Why policy matters in the public sector – and beyond

When Chancellor of the Exchequer, George Osborne, delivered his Budget in March, his words and message dominated the media. There is no clearer and more publicised political event – shy of a General Election – that commands so much attention from all quarters and sectors of the country. The significance of his statement for business, local government and indeed the whole of society is self-evident.

But what of the aftermath? For all the major policy announcements covered each year by the Budget, there are countless more that follow; many lost in a torrent of seemingly endless statements and counter-arguments. This can make it all too easy to feel overwhelmed by the sheer volume of publications available from local and central government – as well as from the EU. Given this, many may be tempted to switch off from the political process and assume everything will carry on as normal.

Despite this understandable response, those wishing to know the immediate, medium and long-term direction of the economic and funding landscape in which they operate will benefit from gaining a basic understanding of government policy. But this doesn’t mean that everyone needs a degree in law or economics. An understanding of the key themes and – crucially – the overriding priorities of government, makes a notable difference to understanding how the funding landscape is changing, or will change in the future. That is where POLICYfinder steps in. Its concise yet comprehensive coverage of the major local, national and European policy themes of the day presents a professional policy tool that helps stakeholders equip themselves with a succinct knowledge of the major trends that affect their area, often before the full effects of them are felt.

Using examples of recent policy announcements from POLICYfinder’s vast database, here we illustrate how a simple grasp of the key issues of the day can help clients understand the political and funding landscape and respond appropriately in the short and long term.

Austerity and the Need to Prioritise

At this point we encounter the influence of perhaps the most significant yet controversial political topic of the day: austerity. If Budget 2016 highlighted one thing, it was that the Government’s commitment to pursuing a programme of austerity shows no sign of abating, with the Chancellor announcing £3.5 billion in public spending cuts and warning that “storm clouds are gathering again”. Although debate over austerity’s effectiveness continues, what is certain is that decision-making requires the Government to focus spending on what it deems to be priority areas. To illustrate how one priority can raise the prominence of some topics and push others down the pecking order, it is interesting to observe how a seemingly abstract political topic can have far-reaching impacts throughout society – in this instance: productivity.

The prominence of raising the UK’s productivity on the Government’s agenda was made clear in the Treasury’s July 2015 Fixing the Foundations: Creating a More Prosperous Nation report, in which it identified productivity as “the greatest single determinant of a country’s average wage levels”, bringing about “higher levels of growth, improved living standards and better overall quality of life.” This may seem a somewhat remote concept and one that would have little impact for many. But the Government’s identification of productivity as a core economic priority has a profound impact on policy, dictating the funding priorities for Government in a number of different ways…

From Rhetoric to Reality

For instance, the Government has identified high-level skills as a key driver of productivity. It is therefore focusing on and encouraging the take-up of the so-called STEM subjects of science, technology, engineering and maths to achieve this goal, particularly after its own Project STEM report into young people’s opinions of STEM subjects concluded that “attitudes have to change”. Furthermore, the UK Commission of Employment and Skills’ Reviewing the Requirement for High Level STEM Skills report indicated that increased focus is being placed on initiatives to forge greater links between learning providers and employers, placing university spin-outs and knowledge exchange between public and private institutions high on the agenda.

It is also this approach that acted as a key driver behind the Government’s target to introduce three million apprenticeships by 2020, in order to upskill young workers and raise productivity. This in turn led to the introduction of the Apprenticeship Levy, which will come into force on 1 April 2017 and be set at 0.5% of an employer’s wage bill. Although this will be offset against an initial fund of £15,000 per employer and will only apply to businesses with wage bills of more than £3 million a year, it still represents a sizeable tax for large businesses, and is expected to raise £3 billion a year. The list of reports, policies and strategies arising from this core focus on productivity is lengthy, demonstrating how an early understanding of the Government’s motivations for pursuing such policies allows the many players involved with skills provision or training to tailor their approach – and seize upon new opportunities as, or even before, they arise.

Weathering the Storm

Just as knowledge of Government priorities allows stakeholders to capitalise on new opportunities, so too does it help them prepare for harder times when they find the area in which they operate is less favoured. It is natural that, when a particular topic becomes more prominent in the eyes of Government, so too must some be lowered, and it is here where policy can take on a more controversial – although no less important – aspect. Consider again the issue of productivity, and the focus this placed on STEM. It is not surprising that other subjects might be pushed down the agenda, and this was realised when, while promoting the versatility and usefulness of STEM subjects, Education Minister Nicky Morgan attracted controversy by stating that the traditional view that arts subjects are useful for a range of different types of jobs “couldn’t be further from the truth”.

Beyond the funding landscape, the effects of this approach have been widely felt and publicised. A particularly high-profile issue concerns the cutbacks to public library services. In March 2016, the BBC reported that 8,000 jobs in UK libraries have been lost over the previous six years alone, with 343 closed and a further 111 closures planned in 2016. Yet an equally significant but far-less publicised illustration of just how directly government policy and priorities affects funding can be found in the latest Corporate Plan of Arts Council England, the body that invests public money to support arts and culture across England. In its introduction, the Plan noted that the Arts Council has received a 36% funding cut since 2010, a reduction that has “implications across all (the Council’s) work”. Although it is acknowledged that many local authorities “have worked hard to protect local cultural sectors”, it warns that Government is likely to “reduce further the capacity of many local authorities to support arts and culture and to be effective partners for the Arts Council”. The closure of many libraries and cutbacks to arts funding from local sources are a direct result of such restrictions.

While this touches on another key topic of devolution and the ongoing changes to the way local Government is financed – the implications of which were extensively outlined in this Idox Knowledge Exchange blog – what is crucial here is the fact that tangible, real-life funding implications arise from the philosophy of those in charge. Just looking at one topic alone effectively illustrates how, as one area receives additional focus, particularly in times of austerity, so another loses out.

Knowledge is Empowering

Given how many organisations, institutions and services are affected by this single issue of productivity, it is not difficult to appreciate how austerity and the full range of the Government’s priorities impact on society. From the ongoing prioritisation of the Northern Powerhouse and the academisation of the nation’s schools, to the Government’s commitment to achieving a seven-day NHS; key political trends make their weight felt across all sectors.

But this is no reason for stakeholding organisations or individuals to be overly concerned, nor feel distanced from the political process. On the contrary: recognising such priorities before a policy or funding shift takes effect can make all the difference between being prepared for change or being left behind. Those who keep up-to-date with the prevailing political climate and therefore potential funding challenges before they occur are far better set to weather any potential storms that come their way.

As Europe’s leading provider of funding and policy information, Idox will continue to monitor the evolving UK landscape and offer the latest policy insight via its GRANTfinder and POLICYfinder services. For further details, please email grants.marketing@idoxgroup.com

By Chris Drake, Idox

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