Kirsty’s thoughts on the impact of Brexit

What a week. The Brexit vote was a seismic shock, the political repercussions of which are still reverberating. It’s impossible to know where we’ll be tomorrow, let alone next month or indeed next year. The political landscape has changed and with it the employment support landscape. We are now living in a world of ‘don’t knows’.

So what little do we know and what do we need to do to ensure that jobseekers are not left behind in a post Brexit world?

Well one thing that we do know is that we’re facing a very real possibility of economic recession. While the initial shock to the market appears to be passing, the long term economic impact could be serious and the consequences for the UK labour market cannot be underestimated.  Large companies may downsize their UK footprint or relocate abroad, potentially taking thousands of jobs with them.  Small and medium sized organisations may well feel nervous, meaning they put off hiring or investing in plant.  In this world employment support will be more important than ever.

Of course the nature of UK employment support services is largely dependent on political will. However, whose will and where that might take us, is difficult to say.  If a General Election were in the autumn, we might see an entirely new direction of travel based on a new manifesto.  Although our best intelligence is that the commitment to halve the disability employment gap will remain, we also know that, in a troubled labour market, those with the most complex needs will be at the back of the queue.  We have to ensure that we do not lose the hard won progress we have made and that the most vulnerable jobseekers are not left behind. 

The Brexit vote has two other large consequences. The first, inevitably, is in relation to EU structural funds.  ESF alone is currently worth £2.5 billion in England, £1.8 billion in Wales, £388 million in Scotland and £429 million in Northern Ireland (2014-2020). Yes, they’re eye watering figures.  In the short term, it looks fairly certain the funding is safe until 2018.  However, all bets are off post that.  Now, the leave campaign said clearly that we pay more into the EU than we get out and thus this money can be replaced.  However, there are no guarantees of that.  ESF is currently ringfenced for social spend. How many competing priorities will there be when this is no longer the case?

But getting this message across is problematic. We are working with a government that is in shock and a civil service with a huge job in front of them.  Much feels to be on hold. The life chances strategy is delayed if not shelved, the long awaited green paper on disability and health is now pushed back to later this year, whilst contracting is delayed. This is bad news for the sector and its staff, who yearn for certainty, and indeed for our jobseekers.

That said, this is not this time to panic. While we live in uncertain times, it is clear that the sector will be much needed in whatever new world will emerge.  ERSA’s job is clear.  First to push and support civil servants and local government officials to continue the business of government – we cannot afford delays in contracting.  (That said, the penny has already dropped in government that the size of the currently planned Work and Health Programme contracts are likely to be woefully too small – not only for the current situation, but if there is an economic downturn.)

But more than this, our job is to make the case clearly and calmly for wider social spending – whether on employment, skills, financial inclusion or community regeneration. Much of this has been fuelled by European money.  As such, the sector must work with local authorities, local enterprise partnerships, charity bodies, housing associations and others to protect the vital spend. 

While Brexit may not be a case study for partnership, in times of difficulty and uncertainty we know we are stronger when we work together. This will be a challenging time for the UK and we have a duty to ensure that unemployed people continue to get the support they need.

Kirsty McHugh is chief executive of the Employment Related Services Association (ERSA)