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Onwards and upwards: leading from the front

Date of speech	10 December 2009
Location	Victoria Park Plaza Hotel, London
Event summary	Local Government Workforce Leaders Conference: 'Tough Times = Tough Decisions'

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Draft text of the speech - may differ from the delivered version.

Good afternoon. Thank you Councillor Comer.

It's been an interesting week. You'll have been considering how Monday's Smarter Government White Paper and yesterday's Pre-Budget Report impact on the sector - and I know it will have stimulated much debate. In many respects today's conference is well timed and l am very pleased to have been invited here to speak to you all.

Events like these are a real opportunity to think about important issues. I recognise that we are facing big challenges, these are indeed tough times for us all - but government, whether centrally or locally, must continue to innovate and make choices, and sometimes those choices will be challenging ones but ultimately they are driven by the desire and need to support the communities we serve to the best of our capabilities.

The recession has really shaped the landscape of public services over this last year. Whilst we, the Government, continue to take co-ordinated steps to deal with the biggest financial crisis for over half a century, we recognise that for many families and businesses there is still uncertainty.

You will of course have seen that both the Prime Minister and the Chancellor have this week set out the Government's strategy for cutting the national debt whilst protecting frontline services like support for the elderly and vulnerable, social housing, rubbish collection and recycling, without breaking family budgets. Our tasks as leaders, as innovators, and as Government remain 'securing economic recovery and promoting long-term growth'. Fairness underpins our strategy. And our measures will help ensure that vital resources are freed up to continue our investment in providing support to young people and their skills.

In reflecting on this week's announcements I don't want us to loose sight of the real challenges we face; especially in supporting young people.

Pre-Budget Report and Smarter Government

The Prime Minister, in the Smarter Government White Paper, set a radical vision and series of challenges to streamline Government and transform frontline services - putting local people first in helping to deliver further public service reforms that improve standards. By freeing up frontline services we are helping you to give local people the choice to determine what works best in your local areas and communities.

Greater local flexibility to innovate and collaborate will help deliver better quality public services more efficiently. Making councils respond to national objectives is not helping to ensure you can fully respond to the needs of your local communities. Smarter Government introduces measures that will cut the red tape burden by reducing revenue streams, ring-fencing, targets and inspections on front line services from 2010 by building on the Total Place pilots; making total place a reality.

Public sector pay

And in yesterday's pre-budget report, the Chancellor set out an ambitious package of measures across public sector pay and pensions - in both areas, the Government expects senior staff on higher incomes to show leadership. We must lead from the front - restraint will be critical in delivering fiscal consolidation whilst protecting frontline workforces and minimising the effect of tighter budgets on workforce numbers.

I don't want anyone to think we do not recognise the vital, and often very hard work of public sector workers. Workers in local government are at the heart of delivering world class public services and supporting long-term economic growth, prosperity and fairness. But tough times require tough decisions - and leadership.

The new measures to help deliver pay restraint are about leading by example. The Government will seek a 1 per cent pay cap on basic pay uplifts across the civil service and those parts of the public sector we manage for 2011-12 and 2012-13, which will generate around £3.4 billion (by 2012-13) in savings. Government has invested significantly in the public sector workforce since 1997 and average pay in the public sector has increased by 25 per cent in real terms, compared to 22 per cent in the private sector. As you prepare for your pay negotiations we expect that you too will seek to lead by example, liaising with your Trade Unions, and applying suitable restraint on pay where necessary.

You will be familiar with the work that John Denham is leading to ensure that Local Authority pay is consistent with the rest of the public sector. You will have noted that local government would be included in the review of senior pay that will report ahead of Budget 2010 and make recommendations to help ensure that pay and bonus caps across the public sector are affordable to taxpayers.

We also need to bring public sector pensions more into line with what is offered in the private sector. By 2012 contributions by the state to public sector pensions for teachers, the NHS, Civil Service and Local Government will be capped, saving around £1bn a year. While some of the comparisons made in the media between public and private sector pensions are unfair, it is right that Top Earning public sector workers make a greater contribution to the increasing value of pensions, with those earning more than £100,000 paying more. What would be unfair would be to irresponsibly ignore the need for affordability at the risk of the many.

Let us not be distracted from the reason why we are taking new measures around public sector pay and pensions. We need to free up resources to help focus on front line services. And we, in Government, recognise that we have our role to play in helping the sector achieve that, which is why Smarter Government set out radical plans for streamlining Whitehall and cutting red tape to free up councils' time and resources to help put the needs of local residents and the delivery of high quality services first.

Targetting support at young people

As well as my responsibilities in CLG, I am also a Minister in the Department of Work and Pensions. The key issue for our Department over the past year has clearly been responding to the recession and helping to support people - and particularly young people - who have lost their jobs to get back into work.

Our starting position is that unemployment is not something that we are prepared to accept. Before the recession we had an aspiration of full employment. That aspiration remains unchanged. We had virtually eliminated the scourge of long-term youth unemployment and we remain determined that this never again becomes a feature of our society.

This is why we have invested nearly £5bn to help people get work. This is more money for Jobcentre Plus; more money to provider organisations and new opportunities for those who are still unemployed after 6 months.

While unemployment is of course still causing huge problems, for people and communities across the country, the labour market is proving more resilient and more dynamic than in previous recessions, with many people still finding work. As the Chancellor said yesterday, unemployment has increased much less than expected by independent forecasters. I think this is in large part due to the actions of Jobcentre Plus and its partners, including local authorities.

While the figures in the last few months have been positive, unemployment is likely to continue to rise for a while yet. As such it is imperative that we don't stop the interventions that are proving successful. In particular, we need to continue to provide support for young people, who evidence shows can be most hard hit by recessions. Take the study of Bell and Blancheflower, for example, which compares 23 year olds out of work with those in the prime of their careers. It found persistent effects to young peoples' future earnings, future job satisfaction, health and general life satisfaction. What's more, it found that people out of work at this age continue to be affected two decades later in all these areas. This contrasts with people who suffer unemployment at 33, who only suffer affected wages down the line.

As a Government we are determined not to abandon young people, as in previous recessions, and never again suffer a lost generation. We will do what we can to get them back into work and give them the opportunities they need.

This is why we have announced that every 16 and 17 year old will have the right to a place in education and training.

This is why we introduced the Young Person's Guarantee, so that young people who get near 12 months on jobseekers allowance will be guaranteed a job, training or other meaningful activity. And this is why in the PBR yesterday the Chancellor announced that we will now be bringing forward this support, so that the Guarantee will be available to young people from six months of unemployment, with a mandatory requirement that they take up the support from 10 months.

Part of the guarantee is provided by the money we have invested through the Future Jobs Fund - allowing local authorities and others to bid to create 150,000 job opportunities - real jobs that would not otherwise have existed and are of benefit to local communities. Already, up to 95,000 jobs across the UK have been announced through the scheme.

Targeting our support and priorities at young people is vital. Providing real help and real support does make a real difference. While we are determined to keep acting from the centre, we can't do this on our own. To really flourish, young people don't just need jobs, they need careers. The need training, apprenticeships, advice, work experience, internships and mentors. They need help to get their careers going. This is where you can really contribute.

Backing young Britain

Earlier this year the Government launched the Backing Young Britain campaign calling on employers to pull together to help young people through the recession. Backing Young Britain is a campaign to support employers to do more to help young people into work - helping the young and sometimes most vulnerable get their first step on that career ladder.

Around 300 national businesses have signed up to Backing Young Britain already - providing, for example, mentors, work experience, internships and apprenticeships to young people. I have to say that we're a little disappointed that so few local authorities have signed up. I know that there is great work out there and that many more councils are leading the fight to help young people find work than the handful of sign-ups suggest.

I would hope you will take a moment to visit the website, sign up and tell others - including residents and employers in your areas - where you are focusing your efforts already and what else you are going to do.

There are a few areas specifically where I think that Local Authorities can play a key role in helping ensure that young people are supported.

For example, you can take on and tell everyone you know to take on an intern. If just half of the 1.2m employers in the UK took on one intern, more than 600,000 young people would be given a chance in a tough jobs market. Just imagine what you, and your suppliers, could deliver.

You can use Local Employment Partnerships with Jobcentre Plus to help those young people who are nearing long-term unemployment. I am pleased to see that so many councils are already signed up to a Local Employment Partnership - but we are aware that recruitment levels are much lower with less than 20 per cent of authorities taking on long term-unemployed people into jobs. Why not harness the opportunities created through your changing workforce to increase recruitment rates and achieve. Why not also work with your suppliers and local business' to encourage them to take on and develop the talents in the local labour market.

And you can offer and invest in Apprenticeships. I would urge you to review the vacancies in your organisations and work with your suppliers to maximise your potential to bring on apprenticeships. We know there is considerable support and enthusiasm from local government, as employers and in terms of stimulating local economies, but recent figures published by the LGA show that the sector is some way off of achieving the numbers in this aspiration.

LGA Workforce Survey figures published a few weeks ago showed that there are only around 7,000 apprentices in local government, and 22 per cent of local authorities are not offering entry level apprenticeship routes. The announcement in January that Local Government would double apprenticeship numbers from 7,500 to 15,000 was a very welcome one. With over 280 frameworks and the National Apprenticeship Service operational, we knew you could deliver on this ambition to deliver more apprentices, and help more young people. But we do need to turn these aspirations into reality now.

I am delighted to say that as the Apprenticeship Champion for Communities and Local Government my Department is currently - as I speak - reviewing applicants for our Departmental Apprenticeship recruitment campaign. We will create over 25 new apprenticeships in business and administration this year.

But we should not just look at what we can do - we should look at our spheres of influence, seeking where we can secure agreement to use our collective buying power to promote apprenticeships. Local Government spends around £42bn a year, we can not over-look the importance of maximising the social benefits of that investment by working collaboratively with suppliers. For example, like South Tyneside did to introduce appropriate social clauses and guarantee opportunities like apprenticeships, and like those contracts to help deliver the Olympics that include specific ambitions to provide apprenticeships.

My Department is walking the talk on this issue with the Housing Pledge. We have committed to making it a requirement for all construction projects in the public sector to have apprentices as an identifiable proportion of the workforce where we are delivering against our aspirations. Government departments and their agencies have undertaken to deliver 20,000 apprenticeships through procurement and suppliers. The question is how big is your ambition to work with your suppliers?

We can't deliver change alone. Central and Local Government will need to working together to turn Backing Young Britain into more opportunities for one of the most vulnerable groups in our society. But we know when we work together we achieve a huge amount. I would like to take this opportunity to thank Cllr Houghton and his review team for the excellent work they did around the role of local partners in getting people back to work. This collaborative approach, where local government shapes the agenda for central government, was influential in getting the Future Jobs Fund off the ground - a real example of what we can achieve when central and local government work together to make a real difference. The extension of this scheme is testimony to its successes.

Let's continue working together - to target our support through Backing Young Britain and channel our opportunities through apprenticeships. As a Smarter Government we want local authorities to have the freedoms to be able to concentrate on services and support for these vulnerable groups.

We also know that authorities face workforce challenges of their own. Apprenticeships offer us not just the route towards helping young people but also to addressing the requirements of our workforces, helping us deliver those much needed services.

And as we make Total Place a reality our workforces will change. We will increasingly need to configure our services, with our partners, around customers and citizens so that they both achieve more and avoid duplication. Tackling complex issues like worklessness, ageing society, teenage pregnancy and low skills will present us with new challenges and the need for new skills and professions that are resilient. We know we need to invest now in enhancing and retaining capability in areas like social care and children's services. Please use these vacancies and these skills needs to bring on more young people.

Workforces that have the capability to innovate, exploit new technologies, and capitalise on new ways of working to boost productivity will do best. If we don't adopt an approach to investing in skills we are only storing up tougher challenges and harsher times for the future. Whilst we don't think guarantees about job security in the public sector is the role of responsible employers, we are not champing at the bit for job cuts. We know that often public service employers are the biggest employers in their area.

We shouldn't, of course, overlook the many dedicated staff that already work in local government doing excellent jobs. And as leaders you no doubt work to ensure they feel valued, listened to and involved in any changes made to services or delivery. Some of the best opportunities for improving services, and value for money, will come from those on the front lines. I welcome the recent establishment, through the Public Sector Forum, of a new public services workforce innovation group jointly chaired by the Local Government Employers and Unions. I hope this group will help to identify more ways in which, by working differently and smarter, we can give front line workers more flexibility to reduce red tape and bureaucracy, to share experiences of best practice, and to help support more efficient services.

Closing remarks

So tough times and tough decisions are needed from all of us. But one thing I know we can all agree on is that we must continue to invest in skills and people, in ideas and in new ways of getting things done. This is all the more important in times like these.

None of us want to prioritise savings over services. It is, after all, those that use our services that matter most. But in responding to our challenges we must have one eye on the future, and ensure that we have what it takes to face tomorrow's tough decisions by investing in the skills we all need now.

Thank you again for the invitation to speak.