Buying Quality Performance

The economic impact of Covid-19 will include a significant rise in unemployment. Recovery from the spike in unemployment will be slow, meaning the unemployment becomes long-term. One of the lessons from employment programmes around the world is that distance from work increases over time – the longer someone is unemployed, the harder it becomes to get them into work. The impact is always hardest on the young. A second important lesson is that unemployment increases social exclusion and can lead to social disintegration – and this will come at a time when social fabric is already under stress. ‘Public works programmes’ are a typical response in developing countries (similar in part to Roosevelt’s New Deal).

The slowdown in economic activity will mean less employment, as retail closes, transport empties, restaurants and pubs shut, people stop buying and the ripples continue outwards. People on zero hours contracts will feel it first, of course. Employers will attempt to hold on to permanent staff, but it will not be long before the redundancies start in earnest.

Retail, distribution, hotels and restaurants in the UK together make up over 20% of our workforce. Manufacturing, transport and communications are another 18%. If we lose just 10% of the jobs, this will mean 3.3 million fewer people are employed. To put this in further context, there are currently 1.3 million people registered as unemployed in the UK today.

The same threat is of course echoed around the world. Of the 12 million people employed in Australia, nearly 80% work in the service industry, including around 1 million in tourism alone. Tourism and hospitality is the fifth largest sector in America, with hospitality as the fastest growing sector (until now).

If we want to speed up the eventual economic recovery, we have to keep people as close to work as possible in the interim. If we want to minimise the risks of social disintegration, we have to find ways to maintain social inclusion.

At the same time, many of our older citizens will be withdrawing from social contact involving physical proximity to others. Other vulnerable citizens will also withdraw. By their very nature, these groups may lack the resources to manage this isolation positively. It will not always be the case, but they are less likely to have family or other support networks. They are less likely to know how to access any public services targeted towards them or be able to reach local voluntary sector provision.

The vital need to reduce ‘work distancing’, and also to mitigate the wider risks of social distancing, can be combined in a single solution. Such a response has to be structured and systematic. The impact of this will be just as important as any quantitative easing, possibly more so given that it will be closely directed at need.

Governments must initiate, as a matter of urgency, a Social New Deal. This will be along the lines of the public works programmes under Roosevelt’s depression-era New Deal. In delivery terms, it is not a complex model, but extends support to people at risk – a sort of extended version of the ‘floating support’ that I am chairing in the Kirklees Better Outcomes Partnership (which is actually funded on the basis of social outcomes achieved):

• A national Civil Society Force will be established, employing people at the national minimum wage for 20 hours a week;
• It will be nationally coordinated but work locally through networks of local charities;
• Its first task will be to put in place a comprehensive response service and to ensure there is widespread awareness, particularly among local citizens who may be or become vulnerable;
• The sort of services provided will include shopping and deliveries for the house-bound, plus advice and guidance on how to access other assistance;
• The precise package should be locally defined and follow identified need but might also include decorating outside/shared spaces (such as communal areas in blocks of flats) or gardening;
• Local food supplies will be supplemented by the Civil Society Force working with local farmers or taking over public land to grow vegetables to distribute to the isolated;
• It will also develop a ‘tele socialisation’ service, whereby isolated people are spoken to on a daily basis and encouraged to join conference calls for group interaction (distributing phones and funding calls where necessary);
• Through its delivery and identification of the emerging local/individual needs, the Force will be able to inform national planning.

This programme could be up and running within three months. The likely cost in the UK is £1 billion per month, for each 1.2 million people employed. This does not take account of the saving there will be in Universal Credit or other welfare payments, which could amount to at least half of this just in the short-term. The workers in the Civil Society Force will also spend their earnings, including paying their mortgages or rent and household bills.

The Civil Society Force will keep people working, albeit in public works, maintaining their proximity to employment. This will mean a much better prepared, motivated supply of labour is available once the economic upturn comes, which will speed further recovery. Since they are working, they are less likely to become socially excluded. With their work focused on addressing the needs of vulnerable people in each locality, this will enhance community spirit. It will maintain the social binding that is essential for our physical, mental and economic wellbeing at the level of the individual and wider society.