When governments act in haste, there’s more chance of policy errors occurring

There are some government policies that no matter what angle they are viewed from do not seem to make sense, writes Anthony Painter.

There are some government policies that no matter what angle they are viewed from do not seem to make sense. Such is the illogic of a negotiated government process where one department’s policy approach has consequences for another that aren’t always clear. This afflicts all governments and is a coordination issue and an outcomes issue. All that can be said is when you make decisions in haste, there is an increased chance of such policy errors occurring.

Such an outcome can be observed in the case of skills and further education funding:

• The Department for Work and Pensions is determined to focus the resources of government on those in receipt of ‘active’ benefits (e.g. Jobseeker’s Allowance) and away from those who receive ‘inactive’ benefits (e.g. Income Support for Lone Parents);

• The Department for Business Innovation and Skills has interpreted this as meaning that college fees for those on ‘inactive’ benefits should no longer be covered.

The problem with this is that, not only will this hit some of those who are currently distant from the jobs market who could benefit from upskilling to bring them closer to getting a job and off benefits, but it could also financially destabilise a number of colleges. Those colleges in inner city areas with large numbers of the population on ‘inactive’ work benefits will particularly suffer.

This may come over as special pleading. Get in the queue with other worthy causes trying to protect themselves in the age of austerity. There’s the queue: schools, Sure Start, local authorities, the voluntary sector, and the police are already there. But this case is different. The policy doesn’t actually save HM Treasury any money whatsoever.

Let me explain why.

Further education is mainly funded by an annual grant for which it has to deliver a certain number of learning hours to students. If you over-deliver then that’s tough – you’ve provided a service for which you will not be paid. If you under-deliver, however, then your grant gets clawed back. So you lose money in year. And then the following year your grant is also cut; it’s like having a car crash – you have to pay your excess and then your premiums go up except it’s a penalty rather than a cost.

In areas with a high concentration of those on ‘inactive’ benefits it will be difficult to recruit enough students for those colleges to hit their targets. And then the grant will be clawed back. What this means is that there will be an underspend. This is expenditure that has been agreed and is designed to improve participation rates in education at all ages. And it just won’t be spent or will be spent in a spasm of desperation once the issue has been identified. In the process, colleges will be financially destabilised which will hamper their focus on getting the right outcomes for the students they have recruited.

Nowhere is the impact of this (costly) anomaly clearer than in the case of English for speakers of other languages (ESOL). Today, the Association of Colleges has published data which shows that 11 per cent of all college provision for adults is in improving the English language skills of those who need to improve in order to integrate further.

Fifty three per cent of those on ESOL courses are defined as being in receipt of ‘inactive’ benefits; many of these are the spouses of migrant workers on very low pay. Seventy four per cent of those ESOL students on ‘inactive’ benefits are women.

In his Munch speech, the prime minister said:

“Each of us in our own countries must be unambiguous and hard-nosed about this defence of our liberty. There are practical things we can do as well. That includes making sure immigrants speak the language of their new home.”

The interpretation of the policy on prioritising active over inactive benefit recipients is harming David Cameron’s reach for a renewed policy of integration. It doesn’t just prioritise those closest to the labour market – it also unnecessarily penalises those who are a distance away. Not only does it destabilise colleges financially and operationally, it doesn’t save the Government a single penny. By all means prioritise certain groups but don’t underspend on already very tight budgets. That’s perverse.

Luckily, this seems to be a policy co-ordination and outcome error. It can be resolved without costing a penny. To fail to do so would be deeply damaging to skills, work, participation, and cultural integration. It’s a no-brainer, isn’t it?

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