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London Councils explores the implications of the Comprehensive Spending Review for employment devolution. 

Our proposition to government ahead of the Spending Review (SR15) was that London should be given a comprehensive devolution agreement aimed at raising the employment rate in the capital.In particular, our proposition highlighted two key opportunities to improve services: firstly, the end of the current round of Work Programme contracts; and secondly the roll out of Universal Credit (UC) and the renewal of DWP’s national estates contract.

In response, SR15 provided some clarity on what would follow the current Work Programme when it comes to an end in summer 2017. The government announced a new Work and Health Programme for claimants with health conditions or disabilities and those unemployed for over two years. Significantly the SR15 committed that the government, the boroughs and the Mayor of London will commence detailed discussions on how they can jointly shape every element of the commissioning process for this provision: from strategy to service design, managing provider relationships and reviewing service provision. In addition SR15 confirmed that DWP’s estate will be reformed and reduced by 20 per cent and the number of Jobcentres co-located with local authorities will be expanded. This should be considered within the context of an extension to Jobcentre Plus (JCP) support for 1.3 million additional UC claimants nationally who currently get little or no support, as well as more intensive support for new job seekers for the first three months of their claim, including weekly signings and responsibility to support those clients who would have previously been referred to the Work Programme (those people unemployed for between one and two years). Finally SR15 announced over £115 million of funding for the Joint Work and Health Unit – a cross Whitehall Unit which aims to improve both the employment outcomes for people with health conditions and disabilities and the health outcomes of working age people through active labour market participation. This includes at least £40 million for a health and work innovation fund to pilot new ways to join up across the health and employment systems. The Unit also plans to develop a White Paper on employment and health during 2016.

The SR15 announcements present a significant opportunity to establish new ways of empowering local authorities in relation to the design of employment support services. The specific commitments made to London represent a positive outcome following ongoing work with the department and lobbying efforts. London is currently in discussions with DWP to understand the parameters of devolution deal on employment support. The details of a possible deal will need to be agreed before summer 2016 to allow time for the Work and Health Programme to be commissioned. London will want to consider: 

  • The reduced size of the Work and Health Programme (the Work Programme's successor) and how to ensure this will support London's residents in the best way possible. 
  • Exactly how the DWP understands co-commissioning and ensuring that London's boroughs and sub-regions have the level of influence and input needed to improve the performance of a new programme.
  • The increased number of people that will be accessing Jobcentre Plus services and understanding the best way that the reduction of the JCP estate can be used to improve services through integration and co-location.
  • Ensuring the Work and Health Unit's innovation funding is allocated in a way which adds the most value possible to existing projects as well as working with the Work and Health Programme – as currently it is not clear how the two interventions join up. Ensuring this money is spent strategically will enhance London’s ability to transform services and innovate for unemployed people with health conditions and disabilities.