The DTI’s Partnership Fund is a victim of the most fatal of media
disabilities – it is a good news story. It is not regulatory, its red tape is
somewhere between minimal and invisible, and it dispenses public money
judiciously to employers and employee bodies trying to work together better.
Even the Institute of Directors has difficulty painting it as unwarranted state
interference in employment relations.
With the election over, the DTI has three choices about what to do next with
the fund. Alan Johnson, the minister responsible, can close it down, hold
funding at the tiny current level, or build ambitiously on success. He should
choose the third way.
How does the fund work? It has just £5m to allocate over four years to
projects that, in its own words, "Spread best partnership practice more
widely". Bidders can be employers, unions, other employee bodies,
voluntary organisations, Business Links or other agencies. The DTI will give up
to 50 per cent of eligible costs to a maximum of £50,000 per project.
In the two bidding rounds to date, the department has handed out funding to
71 projects. It has helped Pizza Express to establish an employee forum; the
AEEU engineering union has had money to build partnership competences among its
officials; management and union at a fishing tackle maker in Alnwick have
funding for a project to improve productivity; and so on. So why the need for
In the first place, the fund is too small. If the Government is serious
about partnership – and it appears to be – then £5m over four years will make
too little impact on the massive, partnership-free majority of business. And
the impact will be all but invisible in the small and medium-size enterprise
sector, which stays stubbornly immune to most government initiatives.
Secondly, the fund should review its approach to the public services. Given
the public sector’s share of employment, its tally of successful partnership
fund bids looks worryingly small – about 10 per cent. The matched funding
requirement may pose particular problems in a sector plagued by financial
The third pointer to a change is even more ambitious. At present, the fund
is virtuous but unattached. Why not hook it up to other government initiatives
where it could make a contribution? Take forthcoming legislation on information
and consultation. The DTI could open a new funding round for projects designed
to prepare organisations for the new consultation era.
The fund could also spread best practice in the arena of public-private
partnerships. Why not pump some of its knowledge about working partnerships
into PPPs’ ability to deliver better public services?