Don’t believe the hype

9th July 2020

As we have been sharing with clients for a few months, the statement from the Chancellor yesterday confirmed the government’s focus on using existing contracted provision; stimulating demand; sector specific interventions and a focus on young people. We believe that a number of these schemes are only likely to provide short-term relief and, much like the job retention scheme, may only be pushing the problem further down the road. Similarly the effectiveness of wage subsidies is yet to be proven.

There has been, unsurprisingly, much clamour amongst prospective beneficiaries for government investment in large scale active labour market intervention, be it Work Programme 3.0, or whatever the latest fashion for naming things is. 

We remain unconvinced this will happen at a scale seen previously. Levels of trust; cost/benefit concerns; previous performance; ‘bad news’ stories; commercial capacity to procure – these factors are conspiring to limit the scale/scope of contracted provision. Larger programmes will only be commissioned if the recession is longer and deeper than most forecasters are currently predicting. So yes there’s a framework, yes some new targeted provision will be released through 2020/1, but these will not be big bang opportunities. The largest opportunities in the pipeline will continue to be on the health and disability assessment side of the house.