‘Devolve to Resolve’ the jobs and skills challenge

By Charlotte Morgan | 29 September 2020

We need to be creative, brave and try things that no government has ever done before.

This is how, in a recent tweet, chancellor Rishi Sunak proposed that he would protect jobs at risk from the COVID-19 crisis and economic fallout.

With new ONS figures revealing the UK’s unemployment rate has risen to its highest level in two years – and Sunak freely admitting that the new Jobs Support Scheme will not ‘save’ every business and job when it replaces the furlough scheme in November – New Local Government Network (NLGN) has a proposition for the UK Government that would help people stay in work and tick all of Sunak’s boxes.

The proposition is: the significant, comprehensive and unconditional devolution of powers and budgets affecting post-16 employment and skills development policy, transferred from Whitehall to combined and local authorities across the country, so that local areas can develop more tailored and targeted labour market interventions based on the distinctive needs of their communities, places and businesses.

Local areas have distinctive employment and skills needs. This cannot be stressed enough. No two areas in the UK have exactly the same business environment and sector make-up, and the different impacts that the COVID-19 crisis is having on different kinds of sectors mean that a one-size-fits-all response to tackling rising unemployment and economic recession will not work for all parts of the country.

What works in a university town like Cambridge, where relatively few people have been furloughed, will not work in a town like Crawley, where many jobs rely on the struggling aviation sector and over one-third of its workforce has been in receipt of furlough or self-employment income support in the last six months.

Combined and local authorities are already responding to the adverse impact of the pandemic on their economies and labour markets. They already have employment support programmes, which are managed alongside local partners, to provide advice, mentoring, training and help finding work placements for people with complex needs who are not receiving national support such as out-of-work benefits. But these programmes are not designed to cope with the scale of demand that local government is anticipating in the coming months, especially from young people aged 16-24 and workers whose jobs are at risk because of lockdown restrictions.

Many combined and local authorities have set up new schemes to respond specifically to rising unemployment caused by the COVID-19 crisis, such as virtual jobs fairs, support programmes for new start-up businesses, and websites to match jobseekers with employers with vacancies. They could do so much more to help people into work during and beyond the current crisis if they had more autonomy over decision-making and budgets linked to employment, skills development and welfare support.

We know from experience after the 2008/09 financial crash that major economic shocks can last for years and have long-term impacts extending many years beyond the official end of a recession. But the Government’s current approach to devolution in England is too ineffective to make a difference. It is piecemeal, bureaucratic, convoluted and much too slow – with the publication of the long-promised Devolution White Paper likely to be further delayed following the resignation of its lead minister at the Ministry of Housing, Communities and Local Government Simon Clarke.

We cannot afford to wait any longer. Major long-term labour market interventions will be required to protect jobs and safeguard the employment prospects of younger generations during and beyond the pandemic.

These interventions must be planned and implemented locally, led by the combined and local authorities and partners who know their places best. The Government now needs to embark on a significant programme of devolution, giving local areas the tools they need to develop truly resilient and responsive local employment and skills systems to benefit employers, workers and learners alike.

When the impact of a major challenge is felt most keenly at the local level, the bravest, most creative and most innovative course of action a national government can take is to empower local areas to lead the response. Now that ‘Eat Out to Help Out’ has ended, we urge Rishi Sunak to ‘Devolve to Resolve’ and pioneer a more radical and comprehensive approach to devolution that will enable local government to protect jobs and support local economic recovery.

Charlotte Morgan is senior policy researcher for the New Local Government Network

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