Following the Chancellor’s announcement, Nick C Jones highlights some of the implications of the Autumn Statement 2013 for young people.
Government and Public Sector Leader, PwC
Email Paul Cleal
Following the Chancellor’s announcement, Nick C Jones highlights some of the implications of the Autumn Statement 2013 for young people.
Government and Public Sector Leader, PwC
Email Paul Cleal
Although a chill wind still whistles through the public sector as fiscal austerity is set to continue deep into the next Parliament, with additional spending cuts of [£1bn], the return to growth has at last brought some Christmas cheer this year.
And one of the bright spots from the Chancellor’s Autumn Statement 2013 was his announcements to help young people, from both a demand and supply side.
On the demand side, the Autumn Statement sets out the intention to abolish employer National Insurance Contributions (NICs) for under-21 year olds earning less than £813 a week (equivalent to the point at which higher rate tax is charged). This will make it cheaper for businesses to employ young people, and be of particular help to Small and Medium-sized Enterprises.
On the supply side, removing the cap on higher education student numbers from 2015/16 increases the opportunities for those pursuing a more academic pathway. And adding 20,000 Higher Apprenticeships provides a welcome boost for those seeking a vocational route into the world of work. Both measures taken together increase the opportunities for our young people to get the skills they need to get a job.
But will these all be good jobs? As we know, many of the jobs created in the recent past have been part-time or on zero hours contracts. While these in themselves are not necessarily bad jobs, and may suit the circumstances of some people with other responsibilities, for many they will not generate either the income or the career prospects needed for a sustainable future.
Good growth needs good jobs, and here it’s still not clear that progress is being made, particularly for those in-work poor who are trying to climb the ladder. On a broader canvas, this impacts on the prospects for greater social mobility.
Other key stepping stones to a brighter future are the creation of demand-led skills provision and empowering individuals to make well-informed job and career choices. To do this we need to be improving the availability of good quality information and transforming the role of Jobcentre Plus as a broker of people to jobs, particularly the young.
A demand-driven skills system, allied to value-adding infrastructure and a self-sustaining innovation ecosystem, can support UK plc create more good jobs which should be at the heart of the purpose and mission of our public bodies.
With the NHS facing more uncertainty today than at any previous point in its 65 year history, as highlighted in our report "NHS@75", radical change is needed across the whole healthcare system. Against this backdrop, the role of the audit committee in helping oversee the management of risk and adapt to change is more critical, and more difficult, than ever.
Audit committees exist to oversee compliance, resources and risk across the NHS. They ensure the existence of effective internal control arrangements, integrity in corporate reporting and an independent check on executive management. They set the right tone and encourage a balanced and proportionate response to risk. They can also be a catalyst for a more joined-up response to risk between healthcare commissioners and providers, as part of the move to integrating care.
Structural reform, along with rising demand from changing demographics, tightening budgets and increased scrutiny following high-profile failures in care, means that audit committees need to make a step change in their remit.
‘Greater risks, wider responsibilities’, our survey of audit committee chairs in the NHS, shows that many NHS audit committees recognise that their organisations are changing rapidly and they must change too.
But our research with over 30 NHS audit committees suggests that not all committees have the capabilities or capacity to tackle these new challenges, focusing instead on the areas of financial oversight where they feel most comfortable. To overcome these gaps in essential skills and knowledge, audit committees need to move beyond their traditional speciality of finance alone. Members need to engage more with clinical staff, relevant IT professionals and other stakeholders in order to gain a better understanding of the wider risks their organisations face.
Over half of the committee chairs we surveyed are unclear about who has responsibility for overseeing risk arrangements within their organisation. There is a pressing need for greater communication between audit committees and NHS boards of directors to define responsibilities.
While financial management must remain a high priority, embracing a wider risk agenda, including clinical standards and data security, is critical to an effective audit committee. Given the rapidly changing NHS landscape, NHS audit committees need to identify poor practice, raise the overall quality of governance and become true standard bearers for risk management, so as to achieve the wider objective of delivering high quality care.
On the back of the launch of our recent reports on good growth and how to achieve it, I’ve been lucky enough to have spent time on the road discussing our findings with a range of council leaders, LEP representatives, businesses, universities and colleges amongst others. And perhaps what’s most noticeable is the degree of agreement across such a diverse range of stakeholders and cities.
The first thing that strikes me is how robust the public’s view of good growth has been when held up to challenge. The UK public believes there is a wide scorecard of factors beyond GDP which can be used to measure economic wellbeing in a place, and many of the people with whom we’ve engaged agreed! Jobs, income, health and skills along with infrastructure are all important factors.
In turn, achieving good growth is all about making choices, focusing on the things that matter most to the public and to the businesses that provide the jobs and income essential to prosperity. And again, there’s widespread agreement - infrastructure, innovation and skills are particularly highly rated common priorities.
But whether a city scores highly or not in the Demos-PwC Good Growth Index, some further common themes have arisen in discussing the implications of our work.
Firstly, the importance of having a sense of ownership of a place. Whether you’re a resident, a business, a politician, an official or an educator, the thing that shines through is the importance of pride in a place, built on a shared vision of the future which inspires and motivates. Everyone wants local prosperity, with opportunity for all to share in it.
But in an increasingly mobile and connected world, the strengths of a city need to be projected far and wide so that it attracts new businesses and talent. This requires the brand of a place to express clearly a shared identity and set of values. It is so important to be able to tell a compelling story about a place, whether this is rooted in quality of life, a sector specialism such as agritech or marine technology, or a wider capability such as digital.
Secondly, collaboration has been perhaps the most repeated word in my meetings. Collaboration across a place is a key ingredient for success. This includes across the public sector (including councils and the Local Enterprise Partnerships), business and academia as well as non-governmental organisations and the public, all of which have a role to proactively engage in shaping and delivering the growth plans of a place.
Thirdly, access to talent remains critical. A demand driven skills system is essential, with business and education working collaboratively (there’s that word again!) to develop the skills that an area needs, not just now but to provide a solid foundation for the future. And supported by efforts to incentivise those who learn and develop in a location to stay and reinvest their human capital in a place.
All of the cities I have visited have stories to tell about how great their place is, or could be. What makes the difference is those able to project their city brands in ways which are attractive to residents, businesses and investors. In turn, they are able to address the two key questions which emerged from our launch events this time last year: what do we want our place to be known for, and who exactly do we want to attract and retain (from businesses to home grown talent)?
Above all real leadership is needed across a place, inspiring local stakeholders and telling the outside world the reasons why a city is such a great place to live and work!
Job satisfaction is in the eye of the beholder. This was perhaps the most obvious takeaway from the round table we hosted with Demos and CIPD on why satisfaction in the work place matters, both to increase productivity and deliver good growth.
But scratch beneath this and a number of fascinating insights emerged from the first in a series of three roundtable events on Good Jobs with Demos, bringing together employers, professional bodies, think tanks, social enterprise organisations and academics.
Perhaps of most interest was the issue of how to get the best out of people in their jobs, given the connection between workplace satisfaction and productivity. People need to see purpose in their work and how they add value, whether that be as a florist or gardener - two occupations with the happiest workers according to a City and Guilds study published last year - or as an IT specialist or a banker - occupations with apparently the least happy workers.
The opportunity to use and develop skills was also considered by participants as integral to job satisfaction. There is of course much evidence on the importance of skills to growth. But skills-mismatch can also lead to a lack of engagement and low levels of job satisfaction, for instance, as can be seen where graduates have been unable to find work commensurate with their skills.
There can also be a lack of clarity on the pathways into employment. A better partnership between education and industry could help while high-quality careers advice from a young age, together with greater engagement from employers in schools and universities, may help young people make better informed decisions from an early age.
Of course, this is not all a supply side issue. Participants commented on the need to stimulate the demand for higher skills and develop a clear business-led strategy on skills policy. In addition, increased and more regular training and re-training were discussed to help those wanting to advance from lower-skilled, lower-paid employment or for those re-entering the labour market as well as older workers wanting to extend their working lives.
At a time of increasing job market polarisation, with the emergence according to some of an ‘hour glass’ economy, we also kept coming back to pay as a key determinant of job satisfaction, with a decent income providing individuals with security and comfort. Flexibility was also important, with employees wanting to work less conventional hours to create time for other commitments, such as caring for family or friends.
But our discussants did not believe that high pay alone would equate to greater fulfilment in the workplace, with some pointing to higher levels of stress in some high paid jobs. The way in which society attributes value or status to different jobs – conventionally measured by earnings – was called into question, with participants recognising a difference in the perception of whether a job is skilled or unskilled inside and outside organisations. For instance, in care satisfaction with a job comes from intrinsic value – achieving outcomes and the respect of your family and friends, irrespective of the perceptions of others.
A disconnect between employees and management was also cited as a potential contributor to low levels of job satisfaction. But how do managers and leaders of teams and organisations really get to know the needs and motivations of their staff? Indeed, what is the role of the manager in today’s workplace? And how does job design incorporate the behavioural elements of a job that are needed to maximise productivity?
Good practice does exist – in some high profile retail businesses a high proportion of managers are promoted internally, fostering greater understanding between grades. And it was clear from the brand defining businesses at our round table that aspiration is important and that progression needs to be available to all so that there is a clear pathway from the shop floor to the boardroom, for those who want it.
We look forward to our second round table which will build on this theme of progression as we look at the connection between good jobs and social mobility.
Primary care in the UK, and general practice in particular, is internationally regarded among the best in the world. But at 65 years old, the health service is under unprecedented pressure, so GPs don’t have much time to rest on their laurels. The outlook for the NHS over the next ten years, as outlined in our report "NHS@75", demands radical change in how we think about and deliver care. Rather than shying away from transformational change, a GP-led renewal of primary care must be at the heart of the vision for the NHS in 2023.
The overwhelming majority of people’s interactions with the health service are with primary care: general practice accounts for 90% of activity, although only 8% of the NHS budget. Being local and often personal, the relationship between patients and GPs is highly valued, as recognised by the recent announcement on assigned GPs for the over 75s. But changing demographics and tightening budgets threaten to overwhelm the current model and make it unsustainable. The challenge for primary care is to find the sufficient scale to innovate, while holding on to the best aspects of today’s model.
The current primary care model provides a strong foundation for GPs to be pivotal in delivering integrated care through a collaborative model, reversing the recent trend of practices increasingly losing touch with the extended primary care team.
International examples point to common factors of success that primary care in Britain could look to. For example, the GP-owned Midlands Health Network in New Zealand brings together 100 GP practices, serving a population of 500,000 people. Together the GPs are able to collectively and strategically plan the future provision of primary care services, at a scale that would be very difficult to achieve at the individual GP level. GPs now form the hub of a network of integrated primary care provision, linking social care, mental health and elderly care professionals along with public health promotion services, with benefits for both patients and the GPs themselves.
Closer to home, a ‘super’ partnership has been created bringing together GPs in Sandwell and Birmingham, who are pioneering an integrated care programme with the help of other care professionals.
While we can look to examples of good practice, this is not about creating a perfect blueprint for primary care that will be rolled out from the centre. Rather there is a need to provide vehicles that can support primary care to innovate and develop from the frontline up.
Where practices do try and merge together or create solutions around local issues, they often find statutory stumbling blocks in their way that disable rather than support innovation. Instead, a principle of ‘general power of competence’ should apply, as long as solutions are in the interest of improving outcomes. Clinical commissioning groups, although not direct commissioners of primary care, can also play an influential role, working with their Area Teams to help enable a renewed outlook for general practice.
More specific support GPs might need could include technical expertise, for example on organisational design, legal advice and estate management, as well as support on cultural issues associated with new ways of working.
The future NHS relies on having thriving primary care at its heart. The case for change has been made, now is the time to take action.
A version of this blog first appeared in the HSJ.
There have been encouraging signs recently that the UK economy is picking up, but there is some way to go yet before the recovery becomes fully sustainable. Fiscal austerity will still need to continue well into the next Parliament. Continued growth, further job creation and the associated tax revenues will be critical both to paying down our debts as well as funding our public services.
And cities have a key role to play in this drive to achieve sustainable long term growth and so reduce the structural deficit. But how do we define economic success at city level?
To address this question in the context of the government’s localism agenda and a wider drive to decentralise and rebalance the economy, we have updated our analysis from last year to produce a second edition of Good growth for cities: a report on urban wellbeing from PwC and Demos.
In this research, we measure the performance of the UK’s largest cities against a basket of ten categories defined by the public and business as key to economic success. Jobs, income, health and skills are deemed most important and are fundamental to living standards. Housing, transport, work-life balance, income distribution, sector balance and the environment are also considered of importance.
Using these measures, the table below shows the highest and lowest ranking cities in our index based on the latest available data.
Some of the UK’s medium-sized regional cities including Reading, Aberdeen, Preston, Southampton and Belfast, rank higher than the ‘usual suspects’ when measured by GVA – big cities like London, Birmingham, Leeds and Manchester. In contrast, the largest cities face major challenges with transport congestion, housing affordability, income inequality and other quality of life indicators.
London’s performance stands out. While it is a popular and leading international business centre and notwithstanding the highest income levels in the country, when measured against the wider range of publicly defined ‘good growth’ criteria such as affordable housing, transport, and working hours, it slips below the UK overall average for ‘good growth’.
We also find jobs are a key factor where cities rose or fell in the 2013 index, highlighting the importance of innovation to drive productivity and new job creation. Better skills are also important so that people can take up opportunities available. In addition, better infrastructure is needed with which to connect, and house, people in the places where jobs are located.
The challenge for public sector organisations in all our cities is to create a platform for growth by focusing on these key levers of skills, infrastructure and innovation.
The government is committed to strengthening ‘corporate functional
leadership’ across the Civil Service. This means the cross Whitehall management
of key functions such as human resources, finance and legal services.
We’ve recently seen a key move in this direction earlier in the autumn with a new central government communication service. And further reform in this direction was nodded to in this summer’s Civil Service Reform Plan: One Year On, which stressed the importance of a more united civil service.
We know from our own experience that this kind of transformation isn’t easy and takes time – so why make the change at all across Whitehall?
Some of the benefits on offer include efficiencies, of course, and economies of scale (particularly welcome in an age of fiscal austerity). But beyond cost saving there are also greater opportunities for professional development and further resilience when times are tough and Whitehall needs to act flexibly and with agility.
As noted at our recent event on this topic, with the Institute for Government, political buy in is key, particularly at in local government where cross boundary collaboration can mean straddling political allegiances.
The reforms to Scottish government during the 2000s, led by Sir John Elvidge provides an interesting example of a move towards ‘functional leadership’ (Read more about this from the Institute for Government here) A common sense of purpose and shared objectives can really make the difference between the success and failure of these reforms.
This starting point led to a move towards government as a single organisation, disbanding individual departments. They started at the top with the leaders of these departments re-designing their own roles. This prompts the question, if Whitehall were to start with a blank piece of paper, what could it look like - to deliver affordable government at a time of increasing demand? Would the outcomes sought match the structure of the civil service as it exists today?
Such radical change requires united leadership but also culture change across the civil service. And this means investing in young emerging talent to drive change and develop new behaviours.
It’s clear that such change requires commitment over a number of years and a clear plan of action. And with the next general election approaching, time is running out. The question of how to build cross-party consensus on the future shape of Whitehall looms – to provide the stability to see through major transformation and rethink Whitehall as we know it.
For a video of our recent event on this theme, with the Institute for Government, click here.
The past 12 months have seen an important shift in the balance of responses being considered and pursued by local authorities to address the austerity measures adopted by the government. The early years of austerity have been characterised by local authorities taking action to reduce costs through a range of ‘supply side’ measures. Local government has been very successful in this; in fact the ability of councils to make deep efficiency savings without causing major upheaval in the delivery of services has been remarkable.
But, with demand for services growing and austerity measures set to continue until at least 2016 (and probably far beyond that), a new approach to transformation is emerging. Local government needs to raise its sights, to shift from just doing the same things differently to transforming what its purpose is and, by extension, what it does.
Local public services need to be viewed in a much more holistic and systemic way - narrow operational silos will be an unaffordable luxury - with a focus on how multiple organisations and citizens themselves can contribute to securing desired outcomes.
Approaches need to be about pursuing the right outcomes, irrespective of delivery method; developing the right strategic, partnership and decision-making models, irrespective of ideology; and embedding the right techniques, competencies and disciplines for measuring success, irrespective of prior skills or background.
This new landscape will require fundamentally different organisational cultures and behaviours to make it successful, along with an intense focus on digital innovation and intelligent and insightful data collection and management.
The next few years will see a fundamental re-imagining of the role and scope of local government, with authorities increasingly needing to:
Through a combination of these activities, there is a real opportunity for councils to improve the outcomes they, and their partners, can achieve with ever scarcer resources.
A version of this blog first appeared in LGC.
On Monday 28th October the St Jude storm meant transport frustration for many, and a sneaky lie-in for some. But undeterred by everything the weather could throw at us, five PwC Apprentices and three of our Employer Ownership of Skills Consulting team set off for the BMW Mini Plant near Oxford for an apprenticeships launch event -with the rumour of the chance of meeting the Prime Minister.
Organised by the Department for Education and BIS, the event was attended by Apprentices and their employers from a huge range of industries, including manufacturing, financial services and the care sector. We were there to represent PwC’s Higher Apprenticeships Programme, which we both joined in the Consulting stream just three weeks ago.
A new set of apprenticeships standards was being announced that day, and the event kicked off with a Q&A session - with the Prime Minister! This was followed by a networking fair where we had a stand to tell people about PwC’s own Higher Apprenticeships routes into Audit, Tax and Consulting, as well as the work our Consulting team has been doing designing and delivering a broad professional services apprenticeships framework, managing funding and sourcing high quality training for our clients. Then there was another Q&A session with a panel including Skills Minister Matthew Hancock and Employment Minister Esther McVey.
We were each attracted to the Apprenticeship route for our own reasons. When it came to choosing which employer and which apprenticeship, it was fairly easy for us both to settle on PwC. The structured framework in place at PwC and the clear career progression path after completing the apprenticeship programme were major factors. This gave the impression that we would be treated as valuable members of a larger team – something we have found to be true since starting.
Monday’s Apprenticeship event has been one of the highlights so far in our short careers. It was great to have the chance to talk with such senior members of Government and hear about their plans for apprenticeships. We came away feeling more confident that apprenticeships will be increasingly recognised as a credible alternative to going to university. We enjoyed telling others about the choices we made and why.
It’s good that the Government has responded to a recent review into apprenticeships by introducing tougher standards. But more also needs to be done to promote the range of apprenticeships available and the opportunities they offer young people. When you’re making important decisions about what to do after school, knowing what those who will ultimately be employing you want is important. Better careers advice would be a good place to start. Schools need to be informed more so they can encourage and guide students along the right path for them as individuals.
Applications for next year’s Higher Apprenticeship places at PwC are now open, so we’d suggest that those who think this opportunity may also be right for them apply early so they don’t miss out.
About the bloggers
Hannah has just started PwC's Management Consulting Higher Apprenticeship programme. She has recently completed her A levels and will spend her first eight months with PwC on our Employer Ownership of Skills Consulting programme. The promotion of different career paths after school is something that Hannah is keen to help develop further.
Nkem is on PwC’s Management Consulting Higher Apprenticeship programme. A recent Law graduate, he enjoys working with people to solve complex problems. Nkem will spend his first eight months at PwC as part of our Consulting Learning and Development team where he hopes to gain a solid understanding of how the business works.