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Digitalising employment services to survive local authority budget cuts

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Local authorities around the country are struggling to meet budget-cut demands. The coronavirus pandemic placed them under significant strain as they stretched to provide PPI to staff and food security to residents. There were also other unforeseen demands on their budgets, all while seeing income from parking services, council tax and business rates drop significantly. 

A BBC investigation found that UK councils face a £3bn black hole in their budgets as they emerge from the pandemic. The Chair of the Local Government Association’s resources board – Labour councillor Sharon Taylor – noted how the pandemic has highlighted an existing funding crisis. It has been brought about by a reduction in central government grants. The fall equates up to 70% over 10 years in some places.

Local authorities are now having to make do with much less, and residents are feeling the impact. According to the BBC, savings will see the threshold for which disabled or elderly individuals can receive care raised, bus services scrapped and children’s centres closed in parts of the UK. Budget recovery following the pandemic will be slow. Ongoing challenges such as an ageing population mean local authorities need to identify long-term solutions to meet budget-cut demands.

Integrated digitalisation

Streamlining digital employment services could enable local authorities to focus efforts on supporting marginalised groups who have been most affected. This would mean digitising both back-end processes and front-end services. It can ease pressure points for staff while making services more accessible to jobseekers. 

The digitalisation of employability services will be key as local authorities and housing associations struggle to provide the same support as they did pre-pandemic, and for an increased number of jobseekers. The integration of technology will also facilitate a multitude of efficiencies in relation to caseload management. It will enable work coaches to provide the same, if not improved, employment support to groups of people that have been most affected by Covid-19 in their respective constituencies. 

Furthermore, digitalising employment support allows jobseekers to access more tools in their own time. It empowers them to take action throughout their jobseeker journeys. This, in turn, means work coaches can use face-to-face and virtual meetings to provide more personable and targeted support to help people to get into long-term employment.

Knowing what people need and how they need to access it will lead to better budget efficiency. It will help make sure that public money is spent in the places where it will have the biggest impact. Digitisation can also show where savings can be made on underused services. 

A National Data Strategy

In September 2020, the government announced a National Data Strategy to put data at the heart of the Covid-19 recovery plan. According to Open Access Government, the idea is for organisations to use data and modern technologies to drive digital transformation, to innovate and boost growth across the economy. The plan proposes an overhaul of data usage across the public sector. It includes a programme to transform the way that data is managed, used and shared internally, as well as with third-party organisations and private citizens.

Nesta’s 2016 Connected Councils report – which set out a vision for councils in 2025 – estimated savings of £14bn for councils where tech is integrated into everything from back-office processes to frontline human-centric services like social care. In a 2017 follow-up to its report, Nesta acknowledged that councils operate in an environment where the risk-reward dynamic is out of kilter. Small failures are punished by media scrutiny and big successes often go unrecognised. In this environment, it is unsurprising that there is still a long way to go to achieve their vision of ‘digital by default’ councils. Other factors, including a lack of digital skills among service users, and the historic management of budget cuts through “incremental change rather than radical reform”, have slowed progress towards Nesta’s hopeful future vision.

Time for change

However, the London Borough of Harrow provides an encouraging example. By making its transactions entirely digital it has saved over £1.5 million. And it is estimated that if all local authorities were to follow suit, they could save £1.8 billion per year.

Has coronavirus provided the “burning platform” that Nesta speculated was necessary to “make tech-driven changes impossible to avoid”? The National Audit Office reports that 94% of county and unitary authority chief finance officers expect to cut service budgets in 2021-22. The figures demand a re-think of how services are provided. Digitalisation provides the most obvious route to providing more accessible, robust and streamlined employment services that allow local authorities to make more efficient use of the funding that they receive in relation to providing employability programmes and training to meet skills gaps in their areas.

Reaching service users

The Guardian reported that almost two-thirds of people who lost their jobs in the UK during the pandemic are under 25. The Learning & Work Institute’s research reveals that 70% of young people expect employers to invest in teaching them digital skills on the job.

However, rather than a barrier, this can be seen as an opportunity. If jobseekers are provided with adequate training to use digital employment services, this will also provide them with increased digital skills. For younger jobseekers, these skills will be simple to pick up. For those in older age brackets, a little more time and resources may be required.

Providing training for jobseekers and staff to use digital services, and making sure that the platforms used to deliver services are easy to navigate, will therefore be essential. But it is worth the effort. If done well, digitalising employment services could boost employment rates

Spending to save

Effective spending on employment services represents significant savings in unemployment support. Given the long-term scarring effects of unemployment, particularly among young people, and the required funding at a local level to overcome these challenges, it is imperative to get the provision of employment services right. This means meeting service users where they are. As the demographics of people experiencing unemployment expands, an increasing number of tech-savvy and millennial jobseekers expect to access employment services online.

Open Government note: These sophisticated consumers demand accessibility and an optimised customer experience via a multitude of platforms. They want access at a time they decide, through whichever vehicle they prefer. Therefore, catering to the modern citizen requires a government which is prepared to serve in a multichannel, 24/7 environment. This can be online, self-service or mobile.

What’s more, the accelerated transition of learning and social activities from in-person to online during the pandemic has altered citizens’ expectations and habits. We are more used than ever to accessing services we need when we need them, and from wherever we are. Being able to fit job searches and employability skills training around other commitments – such as caring responsibilities – is essential to supporting the widest possible spectrum of jobseekers into lasting work.

Taking all this into consideration, transitioning employment services to digital platforms will increase accessibility and improve results, while making more efficient use of public funding.

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