Tuesday, 17 January 2017

Developing citizens for the future

The National Citizen Service (NCS) was launched in 2011. It’s a voluntary personal and social development programme for 15–17 year olds. After criticism at the time of its launch, it is a scheme which has now gathered considerable cross-party support.

Originally designed and implemented by a charity, the scheme has been supported by government funds for the last 5 years. Now, there is a National Citizen Service Bill going through Parliament to put the scheme on a secure footing.

NCS consists of courses for young people in England and Northern Ireland aged 16-17. The courses run for two to four weeks in school holidays, and are based on developing skills, confidence and social action.

Typically, groups of teenagers start with a week-long Outward Bound-type course at a rural activity centre involving physical and team-building activities. After this, they do a residential week, getting a taste of independent living and learning a variety of skills for their future. In the third, and sometimes a fourth, week, the youngsters plan and deliver a project in their local community, often to raise awareness or to fundraise for a particular scheme.

More than 75,000 young people were on the programme last year. It is planned to increase to 300,000 by 2020. They pay £50 towards it, with the rest being met by the taxpayer. More than 200 local organisations are involved in delivering the programme at local level.

I will be supporting the Bill because I think the programmes can play a significant part in developing citizens for the future.
But, as with all such initiatives, we need to be ever-vigilant in the implementation.

First, we must ensure that the scheme is open to everyone and that the most hard-to-reach youngsters – who would probably be those with the most to gain – are actively encouraged to participate. It is worrying that the proportion of NCS graduates who had been in receipt of free school meals has actually fallen since 2011, when it should have been increasing.

Second, the government is proposing a near-30% cut in support for each participant. We must ensure that the quality and breadth of the programme doesn’t fall, and that schemes include young people from diverse communities.

Thirdly, this scheme isn’t and cannot be a substitute for other youth services. The government is forcing massive cuts in local youth services which have engaged so many teenagers previously. That isn’t right.

Never mind Michael Fish…there are storms ahead

Last week, Andy Haldane, the Bank of England’s chief economist said that the failure to predict the global financial crisis was a “Michael Fish” moment for economists. (You may remember that the BBC Weatherman had dismissively rejected suggestions of a hurricane just before the most violent storms of the decade caused many £00m damage across the UK in 1987.)

Prior to the financial crisis in 2007/8, most establishment economists had simply failed to recognise the massive corruption of the sub-prime mortgage industry in the USA and the destruction its inevitable collapse would produce on global financial stability.

Mr Haldane was then questioned about whether, prior to last year’s referendum, the Bank had suggested a much sharper slowdown in the economy than has actually happened – another example of poor forecasting. Since the referendum, GDP growth was at a better-than-expected 0.6% between July and September. Mr Haldane suggested that this was because of consumer confidence and the housing market. He said it was “almost as though the referendum had not taken place” and that people's spending power had not been “materially dented” in 2016.

Mr Haldane then said that there were “reasonable grounds” for thinking 2017 might be a “somewhat more difficult year” for the consumer as the fall in the exchange rate began to affect prices. But he said there was “nothing inevitable” about that – it was just a “best guess”.

I have a nasty feeling that Mr Haldane is actually being far too optimistic in response to Brexiteer sneers and triumphalism.

Let’s just consider some facts (not speculation or forecasting) which ought to really concern us:
  • the value of the pound has fallen about 17% since June 2016. In the short-term this has boosted exports, but will inevitably increase price inflation soon.
  • unsecured consumer credit – which includes credit cards, car loans and second mortgages – grew by 11% last year to nearly £200bn. The last time it was growing at this rate and to this record level was immediately before the crash 2007/8.
  • nearly a million households – one-in-eight of all home-owners in England – are seriously struggling to meet their monthly mortgage payments of more than 35% of their total household income. 97% of those households are of working age and half have children. They have an average income of £25,000 per annum.
  • 4 in 10 adults in the UK have less than £500 (about the average weekly wage before deductions) savings
And then factor in that the government has forced through cuts, in the transfer to Universal Credit, which will see 2.5 million working families hit with an average loss of almost £2,100 a year.

It is very clear that many households are just keeping their heads above water and that even a small downturn could produce a serious deleterious outcome for many people as well as the UK economy.