ePolitix.com Stakeholders comment on how the economic downturn has affected their organisations and sectors.
Stakeholder Response: GoSkills
How the recession has affected GoSkills and the Passenger Transport sector and what steps we think the government needs to take to tackle the economic recession.
GoSkills is partly funded by the government and we augment this funding through commercial and membership activities. We have not yet been affected by the current economic climate, but we are putting measures in place to make sure we remain financially buoyant.
As the Sector Skills Council for Passenger Transport, our footprint covers the bus, coach, rail, aviation, taxi and private hire, driver training, community transport and transport planning industries. Each industry has been affected in differing ways.
The bus industry has so far been largely unaffected. Ridership is increasing , but it not clear whether this is due to the introduction of more free bus passes or whether riders are swapping their cars for the bus or possibly a bit of both. Many operators are still recruiting. Long distance express coach operators should benefit from the downturn in rail use and the perception of rail being expensive. Coach tours in Britain should attract more custom as holidaymakers opt to stay home owing to the drop in the pound's value.
Rail usage has decreased, particularly on commuter routes and on some main lines. Stagecoach, which co-owns Virgin Trains, has reported an overall reduction in passenger miles. London commuter routes in particular are badly affected.
For the first time in 19 years there has been a year on year reduction in the use of airports. Some airlines with leisure traffic to holiday destinations have been affected badly too. However, airlines that run UK domestic business flights e.g. FlyBe have reported no change in passenger numbers to date and are still recruiting.
Taxi and private hire drivers are seeing a reduction of around 30 per cent in fares. However, as this is largely a self employed industry, drivers can work longer hours to subsidise their income. Although private hire drivers in particular have claimed that many are earning less than the minimum wage. There is also pressure on some licensing authorities to stop issuing new licenses until the climate picks up. However, some local authority areas are bucking this trend.
The driver training market is saturated with fewer people taking driving lessons than in previous years. However, some driving instruction schools are still training new instructors with the promise of good earning potential, which is unlikely in the current climate. Against this, in PCV and LGV increased European regulation of professional drivers means more business for specialist trainers.
Community transport has not been badly affected as this is largely operated under contract from local authorities. The transport planning industry has found it difficult to attract new recruits in the past, so the current climate may be an opportunity for public and private sector transport planners to recruit people from different Sectors who have similar skill sets. These new recruits could then be re-trained using the qualifications that the Transport Planning Society (TPS) and GoSkills have developed for people at both fully professional, and technician level.
GoSkills chairs the West Midlands Alliance of Sector Skills Councils, and so we can regularly monitor the effect of the recession on all employers across the economy at regional level. We have a number of opportunities to influence employers in our region through the Alliance of Sector Skills Councils. The Learning and Skills Council (LSC), Advantage West Midlands, CBI and the Chamber of Commerce are doing a lot of positive work in collaboration with SSCs in the region.
GoSkills welcomes the government's £2,500 'golden hello' plan, the New Opportunities White Paper and the 'Re-skilling for Recovery' report. There is definite interest from our employers in our sector who are still recruiting, such as bus companies and some airlines. However, it is difficult to access this funding and our employers are asking us to show them how it works. We would like the government to make its £2,500 scheme in particular, more accessible, perhaps by reducing the waiting time to three months from the current six.
There is a major re-skilling opportunity to get people into the passenger transport sector from other sector where the skill set is comparable. The government's group training initiative could be very useful if utilised effectively. Although having skills won't necessarily stop job losses, it will help to prepare for recovery. Having a well trained, adaptable work force that work in an efficient and effective manner will give every business the best chance of survival. Good customer service skills and usage of new IT and green technologies e.g. safe and fuel efficient driving will also have a positive effect on the bottom line.
Stakeholder Response: Homeless Link
The current economic downturn is having a profound effect on the housing market, with mortgage repossessions in 2008 totalling 40,000 according to the Council for Mortgage lenders.
It is also clear that the downturn is significantly affecting third sector organisations. A survey by the Charity Commission in autumn 2008 found that 38 per cent of charities have been affected by the economic downturn and that 21 per cent of charities that deliver services have seen an increase in demand over the last twelve months.
A similar survey by the Association of Chief Executives of Voluntary Organisations (ACEVO) and Charities Aid Foundation (CAF) (ACEVO – Newsletter, October 2008) found that 72 per cent of ACEVO members are facing rising demands for their services; 71 per cent have seen their costs go up; 30 per cent have seen donations fall and 29 per cent have made redundancies.
Organisations in the homelessness sector are facing similar concerns. A survey by Homeless Link of our member agencies, published in November 2008, found that:
- One third (34 per cent) of all homelessness organisations surveyed had already been affected significantly or very significantly by the 'credit crunch'.
- Almost one third (31 per cent) of respondents (and a slightly higher proportion of respondents in day centres), reported an increase in demand for their service.
- One third of organisations reported that personal donations had been affected (34 per cent), while around one quarter suggested that charitable grants (27 per cent) and income from savings and investments (23 per cent) had suffered over the past 12 months.
- Looking to the future, a majority of respondents said that the 'credit crunch' would have an effect on every aspect of income included in the survey.
- Almost seven out of ten respondents had taken, or would be taking, steps to deal with the impacts of the 'credit crunch'. The steps to be taken included cutbacks in service provision, cost savings (particularly in relation to staffing costs), increased fundraising effort and tighter budgeting.
The survey shows that homelessness organisations expect the 'credit crunch' to have a greater effect on costs and income over the next twelve months than it has already had to date. Latest soundings from member agencies also suggest that they expect demand for services to continue rising.
Homeless Link is therefore calling for early action to be taken to maintain levels of homelessness service provision during this economic downturn.
Click here for a copy of the Credit Crunch Survey.
Stakeholder Response: Wise Group
As an organisation that views work as a fundamental means to end poverty, The Wise Group is at the forefront of helping individuals and communities withstand the impact of the recession. To this end, we deliver a range of employability services such as:
- Pre-employment/early intervention
- Training
- Work-based experience/Intermediate labour market projects
- Government and other contractual employment programmes
- Post-employment support projects
We are also developing a suite of innovative packages that reflect both local conditions and our comparative advantage in working with individuals who are at a disadvantage in the labour market. We hope the government will actively consider and empower organisations to deliver creative and innovative work solutions which can be rolled out quickly to maximise their benefit for our client groups.
It has been our experience that while we there has been an increase in the number of clients seeking our help, the job opportunities available for our clients are drying up. For example, for the period December 2008 to February 2009 we have seen a 33 per cent increase in our client numbers compared to the previous year. Placing this growing client group into work is difficult in a context of fewer job vacancies – in Glasgow, there are eight applicants for each job vacancy (Scottish Trade Union Congress cited in Crichton 2009). As a consequence, our Employment Consultants report that the number of vacancies has fallen, with competition for those that remain becoming more intense.
A result of this competition for work is that those jobseekers that face barriers to work are even more disadvantaged relative to individuals with recent work experience. With high numbers of potential recruits to choose from, employers who may have been willing to employ people with little recent work experience, who are lone parents or have a history of offending are going to be hesitant in taking on these individuals.
Government Action Required
This highlights the need for concerted action to ensure that the impact of the recession is minimised. Without serious effort to support those who are already at greatest disadvantage in the labour market, the 'scarring' effect of unemployment (in terms of future earnings and negative health and social impacts) will be even more deleterious.
As an organisation with more than 25 years experience in helping people into work, we recommend that the government:
- Target intervention to address the complex barriers that the most disadvantaged face in seeking work.
- Ensure the benefits system creates real incentives to work and progression in work.
- Provides assistance for those who are unemployed to meet overlapping needs (such as problematic family circumstances, lack of access to public transport or insufficient skills). Third Sector organisations are often best placed to provide this individualised support.
- Remove systemic barriers to work (such as unreliable transport and insufficient childcare that matches work patterns).
- Provide employers with incentives to take on those further from the labour market (for example, funding to support employees with physical and mental disabilities and assistance to provide in-work training to hasten skill acquisition and job readiness).
- Ensure that training and education reflects local economic structures.
- Deliver training that incorporates development of 'soft skills' such as self-confidence, team work, interpersonal skills, communication skills, ability to work independently or in a team, and literacy and numeracy skills. Entry-level roles focus more on such soft skills: while training can increase employability, individual characteristics are invariably more important in securing work for those who have been out of the labour market for some time (Snape, Dawn, 1998; Coleman Nick, et al, 2007, Newton, Becci, et al 2005).
- Address basic skill deficits – adults with literacy and numeracy problems face increasing difficulties in gaining and then maintaining employment (National Research and Development Centre for Adult Literacy and Numeracy, 2005).
- Creatively recognise transferable skills: despite periods of unemployment, many claimants have gained relevant skills such as caring, child minding, befriending, and hospitality.
