Rates

Under new proposals in its Consultation Response to Proposals for Business Rate Retention, on Monday 19 December 2011,  DCLG proposes that councils will be able to retain a greater percentage from the business rates that they generate. It is hoped that the proposals will create incentives for councils to promote local economic growth as they will directly benefit from any increase in rates. Against this, there is increasing concern that the progressive redistribution which operates through the current centralisation of business rates will disappear.

Arising from previous concerns, in its Consultation Response, DCLG now proposes an initial rebalancing of resources using tariffs and top ups, based on previous average income, depending on whether an authority has received more or less in business rates than others. Despite this, there are still concerns about the potential of some areas to raise much more in business rates than others.

Local authorities will be able to come together to form a pool, with scope to generate additional growth through collaborative effort and to smooth the impact of volatility across a wider economic area.

B) GROUPS OF LOCAL AUTHORITIES

1) Core Cities

Throughout these difficult times, the Government’s designated eight Core Cities of Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield will have more direct access to funding.

“Unlocking Growth in Cities” – launched by Nick Clegg in Leeds on Thursday 08 December 2011 – heralded a series of ‘tailored deals’ between Core Cities and Central Government. There was no talk of a “second wave” for the rest. And some are predicting that only Core Cities will be able to bid for Tax Increment Financing in the new Local Government Finance Bill, published on Tuesday 20 December 2011.

Perhaps most depressing for Core Cities are the document’s current comparisons of GDP per capita and patent applications between English and comparable non capital cities in Germany, France and Italy. Only in education to tertiary level of 25 to 64 year olds are English non capital cities comparable.

For Core Cities, these proposed “tailored deals” represent a tempting menu:

• Giving cities one consolidated capital pot for investment
• Giving cities powers to create Business Improvement Partnerships
• Access to new infrastructure funding through Tax Increment Financing
• Devolving major local transport funding and the power to commission local, or even regional, rail services, including managing franchises
• Giving cities the power to consolidate local public sector property assets into a single local property company
• Creating ‘City Skills Funds’ and ‘City Apprenticeship Hubs’

Six out of the eight Core Cities have a Passenger Transport Executive, with precept powers –  so they have a regional reach. The Core Eight have their own structure and organisation, based in Manchester. Manchester, the most ‘core’ of all, benefits from the Greater Manchester Combined Authority as a forerunner for further devolved powers. In April 2011, the new Authority replaced a range of single-purpose joint boards and quangos to become a formal administrative authority for all Greater Manchester for the first time since abolition of the Greater Manchester County Council in 1986.

Though the Authority is still progressing initial procedural matters, ultimately, instead of GMCA’s bidding on a project by project basis, more funding could be devolved so that decisions on funding and expenditure could be taken in Manchester.

Bob Neil MP as DCLG Under Secretary told the Commons’ Delegated Legislation Committee on Monday 14 March 2011:

“The measure involves the authorities having competence concurrently with the joint authority, so the Government are satisfied that this is not a regionalising and centralising model, but that it is something of genuine collaboration”

But, despite this reasoning,  this is in reality Regional Government under another name. It’s also interesting that the Greater Manchester Combined Authority was set up under the Labour Government’s Local Democracy, Economic Development and Construction Act of 2009 not the Coalition’s Localism Act of 2011.

2) Non Core Cities 

It is the larger Metropolitan Authorities and Cities, especially in the West Midlands, which are left out of all this. Apart from Coventry and Wolverhampton, there is a long national list including Carlisle, Plymouth, and Preston. Each has a significant subregional hinterland. They might seriously think about becoming a new National Network and build relationships with Nick Clegg’s Core Cities Unit.

Coventry and Warwickshire LEP has other projects for a Growing Places allocation of £8.5mn apart from Coventry City. Coventry will vote on an Elected Major in May 2012. The Black Country LEP has £9.6mn to spend across four Black Country Boroughs. Preston will have to argue that the £13mn for Lancashire LEP under the Growing Places Fund should be spent in Preston. While some of this will happen, it would be better still if Non Core Cities might develop more direct access to their own funding.

Elected Mayors

What follows is not written in support of having directly-Elected Mayors, but to illustrate the Government’s consistency of approach in their favour.

There are currently 13 Elected Mayors. Though the Secretary of State has power to direct authorities to hold referenda – as he has done already – a petition by 5% of the total electorate can do so. This has already happened in Salford. Outside the Core Cities, under the Localism Act there will be referenda in May 2012 in Bradford, Coventry and Wakefield for Elected Mayors.

Overall policy on Elected Mayors appeared in the “Open Public Services” White Paper in July 2011, under Section 5.10 “Democratic Decentralisation: the key policies we are already implementing”:

“- giving cities the power to elect mayors …We will also consider making it easier for other cities to take up the option of city mayors. Decisions on whether a city should adopt the mayoral model should ultimately be for local people”

Directly elected Mayors hold office for four years. They decide on the size of the cabinet, appoint cabinet members and decide on the delegation of  executive functions. These executive powers may also be held by Council Leaders. Mayors set the Council Budget and formulate significant policy framework plans but amendment or rejection of proposals requires a two thirds majority in Council. Based on their mandate, Elected Mayors also have a range of “informal powers which enable them to influence, persuade and co-ordinate on a wider scale.”

Much of the argument for Elected Mayors made by the previous Labour and current Coalition Government is based on low turnouts at Local Council Elections. Though many local and regional debates show no strong preference for elected Mayors, the Chancellor of the Exchequer announced in his Autumn Statement on Tuesday 29 November 2011 that:

“As part of its commitment enable Tax Increment Financing, the Government will also consider allowing city mayors to borrow against future CIL [community infrastructure levy] receipts where this can make a significant contribution to national infrastructure.”

“Funding and Financing Infrastructure Investment” on page 7 of the National Infrastructure Plan, published alongside the Chancellor’s Statement, makes the same point:

“As part of its commitment to enable Tax Increment Financing, the Government will also consider allowing city mayors to borrow against future CIL receipts where this can make a significant contribution to national infrastructure”

The November 2011 DCLG Consultation “What can a Mayor do for your City?” makes the position clear in Section 21 on page 10:

“The Localism Bill, if enacted, will provide the Secretary of State with a power to transfer by Order, subject to Parliamentary approval, local public functions to any local authority outside London. Local public functions are functions currently the responsibility of government or other public authority, which are carried out in relation to the people who live, work, or carry on activities in the authority’s area”.

“Unlocking Growth in Cities” also emphasises that “tailored city deals” with transfer of powers for economic growth, infrastructure development, housing and planning, skills and employment may be available, but also that they represent a “two-way transaction”. Page 10, Section 1.18 “The Government’s Asks” says:

- “leadership and accountability: where cities want to take on significant new powers and funding streams, they will need to demonstrate strong, accountable leadership, an ambitious agenda for the economic future of their area, effective decision-making structures, and private sector involvement and leadership (cities with a directly elected mayor will meet this requirement)”.

All these policy documents above are not offered as evidence to support elected mayors but to underline the coherence of the Government’s preferences. They show how strongly the Government keeps pressing the case.

One of the strongest arguments against all this was mounted by Sir Howard Bernstein’s comment “An Elected Mayor is Not for Us” in Manchester Confidential on Tuesday 13 December 2011:

“In Greater Manchester, we have demonstrated that for reform to be successful, it requires a genuine bottom up approach rather than one that is driven top down from central government. Imposition of a mayor for the City of Manchester cuts across this approach”.

The Greater Manchester Local Enterprise Partnership (GM LEP) has also said that plans for directly elected mayors would bring no advantages to the city region.

Their argument is stronger because Greater Manchester now has a Combined Authority, which gives constitutional form to more than twenty years of the Association of Greater Manchester Authorities. All this shows that if Non Core but regionally significant Cities don’t favour Elected Mayors, they may need to strengthen their arguments for local accountability.

The risk with the Government’s strong preference for Elected Mayors in all these proposals is that some areas may get sidetracked with local celebrity contests from some of the real debates and arguments. Apart from accountability, DCLG seeks to devolve powers to bodies operating at the appropriate geography.  Though “Unlocking Growth” has much comment about cross boundary working. “Local economic area” is defined as the “functional economic area as defined by LEP.”

3) District Councils

Describing its “Future Councils: Life After the Spending Cuts“, published in September  2011, the New Local Government Network said that lack of funding and new rights for citizens to control service delivery “could, by 2020, leave local authorities in the same kind of position as the state government of California: struggling to provide services in the face of high demands, low income and increased direct democracy”.

Its author, Simon Parker, describes a gradual series of significant changes driven by budget cuts and rising demand for public services, so that by 2020 few Councils will be recognisable. He continues that beyond initial “traditional” cost cutting, some authorities will seek to slim down their core. Beyond this, some councils may become largely commissioning bodies. This brings back memories of Nicholas Ridley, MP for Tewkesbury. Throughout the 1970s and early 1980s from the Conservative Front Bench, he advocated that Councils should meet once a year to agree contracts with the private sector.

Liam Scott-Smith in the New Local Government Network’s ” Delivering Distinctiveness“: The Future for District Councils, amplified this further.  He offers four basic models:

-        Residual Councils are authorities who outplace a large proportion of  their services to outside providers. They may retain a pool of funding which can be targeted at specific projects or services for the poorest  communities.

-        Clustered Councils are authorities who through sharing so many services become de facto federations. Councils may cluster in major city-regions as each authority recognises the need to pool sovereignty to encourage greater economic growth.

-        Commercial Councils are very entrepreneurial councils. They will set up trading arms and be heavily involved in selling services to other local authorities. These councils could also begin to trade with business and the community.

-        Lifestyle Councils will focus primarily on promoting an areas brand and way of life. Such authorities will focus on capturing a niche focus through which to promote a distinctive local existence, both economically and socially associated with their areas.

These are significant options for District Councils and second tier authorities in times when local government is changing. They need working through for individual authorities. For example, why shouldn’t a Further Education College be a central feature in town centres rather than Tesco?  Hinckley and Bosworth offers the examples of strategies based on North Warwickshire and Hinckley College, a Business Improvement District and MIRA. There are many more.

District Councils will not have the same access as Core  Cities and Non Core Metropolitan Authorities to the bigger funding programmes. So the Government’s proposed funding reforms not only give second tier districts a chance to build local level partnerships but ultimately may force them into new relationships. Assembling funding packages from Community Infrastructure Levy, New Homes Bonus, retained Business Rates, including NHS, Further Education, Academies, LEP and Community Project contributions, will become more frequent.

So all this presents an opportunity for District Councils and second tier authorities to develop a distinctive role. The danger for many is not that their structures are unsustainable, but that they may not recognise opportunities in these changing times for increasing their influence and leadership. District Councils need more ownership of this inevitable process of change. If they don’t, they may become its victim.

And, Finally

My reason for such a lengthy post is that the flurry of Government documents published just before Christmas was plentiful and significant:

• “What can a Mayor do for your City?” was published on Tuesday 01 November 2011
• The Localism Act received Royal Assent on Thursday 15 November 2011
• HM Treasury’s National Infrastructure Plan, HM Treasury/BIS Plan for Growth: Implementation Update and the Chancellor’s Autumn Statement were published on Tuesday 29 November 2011
• “Unlocking Growth in Cities” was published on Thursday 08 December 2011
• Proposals for the Retention of Business Rates were published on Monday 19 December 2011
• Local Government Finance Bill Impact Assessment was published on Tuesday 20 December 2011
• Community Budget pilots were announced on Wednesday 21 December 2011

All this means that things are beginning to move. There is a general theme running through all of this – that local councils should act now before they are forced to act.

Above all, remember. It’s never over till it’s over.

• Compared with the North and other regions no one is putting the Case for the West Midlands
• In a brand new policy environment, there is “no going back” to previous structures and policies. The West Midlands needs to adapt to new funding structures
• The West Midlands needs a coherent policy approach without costly new structures but through more effective and efficient use of existing resources.

Putting the West Midlands Case

The steady flow of policy documents and projections from the West Midlands Regional Observatory ceased in November 2010.   Despite excellent subregional examples such as the “Black Country Education and Skills Barometer” in October 2011 and leading online policy analysis down to LSOA level by the Coventry Partnership, Marketing Birmingham and others are not yet resourced to fill this gap.

No one is putting “The Case for the West Midlands”.

A good starting point might be the wider acceptance of Birmingham as the regional capital or Core City and more recognition that the advocacy of many local projects is more effective when set against a West Midlands regional background.

But, as Michael Caine might say, “Not a lot of people know this”.

Things are different elsewhere. Across the North West, North East and Yorkshire and Humberside, they have succeeded in blurring their often significant differences to put “The Case for the North”.

The Northern Way

In the 1980s traditional rivalries between Manchester and Liverpool were so fierce that there was a Government Office in both. Today, through the Association of Greater Manchester Authorities, Manchester is viewed benevolently by central Government as a powerful City Region.

Across the Pennines the North East has long enjoyed a blend of solidarity and cooperation second only to Scotland. That was why John Prescott’s first elected Regional Assembly was trialled in the North East.

Despite local and regional rivalries, especially since 2004 through the Northern Way, cities as far apart as Manchester, Liverpool, Newcastle, Leeds and Sheffield recognised that the North West, North East, and Yorkshire Humberside would earn more respect if they spoke with one voice.

Without RDA funding the Northern Way ceased on March 31 2011. But the Case for the North continues to be made – through the Northern Regeneration Summit, North of England Education  Conference and Northern Housing Consortium. Many individual organisations, such as the Chartered Institute for Public Relations, though headquartered in London, hold a Northern Conference or have a Northern Office.

To fill the gap left by Northern Way, the Institute for Public Policy Research North is now collecting evidence for its Northern Economic Futures Commission.

The effectiveness of the Northern Way was endorsed in a thoughtful and not uncritical “Evaluation of The Northern Way 2008-2011″ in April 2011 by SQW. In Capabilities, ‘Strengths and Weakness’, SQW says on p152:

“Fundamental and cutting across all of these strengths, a major factor in the success of the initiative in the 2008-2011 period was that it became more focused on a smaller set of issues that were genuinely pan regional. This meant that it was filling a genuine strategic gap on behalf of northern partners. In doing this, it also clarified its role to be on more fundamentally about setting and influencing the agenda rather than ‘doing delivery’”.

Michael Ward in the Smith Institute’s “Rebalancing the Economy: Prospects for the North” in March 2011 in its Executive Summary on page 6 now advocates that Northern local authorities and others should now go further:

• The report recommends that the three Northern regions should take the initiative with business, universities, and the community and voluntary sector in establishing a new, strategic advocacy body for the North – ‘a Council of the North’ – to argue the North’s case in Westminster and Brussels….
• Local planning authorities in the three Northern regions should work together, initially on a non statutory basis, to develop a strategic plan for the North, covering key housing and employment developments, infrastructure and skills (similar to the London Plan).

The Joseph Rowntree Foundation’s “Rebalancing Local Economies” October 2010 - funded by the Northern Way – compares very different areas, ranging from Leeds through Liverpool Speke and Croxteth to the Tees Valley. One of its main conclusions is that while economic growth plays a crucial role in tackling neighbourhood deprivation, these benefits do not automatically trickle down to all neighbourhoods.

Following the establishment of the Institute for Public Policy Research office in Newcastle, the most important feature in all these reports is that they continue to reflect IPPR North, Joseph Rowntree, the Smith Institute and others demonstrating an ongoing convergence of public authorities to proclaim a united message for the North.

The Contrast of the West Midlands

In contrast, the West Midlands Leaders’ Board Statement of Intent and “Local Economic Assessments in the West Midlands” by Rocket Science in February 2010, despite their contemporary relevance, today sound like wistful longing for a bygone era. Though West Midlands Councils continues, as an umbrella body this is not resourced for an overall strategic or regionally representative role.  The closest approximation to a regional strategy body is the Local Management  SubCommittee for EU Funds.

The West Midlands struggles to find a collective voice.  It hasn’t even been possible to produce a harmonious let alone unanimous West Midlands response to High Speed 2.  Now that an astute new Transport Minister Justine Greening seeks ways for HS2 to become more politically acceptable, perhaps the West Midlands should too?

Michael Ward’s “Rebalancing the Economy: Prospects for the North ” in March 2011 on page 32 provides an effective summary of changes in Government’s policy following the Department of Business, Innovation and Skills October 2010 White Paper: “Local Growth: Realising Every Place’s Potential”: 

• changing the spatial level at which activity takes place, from the region to the functional economic market area
• withdrawing most of the money;
• institutional change – abolishing the RDAs and setting up the LEPs; and
• stopping some things and centralising others.

The Localism Act. Regional Growth Fund, Growing Places Fund, New Homes Bonus, Local Enterprise Partnerships and Core Cities all represent the Government’s chosen policy instruments and initiatives with which the collective North is more effectively coming to terms.

Resilience to Policy Changes

Regional economic resilience matters. But resilience in responding to fundamental Government shifts in policy matters even more.

Previous funding levels for regeneration will never be restored.  The House of Commons Communities and Local Government Select Committee Report on Regeneration  shows that this Government takes a radically different approach.

In its Report on Wednesday 19 October 2011 on “Resources” the Committee on page 12 said:

“In December 2010, DCLG published an economics paper commissioned by the previous Government, “Valuing the Benefits of Regeneration” in December 2010.  That paper estimated spending on “core” regeneration programmes by DCLG, the Homes and Communities Agency and Regional Development Agencies to be £11.189bn in 2009/2010. At our request, DCLG provided us with further financial data which showed that this spending fell to £7.926bn in 2010/2011 (revised from £9.1bn after taking account of in-year adjustments) and is estimated to fall to £3.872bn in 2011/12.

This means a 65% reduction in regeneration spending. But it’s worse than that. The 2011/12 figure includes £2.9bn on existing programmes and only £1bn on “additional programmes – the Regional Growth Fund, the New Homes Bonus and the FirstBuy scheme”.

None of these are primarily intended as regeneration initiatives. As Lord Heseltine, Chair of the Regional Growth Fund Panel, told the Committee:

“The fact is that Regional Growth Fund is not about regeneration. We have never been told to go and regenerate any community or anything like that”.

The Government does not believe that big spending regional agencies are effective. Enterprise Minister Mark Prisk told the Northern Summit in October 2010 Enterprise Minister Mark Prisk at the Northern Summit in October 2010 :

• “Between 1990 and 1999 – the year the RDAs were set up – Gross Value Added growth averaged 2.5% a year in the Greater South-East, and 1.9% in the remaining English regions – a gap of 0.6 percentage points,” Prisk said.
• “Between 1999 and 2008, under the RDAs, annual GVA averaged 2.1% cent in the Greater South-East, and 1.5% in the rest of the country – also a gap of 0.6 percentage points.”

Michael Ward also recognises the limitations of RDAs on page 25 of his “Rebalancing the Economy: Prospects for the North” under “Towards a Balance Sheet for the RDA Area”, where he says.

“But the real engine of job growth in the North in the New Labour years, it has been argued, was straightforward government spending on public services – mostly health and education. The RDAs accounted for only about 1% of total public spending in their regions”.

IPPR North’s October 2011 paper “Learning from the Past” on page 3 “The Recent Economic Story of the North”, basically agrees with this:

“Despite a determined programme of work and investments made by RDAs and their part­ners, a gradual evolution of the institutional framework towards more decentralised arrange­ments, and a benign economic environment, the headline figures remained stubbornly fixed. Between 2000 and 2008, while the annual rate of growth in GVA in the northern regions was a healthy 4.6 per cent, it was still below the England and UK averages of 5.2 per cent.”

So instead of big spending regional agencies, the Government has turned to more localised initiatives, some of which are described below.

Where the New Money is Going

Regional Growth Fund

In its “Regional Growth Fund Updated Briefing” in October 2011 Northern Housing Consortium shows on page 5 how abolition of Regional Development Agencies has disproportionately affected the North:

“Spending out turn figures for 2009-2010 show that the North’s comparative disadvantage means that the Northern RDAs accounted for 43% of total English RDA spending, despite the fact that the Northern Region comprises only 29% of England’s population.

Because of this, the Northern Housing Consortium recognises the significance of Regional Growth Fund on page 2:

“We were pleased to note that almost 70% of the projects which were successful in obtaining funding in the first round (April 2011) were located in the North of England, including two bids for housing renewal and growth in Wakefield and Hull.

“Results of the second round were announced on 31st October, 2011. 119 successful bids were announced, 49 of which affected the North East, 34 the North West, and 23 affecting Yorkshire and Humber.

The Consortium RGF Briefing in October 2011 continues on page 2:

“…there is a strong case for the vast majority of the RGF to be allocated to the North, which has been disproportionately affected by the abolition of Regional Development Agencies (RDAs), the cessation of Housing Market Renewal (HMR) funding, and the higher percentage of public sector employment in the North. Over the course of this CSR period, the RGF represents the main opportunity for the North to obtain finance to address these challenges through a transition to sustainable growth”.

Though Michael Heseltine as Chair of the Regional Growth Fund Panel doesn’t see the Fund as an agent of regeneration, many in the North still see the Regional Growth Fund as their best hope.

New Homes Bonus

The Northern Housing Consortium is rightly more concerned about New Homes Bonus. In its Report on “The New Homes Bonus: Risks and Opportunities for the North” in September 2011 the Consortium says on page 2:

“We found no relationship between New Homes Bonus payments and levels of deprivation. However, in the longer-term we are very concerned about the large net losses in funding many local authorities in the North will suffer from, once the majority of the Bonus is funded through top-slicing Formula Grant allocations. That is why the Consortium is calling for the Bonus to be fully-funded in future Comprehensive Spending Review rounds.”

In February 2011 £194mn New Homes Bonus was projected for 2011/2012 with £1.2bn over the next four years.  More than half of the first allocation went to Councils in London, the South East and East of England with £100mn.  Councils in the North East, North West and Yorkshire and Humberside received 20% of the total.

But depending on net additions to housing stock, in 2014/2015 NHB could be more than £1bn – almost the originally projected total for the whole scheme. Much will depend on how much represents a transfer from Funding Formula Grants and how much is fully funded.

New Homes Bonus is not large enough to provide regional rebalancing. But, matched with other funding, it might form an element of a West Midlands strategy.

The Centre for Cities “Room for Improvement: Creating the Financial Incentives Needed for Economic Growth” July 2011) analysing the First Round of New Homes Bonus 2011/2012 shows the significant position of the West Midlands. The Report on page 39 says:

“Our modelling suggests that the strongest supply response will be in London (a 21% increase over the baseline). This can be attributed to the relatively steep spending cuts experienced by London Boroughs and that, with a high affordability ratio across the capital, most authorities are not constrained by a lack of demand. The second strongest supply response is in the West Midlands (10%).

So despite Birmingham’s overall loss, collective use of New Homes Bonus may be able to contribute to a West Midlands strategy.

Growing Places Fund

The Growing Places Fund Prospectus in November launched a £450m invitation for LEPs to bid for infrastructure funding for promote economic growth, jobs and homes. The fund is distributed indicatively by formula to LEP areas, based on a 50% weighting given to resident population, and 50% given to ‘Employed Earnings’ – criteria benefit which benefit London and the Greater South East.

The North in total has only received 30%. The South East has received 20%. The ‘London mega-region’ has received 40%.

The Black Country received £9.6mn, Greater Birmingham and Solihull £14.9mn and Coventry and Warwickshire £8.5mn. The North East received £16.7mn . Greater Manchester received £24.7mn

But Growing Places success as a revolving fund will depend on LEPs’ ability to lever additional private and other resources.

Possibilities with the New Money

While Regional Growth Fund, New Homes Bonus, Growing Places Fund and future announcements on Retention of Business Rates and Core City Deals may form ingredients of a regional strategy, none of these heralds a return to a previous scale of regional development spending.

But they do show a need for strategic thinking, collective initiative and a return to a more informal collective approach which has benefited the region in the past.

Strategic Added Value for the West Midlands

The West Midlands lacks the Strategic Added Value and strategic thinking of Advantage West Midlands.

In “Towards a Resilient Region: Policy Activism and Peripheral Region Development” by the Spatial Economics Research in September 2010, economists at the University of Newcastle make a relevant point on page 9:

“Whilst much attention has focused on the role of political leadership at the time of crisis, resilience thinking also looks to the role of intelligent institutional leadership in framing and articulating the nature of the event, crisis or slow-burn process and constructing a discursive narrative of strategic adaptation or adaptability able to enrol local and regional actors”

This research shows how One NorthEast identified Renewable Energy as an emerging technology, with the creation of the New and Renewable Energy Centre. Based on development of internationally recognised research and development, testing and commercialisation infrastructures, this offered the prospect of 3000 jobs in the supply chain. One NorthEast ploughed significant resources into NaREC.

But Advantage West Midlands has already overseen similar investment in the West Midlands. There is no doubt that regionally strategic projects, such as the Premium Automotive Research and Development Programme at Warwick University and the strategic regeneration of Longbridge, could be developed to play the same role.

The March 2009 PWC Evaluation of Regional Development Agencies “Impact of RDA Spending” published by BIS under “Performance against Objectives” referring to additional GVA, makes a similar point on page ix of the Executive Summary:

“….Moreover, such an assessment overlooks the wider economic impacts of RDAs’ activities which are not captured in the estimated impact on GVA. These include the social and environmental impacts and effects of RDAs’ strategic role and wider influence other regional and national stakeholders (SAV), neither of which has been valued as part of this analysis”

It’s not regionally significant resources but regionally strategic thinking which matters.

A start has already been made in some local areas. Look at the presentation from Shropshire Council on Monday 21 November 2011 on “Delivering Local Priorities Through Partnership Working” using Community Infrastructure Levy and Section 106.

Though all this is less than regional, it’s a good example of the new thinking needed. Based on this a West Midlands LEP might use Community Infrastructure Levy, New Homes Bonus or even TIF to fund the Growing Places Fund.

The Heart of the West Midlands Case

At the heart of any West Midlands’ case is the region’s more than 50% dependency on lower value added private sector activities such as some business services, wholesale and retail, hotels and catering and cultural, recreational activities.

There is severe under representation in higher value added business and professional services, environmental technologies, digital media and medical technologies is the key to improving economic performance and generating more highly skilled jobs.

The West Midlands case might be based on upskilling and diversification strategies identified for the regional by Cambridge Econometrics for Advantage West Midlands and others in 2009 and 2010. These included:

• The need for higher skills
• The need to strengthen our industrial structure
• The need to improve regional gross value added

In  the Regional Observatory’s “The West Midlands Economy Post Recession: Key Issues and Challenges” June 2010, on page 24 under Cambridge Econometrics ‘diversification’ scenario there would be an increase of more than 200,000 in regional employment.  High value added business & professional services could create than 100,000 net new jobs. ICT could create 30,000 net new jobs.

Surely HS2, Regional Growth Fund, New Homes Bonus, Growing Places Fund, the Deal for Core Cities and other proposed regional improvements fit somewhere into all of this?

Though the numbers may have changed since the Cambridge Econometrics Report, the basic strength of the case hasn’t.

Informal Collaboration 

This is not a call for statutory or semi statutory structures.

One of the most effective examples of West Midlands regional cooperation is sometimes overlooked. The Post 1999 Group, convened informally by Jon Bloomfield at Birmingham City Council, effectively cut across sub regional boundaries and defined the parameters of 2000 to 2006 European Programmes – with substantial Objective 2 rural coverage in Herefordshire, Shropshire and Worcestershire.

The Group’s true legacy is that with Advantage West Midlands match funding, many of today’s regionally significant projects were devised and delivered.

A move in this direction began on Monday 05 December, when West Midlands European Office convened a meeting to decipher how the region might lever further European funding under proposed 2014 to 2020 Structural Funds. West Midlands Universities were invited to draw up a list of possible projects.

Despite the cuts, the West Midlands still has some excellent local authority economic development departments and an enviable diversity of further and higher education projects. But no one is bringing them together, even on an informal basis like the Post 1999 Group.

A start might be made based on Jaguar LandRover’s newfound investment from Tata. JLR is now a £10bn turnover company, which employs more than 21,000, mostly in the West Midlands. If the West Midlands can’t turn that into one element of a regional strategy, it hardly deserves to be called a region.

The piece highlights some of the more important proposals and changes in these papers.

Funding for Training the Unemployed

After the August Riots there were changes in funding under Learner Eligibility Rules. “New Challenges. New Chances” extends those cohorts who will be eligible for Government funding including: (on page 6)

• “Unemployed people on benefits who are looking for work to access labour market relevant courses, which help them improve their skills or re-train to help them get a job
• “Those at risk of social exclusion to support them to access community learning. We remain committed to safeguarding a range of learning opportunities that support access and progression for people who are disadvantaged and least likely to participate”.

At the moment, further details are awaited on both of these. They are included here since both are changing. Under the Youth Contract, which was included in the Chancellor’s Autumn Statement, those on Job Seekers’ Allowance for more than 6 months will be able to keep their benefit and enrol for training.

Community Learning will be through pilots described below. There is more about this in Community Project Grants.

More Flexible Delivery

There are at least three portents of more flexible future delivery:

1) “Innovation Code” from “Colleges in the Community”

Some relaxation is proposed for delivery which is not yet in the Qualification and Credit Framework. “New Challenges. New Chances” on page 6 seeks to promote innovation and enterprise by:

• “Supporting FE colleges and providers to draw down funding for programmes that meet a particular employer skills need whilst they are simultaneously developed for the QCF. This “Innovation Code” was a recommendation from Baroness Sharp’s Report on Colleges in their Communities and will operate on the understanding that colleges and providers will work with appropriate partners to develop the programme to fit the specifications of the QCF so that over time it can become part of a nationally regulated offer”.

The actual recommendation from Baroness Sharp’s “Colleges at the Heart of Local Communities” was more specific:

• “Establish an ‘innovation code’ to allow flexibility to fund responsive provision which meets locally assessed priority needs. This should total up to 25% of the college’s adult skills budget per annum (by September 2012), rising to 50% (by September 2014).

It remains to be seen how this sits alongside the current DfE Consultation for Study Programmes for 16-19 year olds, which includes “one qualification of substantial size” and the new proposed Employer Ownership Pilots which will seek to transfer funding from providers and qualifications to employers for their  greater involvement in designing qualifications.

2) Skills Funding Agency - Funding for Job Outcomes

“New Challenges. New Chances” says on page 12:

“FE colleges and providers can also access units and full qualifications from the Qualifications and Credit Framework to design a flexible pre-employment training offer for the people who are unemployed and looking for work to enable them to access jobs in the local labour market. Where an individual’s main goal on starting a course is to get a job, from 2012 the Skills Funding Agency will pilot paying for job outcomes”.

As the “Skills Investment Statement 2011-2014″ which accompanies  “New Challenges. New Chances” says on page 5 describes this:

“In the 2012-2013 Academic Year the Skills Funding Agency will trial making payments on the basis of job outcomes for unemployed learners, whose training is being fully funded. This trial will enable the payments to be integrated into the new simplified funding system from the 2013/14 Academic Year. The amount will be relative to the size of the learning aim in line with the approach taken to funding qualification achievements. This will ensure the amount paid for an outcome is proportionate to the funding paid for the student’s training”.

3) Awarding Organisations

“New Challenges. New Chances” on page 18 introduces the prospect of more flexibility for Awarding Organisations:

“Following the recommendations in the Wolf report, we will consult on whether current National Occupational Standards are fit for purpose in a job market where the nature of work is evolving rapidly and individuals change occupations more frequently.

“Where there is demand, Awarding Organisations will be able to develop new assessments based on criteria which ensures rigour and is focused on the core English and Maths skills needed in the labour market and for progression. We will expect greater employer involvement in the development of these awards and assessment models that are flexible enough to support lower level learners to progress.”

These above sections on increased flexibilities represent new approaches for the Skills Funding Agency. It remains to be seen how “Innovation Code” programmes to “fit the specifications of the QCF” or flexibility under Job Outcome Payments and for Awarding Organisations will sit alongside the “Consultation on 16-19 Study Programmes” which seeks more coherent programmes. It seems that not all of these initiatives may be pushing in the same direction.

National Careers Service

There is more about the proposed National Careers Service. “New Challenges. New Chances” on page 7 says:

“In April 2012 we will launch the National Careers Service, building on Next Step. The Service will have a new focus on specialist careers guidance, built on the principles of independence and professional standards, and will ensure there is a strong information, advice and guidance offer available for young people and adults”.

This Service will be provided online, with a helpline and a “network of organisations providing face to face careers guidance in the community to adults” and those over 18.

With 1.16mn 16 to 24 year olds not in employment, education or training, even with the £1bn (£940m) Youth Contract programme over 3 years which aims to provide work placements, apprenticeships and advice and guidance for 18-24 yr olds and particular support for 16-17 yr old NEETs, there will still be a significant gap in provision. (More details on the Youth Contract in the Chancellor’s Autumn Statement are included in the posting below). Connexions no longer exists in a form which is needed. The end of Education Maintenance Allowances – which for many young people at least enabled their regular access to advice and training – has deterred many young people from attendance and thus being supported.

Leadership and Management Advisory Service (LMAS)

LMAS has performed an interesting role for providers, especially colleges, to gain access to smaller employers. It’s a pity that more don’t know about it and the way it works. “New Challenges. New Chances” says on page 10:

“The Leadership and Management Advisory Service (LMAS) is a £20 million programme offering support to up to 13,000 high growth SMEs and social enterprises in the 2011-12 financial year to help develop their management capability. In the 2012/13 academic year, LMAS will be aligned with Business Coaching for Growth and will form part of a package of support including: coaching of senior management teams; access to business and knowledge networks; and fast-track access to trusted sources of specialist advice such as the Technology Strategy Board and UKTI.

This is an extension to a useful programme for providers since it enables early engagement and access to small businesses which can form the basis of further support. The current scheme enables projects with a total cost of £2000, with the company matching the LMAS grant 50/50.

Higher Vocational Education

Before the 1963 Robbins Report on Higher Education, because of large numbers of part time students, Further Education Colleges delivered more higher education than universities. The 1966 Higher Education White Paper designated some FE institutions as ‘polytechnics’. But for 20 more years FE Colleges continued to enrol almost as many students as 29 polytechnics on higher education courses.

The prominent role of Further Education Colleges is once becoming more recognised. “New Challenges. New Chances” gives encouraging recognition of a Further Education role in Higher Education on pages 12 and 13:

“These changes will have significant implications for many FE providers. Further education already provides nearly 40% of new entrants to higher education (HE). The sector is an increasingly significant HE provider in its own right, hosting around 180,000 students on HNCs, HNDs, Foundation Degrees, degrees, Apprenticeships and professional awards. Colleges have a distinctive mission in delivering locally-relevant, vocational and technical higher-level skills across the country.

“The use of the title “college of further and higher education” has received support from FE colleges with significant HE who wish to express that fact more explicitly. We will review the criteria for adoption of this title to ensure they better reflect the new and emerging landscape. We will take account of the outcomes of the Government’s proposed reforms to higher education including those proposals around university and university college title.

“Whilst many colleges and providers have long and established track records in offering Level 4 technical and professional qualifications, this has been a neglected area in policy terms for some time, particularly around what has become known as ‘non-prescribed higher education’. We will develop and promote the concept, identity and value of our ‘Higher Vocational Education’ portfolio with clear, flexible and articulated progression routes into Levels 4, 5 and 6″.

During last month’s HEFCE HE Margin Bidding process, there were only 34 bids from HE Institutions, and 167 bids from Further Education Colleges to support students on HE courses. FE Colleges are keen to improve the range of their Higher Education offer.

The whole education funding landscape is changing – from Early Years to Higher Education. Rather than Further Education and Higher Education Institutions’ seeing each other as competitors, since they both have a distinctive offer hopefully more delivery partnerships will arise.

Community Learning

There is a current consultation on the £210mn annual “pot” for Adult Safeguarded Learning. Recipients, including many local councils, are free to decide how they deliver provision across these areas.

• Personal and Community Development Learning
• Family Literacy, Language and Numeracy
• Wider Family Learning
• Neighbourhood Learning in Deprived Communities

Effectively these previously separate funds are now “de ring fenced”. Though the Skills Funding Agency requires that learner numbers should be maintained, there are stronger arguments for refounding this funding in local community structures. “New Challenges. New Chances” on page 13 is constructive about this:

“BIS funding will continue to support a universal community learning offer, with a wide range of learning opportunities available to all adults in England.

“The consultation endorsed a new, clearer commitment to using the public funding subsidy to support access, and progression in its widest sense, for people who are disadvantaged and who are furthest from learning and therefore least likely to participate. In the 2012/13 academic year we will pilot different locally-based ‘community learning trust’ models to channel Adult Safeguarded Learning funding and lead the planning of local provision in cities, towns and rural settings. If this proves to be an effective model we will roll out community learning trusts across England to begin full operation from summer 2013.”

There is more about this in Community Project Grants.

Colleges and Offender Learning

The National Offender Management Service is gradually extending its territory throughout mainstream vocational training delivery. NOMS itself is an ESF CoFinancing Organisation. “New Challenges. New Chances” on page 15 provides further insight:

“Following a review we launched Making Prisons Work: Skills for Rehabilitation in May 2011, setting out a new strategy for offender learning. The strategy sets out an increased focus on vocational and employability skills, and introduces a decisive shift to local decision-making based on clusters of prisons between which prisoners move. It also sets out the Government’s commitment to trial outcome payments giving colleges and training providers a greater stake in delivering learning successfully. Prison Governors will work closely with the Skills Funding Agency and other partners to determine a mix of learning provision that will fit offenders for the range of jobs and Apprenticeship opportunities available to them in the areas to which they are released.”

College Governance

As mentioned above, all funding and delivery structures throughout education are changing. On page 19, “New Challenges. New Chances” is much more specific than in previous versions on College Governance, emphasising these new freedoms for colleges:

” … through the Education Act 2011 we have removed a wide range of restrictions and controls on college corporations, putting colleges on a similar footing to charities operating within the independent/private sector. Corporations no longer need to seek permission to change their Instrument and Articles and the legislative requirements for these are now reduced to a minimum core of essential elements. A Corporation can decide to dissolve the college itself, if this seems the best approach to ensure the provision of high quality, flexible provision to meet the needs of their local areas. We will continue to ensure that the naming of colleges is accurate and meaningful. We will review ways of protecting the terminology and titles in relation to FE colleges to maintain the high reputation of the FE sector.

“In considering the needs of their local areas – whether these are cities, towns or rural areas – we expect colleges and providers to look at a wide range of evolving models, including joint models across the post-14 education sector”.

“New Challenges. New Chances” continues by suggesting new structures and models for colleges on page 19:

• Setting up companies or, trusts
• Or mutualisation models, in line with the Coalition’s commitment to support the creation of new public service mutuals, empowering employees to take over the services they provide.

Various partnership structures are suggested – with other colleges, employers, UTCs and working with Group Training Associations for apprenticeship delivery:

“Colleges might take up the opportunity to sponsor, establish or work with Academies (3-19 or 16-18) or Free Schools (3-19). There are many examples of this already working in practice, for example there are currently (as of November 2011) 27 FE colleges across the country sponsoring or co-sponsoring Academies, with a further 15 due to sponsor Academies in 2012.

“The vital accountability to communities is recognised in Baroness Sharp’s review of colleges’ role in their communities. Any college considering a major change in their delivery model will undertake a College Structure and Prospects Appraisal and consider carefully and thoroughly the impact on their communities, consulting widely and transparently on their proposals, and taking explicit account of the views of the people – learners, employers, and the broader community – that they serve.

“College corporations must recognise that they are operating in an open market which should allow for new entrants, offering greater choice and diversity. The processes for developing new delivery models or securing new provision or partners should be transparent and through open and competitive procurement practices, with demand driving a more diverse supply side

All this surely means that there will be no longer a typical FE College.  Some will join forces with academies. Others may form Free Schools and Colleges. Others may form joint trusts with employers under Employer Ownership Pilots. Colleges are free to find their place in the market place.

Colleges now “Providers”

However, unlike the new freedoms of the 1992 Further and Higher Education Act, Colleges and other providers no longer have a Funding Agency as a backstop or Funder of Last Resort. They don’t have a Central Bank for their Sovereign Debt. What is not emphasised is that following Royal Assent for the new Education Act on Tuesday 15 November 2011, colleges are now providers to the Skills Funding Agency. This is a neat way of resolving the conundrum post by the National Audit Office refusal to close the Skills Funding Agency’s accounts while it was deemed responsible for Colleges’ viability.