Promoting social inclusion in the labour market

Policy guides

Localism

The government has turned the tables on localism: top down governance from Westminster is out and more powers for local government, including policy-setting and budget management, is now the name of the game. But what does this mean in practice and how effective is this new approach proving to be?

Localism and the coalition government

The Conservative- Liberal Democrat coalition government elected in May 2010 has a very strong commitment to localised service delivery in principle, as well as an agenda for welfare reform. Elements of both these agendas were set out in their coalition agreement.

Localism is integral to the new government’s plans and its underpinning philosophy. The Secretary of State for Communities and Local Government said in his first major speech (11 June 2010), that his priorities are “localism, localism and localism”.

The ring fences around grants to local authorities from central government, which link pots of funds to particular purposes, are being removed to allow authorities to determine local spending priorities. As set out in the coalition agreement, Regional Development Agencies have been replaced by ‘local enterprise partnerships’ which are bodies led jointly by employers and local authorities, and have taken on the mantle of primary social and economic development agent for their communities.

In short, the coalition government is one that will localise as its default approach. However, in the field of welfare reform, it is not yet clear how the local level will influence mainstream, centrally contracted employment support provision. The Work Programme will replace a number of current employment services contracts (including the Flexible New Deal), rolling up support for different groups (lone parents, disabled people etc) into one contract. Despite the localist rhetoric and economic ‘steward’ role envisaged for local authorities, to date the coalition government has not set out a clear and robust mechanism to wield influence over key building blocks of economic prosperity – mainstream employment support, training and skills development provision.

Localism under the previous government

A hallmark of the New Labour government (1997-2010) was increased central direction of locally delivered services through target setting and inspection regimes. This led to a reduction in local ability to determine the nature of service provision and a new agenda of localism arose out of a critique of this centralisation process. Significant critics include the New Local Government Network, Localis and the Local Government Information Unit. Localisation, the devolution to local government of centrally decided and/or delivered services, is now accepted as central to delivering better outcomes.

The policy fields of welfare to work, employment, skills and economic development are leaders in localisation and a number of interventions have been introduced to increase local involvement, influence and control.

Localism and employment programmes

A major development in employment services provision was Lord Freud’s 2007 review of commercial welfare procurement strategy, which proposed larger, longer contracts. At the same time, and part of the localism agenda, the Department for Work and Pensions Commissioning Strategy proposed three levels of devolution for centrally procured back to work services. Local partnerships would have the opportunity to:

  • comment on bids for DWP contracts (level 1);
  • co-commission services alongside DWP provision (level 2);
  • control contracting and appoint preferred providers (level 3).

The Flexible New Deal was the first programme designed and commissioned in line with both the Freud Review and the Commissioning Strategy. Taken in tandem, this was a powerful step towards greater local involvement in employment provision. However, the evidence from the City Strategy Pathfinders suggests that in practice contracting remained a highly centralised process with less substantial local influence than initially thought. Localisation was a feature of the response to the recession.

The Future Jobs Fund was introduced in 2009 to incentivise partnerships – predominantly led by local authorities – to create jobs for young unemployed people, as well as some other key groups, left without work as a consequence of the recession. Importantly, the Fund aimed to be a catalyst for pooling and aligning local authority and other agency budgets to create a co-ordinated training and employment package.