working brief Future Jobs solutions for social justice The new programme needs to draw on the lessons from previous ones, argues Dave Simmonds 3-4

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1 ISSUE 204 MAY 2009 working brief solutions for social justice Future Jobs The new programme needs to draw on the lessons from previous ones, argues Dave Simmonds 3-4 How is Jobcentre Plus coping with recession? 5-6 The rapid rise in claimants took Jobcentre Plus by surprise. Paul Bivand looks at how it coped Ambition 2020: achieving world class skills 13 Rosanna Singler highlights a new report from the UK Commission for Employment and Skills The end of the beginning? 7-9 Paul Bivand examines whether we are through the worst in terms of accelerating increases in unemployment Future Jobs Fund The DWP has issued guidance notes for bidders to support the Future Jobs Fund Bid Document DWP commissioning Damon Gibbons points out that DWP activity is not limited to Flexible New Deal Activating States Staff views and practices in delivering welfare to work Labour statistics Unemployment sees the largest quarterly rise since Lovedeep Vaid reviews this month s statistics Policy and research informing practice

2 2 working brief MAY 2009 ISSN Working Brief is published ten times a year by the Centre for Economic & Social Inclusion and is available by annual subscription. Rates: 85 private sector 75 public sector and academic institutions 50 charity, voluntary sector and not-for-profit Full Inclusion Subscription rates private sector public sector and academic institutions charity, voluntary sector and not-for-profit Editor: Polly Green Production Editor: Stuart King Printed on recycled paper by: RAP Spiderweb Ltd, Commercial Centre, Clowes Street, Hollinwood, Oldham OL9 7LY Advertising in Working Brief We offer a full range of advertising inside the magazine, in full colour or mono. Inserts or flyers are also accepted. For a faster turnaround, consider advertising in our weekly e-briefing. Advertising in Working Brief provides targeted access to decision-makers in welfare to work and social inclusion. For further information on rates, please call us on The Centre for Economic & Social Inclusion is a company limited by guarantee. Registered in England and Wales number Registered address: 89 Albert Embankment, London SE1 7TP Working Brief in-depth debate and analysis In this issue of Working Brief Dave Simmonds looks at the Future Jobs Fund and discusses lessons learned from previous programmes. Describing the effect of the recession on the claimant count, Paul Bivand looks at how Jobcentre Plus coped with the rapid rise in claimants, and asks whether the additional resources allocated in the budget are sufficient. This month, the UK Commission for Employment and Skills launches its Ambition 2020 report, which assesses the progress the UK has made towards becoming a world leader in skills, employment and productivity by Rosanna Singler summarises the main points of the report, detailing five key priorities the UKCES has outlined for the next five years. While Lovedeep Vaid details this month s labour market statistics, showing the biggest rise in unemployment since 1981, Paul Bivand asks whether this is the end of the beginning of the downturn, in terms of accelerating increases in unemployment. Siobhan O Sullivan, from Melbourne University, was based at Inclusion s offices last year to carry out research into UK welfare to work frontline staff s views and practices as part of a multi-national study. In this issue she explains early findings from the UK. Despite the delay in decisions about contracts for the first phase of the Flexible New Deal and the lack of announcements about the start of the commissioning process for Phase 2, it would be wrong to think that DWP commissioning activity has stalled. Damon Gibbons reports on what s happening. At Inclusion preparations for our annual UK Welfare to Work Convention are in full swing. The convention is the premier annual event for all those involved in support and advice to people who are out of work. As many of you know, each year over 1,000 delegates from across the UK gather to hear the latest developments and best practice case studies. We look forward to seeing you there. The next edition of Working Brief will be our convention issue, where key stakeholders will look at the priorities and actions for the year ahead. We will be publishing the edition early to ensure that it hits desks the week before the convention. Polly Green Editor Centre for Economic & Social Inclusion, 3rd Floor, 89 Albert Embankment, London SE1 7TP The Centre for Economic and Social Inclusion is an independent, not-for-profit organisation working with business, Government, voluntary organisations and trade unions. Inclusion promotes social justice and tackles disadvantage. We want to help individuals, families and communities achieve economic independence and access more and better opportunities. tel: fax: web: Directors Dave Simmonds Mike Stewart Dr Jo Casebourne Craig Watt

3 welfare to work working brief 3 Past lessons for Future Jobs is heavily skewed away from London and SE (in some projects) bears little resemblance to the pace of work and working environment and demands of normal employment or are marginal to the needs of the local community lacks coherent and systematic effort at local level to appraise, monitor, and evaluate projects. We have welcomed the new Future Jobs Fund it s a significant investment in preventing the long-term unemployed becoming another lost generation. Now the hard task begins of delivering a major GB-wide programme in a very short time. An October 2009 start has meant that design decisions have been taken quickly, and local authorities (and other bidders) have now just six weeks to get their first proposals together (on page10 we print the DWP s guidance notes). Future Jobs is the latest in a line of postwar temporary employment programmes that go back to the 1970s and this means we have a strong evidence base on what has, and has not, worked. The guidance to bidders was released on 13 May 1 and Inclusion will be issuing a special report giving some advice on how it is best delivered at the local level. In this article we review lessons from past programmes. We almost exclusively draw on published reports as well as our 1980s archive of Working Brief s predecessor journal, the Unemployment Bulletin. We start with the Community Programme (CP) in the 1980s. Lessons from the Community Programme The CP was managed by the Manpower Services Commission (MSC) and ran between 1982 and At its height CP supported almost 250,000 temporary jobs lasting for a year. Young people could join after six months unemployment and over 25s after 12 months. All jobs were paid the rate for the job and were either full or part-time jobs, although towards the end the majority were part-time, and participation was voluntary. CP was both a popular and heavily criticised programme. Popular because a wide range of community benefit was delivered through jobs that were valued and 70% participants thought CP increased their job chances. Criticisms were split between operational and delivery problems and wider concerns about its lack of labour market impact on individuals. These criticisms were summarised in a Greater London Councils report: The Community Programme has been widely criticised since its inception on the grounds of job substitution, low levels of operating costs and wage levels, lack of equal opportunities, poor training provision, no link into jobs and inadequate monitoring. In 1986 the MSC s scrutiny report Value for Money in the Community Programme confirmed some of the problems. It concluded that CP: reinforces the lack of skills in participants is fast becoming a programme for single under 25 year olds under-represents very long-term unemployed people One of the major concerns about temporary work programmes is that they encourage participants to give up active job search, and have sometimes offered people better options than were available in the local jobs market. The concern was that CP locked out participants from the open labour market a safe job for 12 months, no requirement for jobsearch or training, and barely any emphasis on job outcomes, can lead to disadvantaging people in the long-run. However, the job outcomes were not that bad. The 1987 CP Participants Survey showed that 56% have had a job since leaving although only 35% were in employment at the time of the survey (10 months after leaving). These figures compare favourably with the job outcomes for some of the New Deal options. Lessons from Community Action Community Action operated between 1993 and 1996, aimed at those unemployed for over a year. It combined voluntary work with intensive job search activity for up to six months, and participants received their benefits plus 10. Participation was voluntary and it had a larger number of over-25s participating than CP. The three distinct changes from CP were: 1) benefit plus rather than a wage; 2) six month jobs rather than one year; and 3) embedding intensive job search. Whilst some lessons were learnt from CP the overall design seems to have reduced both the popularity and the job outcomes of the programme. Dave Simmonds examines some of the lessons from past job programmes that Future Jobs should be able to build on. The Community Action leavers survey showed that only 19% were in a job three months after leaving although direct comparisons with CP are difficult because Community Action had a higher number of long-term unemployed adults. Half (49%) of Community Action participants were

4 4 working brief MAY 2009 very satisfied with the work experience element of the programme, with another 31% being fairly satisfied. 2 The lack of access to training remained an issue with Community Action. Lessons from Intermediate Labour Markets and US Transitional Employment Intermediate Labour Markets (ILMs) originated as a response to the ending of the Community Programme in 1988 and having been going ever since. The Wise Group and Glasgow Works led the way in demonstrating how different funding streams could be combined to create jobs for unemployed people. In 2003 a DWP report 3 estimated that 14,000 unemployed people were in ILM jobs and that job outcomes averaged 43%. The report suggests that there are some features common to successful ILMs: targeting of the most disadvantaged targeting of geographical areas devised and controlled at the local level managing the transition from benefits to a waged employee support services for the individual employee access to training work which is close to conventional labour market conditions local partnership integration of national initiatives investment in staff capacity. Parallel to ILMs in the UK, Transitional Jobs became popular and successful in the United States primarily for lone parents. Continued development has led to a significant profile in President Obama s jobs package: The President s Budget will support new transitional jobs and career pathway programs, testing innovative approaches to helping lowincome Americans grab hold of and climb the career ladder. 4 The National Transitional Jobs Network 5 associates the following key factors with high performance: Targeting: transitional jobs should serve as a last resort for those recipients who face the greatest number of barriers and so have been unable to obtain private sector jobs. Placement diversity: this is vital for providers to develop an array of work placements that have a diversity of workplace expectations and flexibilities. Training: most of the programmes provide participants with some preplacement training on job search skills and work place norms. Some programmes also require participants to complete between four to 20 hours of other work related activities during the transitional placement. Support and supervision: at work, transitional workers receive more supervision and support than regular employees. Transitional jobs programmes tend to draw on rather than provide a range of supportive cash and in-kind supports, ranging from childcare through to transportation. Job search, retention and job developers: all transitional workers receive help searching for unsubsidised employment, but this is not always provided on-site and is often delivered by another agency. Case Managers and networking: evaluations constantly stress the importance of skilled case managers who can provide support, assist with tackling barriers and help participants gain access to the supports, additional help and job leads that are accessed through both formal and informal networks. Partnerships: effective collaboration between a range of agencies is a characteristic of successful programmes and this needs effective management both to deliver programme goals and also to create a joined up experience for participants. Lessons from StepUP The StepUP pilot ran from 2002 to 2004 in 20 pilot areas and provided a guaranteed waged job and personal and job search support for up to 50 weeks. It was available for those who were New Deal returners those who had participated on New Deal, left and not got a job and re-qualified for New Deal. The programme dealt with people who were considerably longer unemployed than previous programmes. The evaluation 6 tracked a sample of the 5,000 participants and compared them to a control group drawn from comparable non-pilot areas. The relevant conclusions from the evaluation were: overall StepUP had significant benefits for the over-30s and small benefits for the group, but not for younger Jobcentre Plus customers the initial jobmatch by Jobcentre Plus is important to promote a positive image of StepUP by participants and employers. The most successful areas were those that sourced an appropriate job after the participant s skills and interests had been identified the role of an independent Support Worker was thought to be critical in maximising retention within StepUP jobs. Support Workers were regarded positively by a large majority of participants Job outcomes were likely to have been higher had jobsearch been more effectively delivered. There needs to be a strong emphasis on jobsearch throughout the process and there should be increased requirements on participants, providers and employers to ensure jobsearch is delivered effectively there was a generally positive response from employers and 58% of all StepUp jobs were with private sector employers. The evaluation finding that older people benefited more than young people was significant, however the labour market context for young people is now very different to Common messages for Future Jobs If Future Jobs is to hit the ground running and deliver quality and value for money as well as the number of jobs, then local partners will need to take lessons learned from past programmes into account. Inclusion will be looking in more detail at this in future issues of Working Brief and producing a special report in time for the bidding deadline. References 1. See: futurejobsfund 2. Labour Market Quarterly Report, Nov Intermediate Labour Markets in Britain and an International Review of Transitional Employment Programmes, Finn and Simmonds, DWP, Nov US Dept of Labor, 5. See: 6. Final Evaluation of StepUP, Bivand et al, DWP, 2005.

5 claimants working brief 5 How is Jobcentre Plus coping with the recession? When the recession started, Jobcentre Plus was part way through a programme of jobcentre closures and staff reductions. This programme had been planned against a background of falling claimant numbers across all three major benefits, Incapacity Benefit, Income Support for lone parents and Jobseeker s Allowance (JSA) (in order of customer numbers before the recession). The initial response to rising JSA numbers was perhaps a little slow, but eventually the jobcentre closures programme was halted and staff redeployed to meet the need for handling new claims and interviews. Approval has now been given to raise the Jobcentre Plus headcount from 70,000 at the end of 2008/start of 2009 (up 4,000 on the original plan) to 82,000. This level is planned to continue for the next two years. However, there is a commitment to continually review staffing and resources as the recession develops and changes. So far, Jobcentre Plus believes that its response to the recession has met the initial shock, with the vast number of new claims for JSA in January-February 2009 The jobcentre closures programme has been halted and approval has now been given to raise the Jobcentre Plus headcount to 82,000 being processed and claimants interviewed in line with service standards. The Business Plan for Jobcentre Plus states that this has been achieved both by the addition of staff resources, including support from other parts of the Department for Work and Pensions and other areas of the Civil Service, and the success to date of the technology and business models used. Jobcentre Plus claims that despite dealing with around 50% more new JSA claims than the previous year, processing times have actually improved. Around The impact of the recession on jobs caught Jobcentre Plus by surprise. Paul Bivand looks at how it coped with the rapid rise in claimants. 80% of new JSA claimants have been interviewed within three days to talk about help in finding work. The call centres have also been operating above target. New claim processing is now handled by call centres and Benefit Delivery Centres, and these are not necessarily where the claimants live. However, interviews have to be within the relevant Jobcentre Plus office, so the geographical distribution of staff has to change as the number of claimants changes. The workload for Jobcentre Plus is heavily determined by the processing of new claims, principally for JSA, for which the turnover is highest, and the subsequent interview schedule of new jobseeker interviews, fortnightly reviews and three-monthly adviser interviews, leading into more intensive support at the six-month stage within the JSA regime for Flexible New Deal. The commitment in the Business Plan is to maintain our active intervention regime. The associated target, the interventions delivery target, is to ensure that 87% of specific JSA interviews take place within six weeks of their becoming due (and that 83% of IS lone parent interviews take place within three months of becoming due). These targets relate to the interviews taking place. A concern is whether the time available for interviews is sufficient. In a recession previous research has found that larger proportions of people believe there are no jobs available, and so reduce jobsearch. Labour market statistics contain a column for discouraged workers, people who want to work but are not looking because they believe there are no jobs available. There are usually very small numbers in this category in the UK, (51,000 in the latest release) possibly because relevant people have, up to now, been taught by Jobcentre Plus that this is not an acceptable reason and they should be looking for work, even if they believe there are few jobs available. The task of helping and persuading people to look for work when they may feel there is little point is a key task of Jobcentre Plus and provider advisers. It may well require

6 6 working brief MAY 2009 Once claims are processed the labourintensive element of Jobcentre Plus job is to make sure that all claimants have the requisite number of interviews the plan is that 12,000 extra staff will cover this Expected job outcomes down by 20% It is not, perhaps, surprising that the target for 11.1 million job outcome points for looks like having being missed by a country mile. The target is nine million. This is a 19% reduction and it rather looks as though predicted final job outcome points will have been well below nine million, leading to an improvement to nine million being seen as challenging. The latest figures Jobcentre Plus has published were to the end of September 2008, and showed just over five million job outcome points being recorded with six months to go, but before the worst of the recession. Elsewhere in this issue we discuss leavers from the claimant count. We would expect, as in previous recessions, the number of leavers to rise, and within that, the numbers of job outcomes to rise. However, we would expect those who have always been harder to place into employment to be even harder to place in a recession. Therefore, despite the increased number of job outcomes, Jobcentre Plus could reasonably expect a fall in the points score per job outcome, with many of the jobs going to short-term claimants. This may make even the reduced target very challenging. more than a few minutes conversation, especially when the customer knows well what the expected answers are. On page 7 of this issue we look at the trends in the numbers of new JSA claimants. At this stage, it looks as though the number of new claims may rise somewhat, but it is unlikely we will see a further jump in new claims as we have seen in the last year. Some may be more hopeful than that. We do not have much public information on new claims for other benefits. We have some information on the lone parents who are being affected by ending eligibility for Income Support when their youngest child is 12. Equally, we hear rumours that the Employment and Support Allowance application process is refusing a larger proportion of claims than Incapacity Benefit did (this was part of the design). These claimants end up claiming JSA, so the number of new claims for other benefits is likely to be falling as a proportion, even without the rise in new JSA claimants. Once claims are processed, the labourintensive element of Jobcentre Plus job is managing an interview schedule to make sure that all claimants (of whichever benefit) have the requisite number of interviews and that the effect and content of those interviews is as designed. The plan is for an extra 12,000 staff to be able to cover that, until those who remain on JSA beyond 12 months go on to a Flexible New Deal provider. Forthcoming training courses Meeting the needs of the moment: local labour market information how to find out what is happening and profile projections for the near time This course is aimed at enabling those providing statistical support to local partners to identify and use data on the month-by-month course of the recession in local areas, and trends over the shorter term. Place and date: 11 June London Meaningful service user involvement in the design, monitoring and evaluation of provision All of our funders want it. Senior managers tell us we should do it. But how do we avoid service user involvement becoming another tokenistic process and find ways to really allow our service users to impact positively on the policy, practice and development of our services. By the end of the day participants will have the tools to develop an involvement plan for their service with the confidence to enable others in their teams to go forward and make the plan a reality. Place and date: 30 June 2009 London How to analyse your local labour market: beginners This course will help those tasked with providing information on the local labour market to identify relevant information and source it. The course covers the identification of information on demand and supply in the local area, commuting and its impact on local labour market indicators, and how to understand the classifications used in labour market analysis. Place and date: 9 July 2009 London For further information on our courses and events or to book, please visit our website or contact the Events Team at: events@cesi.org.uk or call

7 labour analysis working brief 7 Perhaps the end of the beginning? The number of new claims for Jobseeker s Allowance (JSA) each month has now been close to flat for two months. The rise in the month to April was 1,400, or 0.4%. In the month to February, the monthly rise was 9.1%. Last month there was just a tiny increase, and we wondered whether this was a blip owing to some odd things like changes in Easter dates that make those statisticians who do seasonal adjustment wince. April figures are affected by Easter as well, but over the two months the effects should even out. Chart 1 (see page 8) shows the trends in new claims for JSA and leavers from JSA over the last two years. The sharp rise in new claims from March 2008 to February 2009 is clearly visible, and the flattening after. The numbers of leavers from JSA also rose over this period. This is discussed later in this article. However, the numbers of new JSA claims are running at a historically high level. The current level of 363,900 (seasonally adjusted) was exceeded in 18 months over the period March 1991 to April The overall maximum reached in the last recession was 400,000 in In there were two major (and several minor) periods of apparent improvement in the claimant count before the maximum inflow was reached October However, there were two major (and several minor) periods of apparent improvement before that maximum inflow was reached. The more positive way of looking at that is that after the first peak of 388,000 in March 1991, there was a period when rises and falls were relatively small. The less positive way of saying this is that the period of very high new claims for Unemployment Benefit (as was) lasted for two years. Chart 2 shows the new claims and outflows over the whole period for which we have comparable records, from late The horizontal line shows a level of Paul Bivand examines whether we are through the worst in terms of accelerating increases in unemployment. 360,000 new claims (or outflows), just short of where we are now. It shows that the initial peak of new claims in 1991 was followed by a distinct improvement, then a further increase in new claims in When one reads the finance pages of the broadsheet newspapers talking of a double-dip recession, this is the kind of pattern they mean. Chart 2 also shows that leavers from the unemployment count also rose in the last recession. It has been claimed that this time, the rise in leavers is faster than it was last time. However, there is a rather more complicated story to tell on this. One of the main reasons there are more leavers from the claimant count is simply there are more people to leave. If we calculate the number of leavers in a month as a percentage of those who could leave (ie those who were claiming at the start of the month plus those who claimed during the month), then that ratio has fallen from 20.6% in April 2008 to 16.0% in April 2009, a fall of 4.6 percentage points within a year. However, this is not the full story, because some of the leavers from the count are leaving to go to programmes designed to help them look for work. The numbers leaving to programmes (principally the old-style New Deal options and IAP) have gone up recently as more people (particularly those aged 18-24) have become eligible for New Deal options. Over the quarter to April 2009, an average of 22,157 a month left the count to programmes. This is a 20% rise on last year and a 30% rise on If one excludes the leavers to programmes from the JSA leavers figure (because they are still being helped by Jobcentre Plus and its providers), then the number of leavers from the JSA rate is cut to 14.8%, 4.3 percentage points down from its recent maximum in January This is shown in Chart 3 (page 9). Chart 3 does show what looks like an improvement in the ratio in the last couple of months. This is largely because of the flattening out in JSA inflows. On the other hand, leavers to programmes have not been seasonally adjusted as the other figures have these are three-month averages so it is possible that seasonal

8 8 working brief MAY 2009 adjustment may change the figures somewhat. The equivalent figures without the programmes show a 0.3 percentage point improvement in the leavers rate from February to April; including programmes cuts this to a 0.1 percentage point improvement. While it is entirely feasible that the pattern in Chart 3 would simplify to a smoother fall if we improved the statistical methods, what does seem to be the case is that the rate at which things have been getting worse has slowed compared with last autumn on this indicator. Chart 4 shows the long time-series, including the last recession, but excludes the programme effects as we do not have consistent figures before In the previous recession there were effects from people leaving the count to programmes (and for other reasons). At that time the Employment Department used to evaluate initiatives against the net exchequer cost per person off the count (or NEPPOC), so the issue was a live one at the time. Chart 4 shows several important features. First, that the rate of leavers increased by 4.5 percentage points between April 1996 and April This was before the introduction of New Deal, and is largely an effect of the introduction of JSA and its regime. Some of that effect comes from leavers to other destinations or other benefits rather than jobs, but the change in benefit regime seems to have produced a step change in leavers of around 4.5 percentage points; this change has persisted since then. The current leavers rate is the lowest (bar two months) since the introduction of JSA. Thousands Chart 1: Jobseeker s Allowance claimant count new claims and leavers New claims Leavers Apr 2007 Aug 2007 Dec 2007 Apr 2008 Aug 2008 Dec 2008 Apr 2009 Chart 2: JSA claimant count new claims and leavers Thousands Leavers New claims Apr 1989 Apr 1992 Apr 1995 Apr 1998 Apr 2001 Apr 2004 Apr 2007 The fall in the leavers rate with the onset of recession has been very much sharper this time than in the last recession. Between May 2008 and February 2009, the crude leavers rate, including leavers to programmes, fell by 4.4 percentage points. This took place over nine months. Between May 1990 and February 1991, the leavers rate fell by 2.8 percentage points, from 15.1% to 12.3%. The low point for this particular indicator was reached in December 1992, at 9.6%. The fall in the leavers rate in the last recession was, at the maximum, 5.9 percentage points. However, it is perhaps more telling that in only three months in the last recession was the fall in the leavers rate greater than the fall to date in this one. Two of those were 4.5 percentage point falls, so unless there are no further falls in the leavers rate the decline to date, in less than one year, has been almost as large as during the whole of the last recession. Charts 1 to 4 examine all starters and leavers from the claimant count. Chart 5 looks at the rates for new claimants staying on through three months. It is from one of the analyses we do regularly and is available on our website as soon as possible after the figures come out. However, here we have selected just the one duration group, the shortest, and looked over the long term to compare with the previous recession. There are a number of patterns that are common (if reversed we are here talking about staying on rates rather than leaving rates) to the previous discussion. Chart 5 shows that, in the last recession, the staying on rate for shortterm claimants rose by 10 percentage

9 labour analysis working brief 9 points between April 1990 and April The peak was a further two percentage points above the trough. After the peak, there was a period of slow improvement until the introduction of JSA in October 1996 cut the staying on rate by seven or eight percentage points, followed by a more rapid rate of improvement than before to summer There was a sharp rise in the staying on rate in , followed by a sharper fall, associated with the relaunch of the JSA regime in April By January 2008 the staying on rate for new claimants through three months was the lowest on record. The rise to the current position retraces all the ground gained since the introduction of JSA a 15.8 percentage point rise, half as much again as the rise in the last recession. On this measure, we are now back at the same point we were in December We know what happened to those people who had went through that threemonth threshold in December 1990: 23% of the new claimants became 12-month unemployed. The regime for jobseekers is now substantially different from that in existence in , so it is possible that we will not reach that position. However, we will know in a further quarter how many of the 0-3 month claimants in December 2008 were 6-9 month claimants in June This will give an indication of whether we are doing better than in the last recession, or whether we are following a similar track. If we are doing better, we will know how much better, and this in turn will impact on the size and shape of programmes needed for the longer-term unemployed. Per cent Per cent Chart 3: Jobseeker s Allowance leavers as proportion of claimants (excluding leavers to programmes) Apr 2007 Aug 2007 Dec 2007 Apr 2008 Aug 2008 Dec 2008 Apr 2009 Chart 4: Jobseeker s Allowance leavers as a proportion of claimants Oct 1996 Jobseeker s Allowance replaces Unemployment Benefit Apr 1989 Apr 1992 Apr 1995 Apr 1998 Apr 2001 Apr 2004 Apr 2007 Chart 5: Jobseeker s Allowance new (0-3 months) claimants staying through 3-6 months (seasonally adjusted) Oct 1996 Jobseeker's Allowance starts Per cent Nov 1985 Nov 1988 Nov 1991 Nov 1994 Nov 1997 Nov 2000 Nov 2003 Nov 2006

10 10 working brief MAY 2009 Future Jobs Fund The Department for Work and Pensions has issued guidance notes for bidders to support the Future Jobs Fund Bid Document. 1 Section A: information on the bidders and minimum criteria Who is the lead partner in the bid? Bids can come from anyone, but we have a strong preference for partnership bids, and are keen for partnerships to involve social enterprises and the wider third sector. We expect the majority of bids to the Fund to be led by local authorities, sub-regional, city region and local partnerships, or by national or local public sector and third sector bodies. We will not prescribe the partnership model, but lead bidders will need to satisfy themselves that they and their partners have complied with all relevant legislation in relation to the employment of any individual. Bidders should also consult with trade union organisations where appropriate. We reserve the right to select from the range of projects that are put forward within a bid. Who are the members of the partnership and which other organisations, if any, have you consulted? We particularly welcome partnership bids, and encourage all bidders to demonstrate that key partners within the area have been involved in developing the proposals. Bidders need to clearly set out how they intend to assess the financial viability and track record of partner organisations they are working with to deliver the Future Jobs Fund jobs. To be considered for Future Jobs Fund funding, all jobs created must be extra jobs, lasting at least six months they must deliver work that benefits the local community Any bids from national organisations should indicate the geographical areas in which they are seeking to create jobs. What do the jobs need to deliver? To be considered for Future Jobs Fund funding, all jobs created must: be extra jobs, lasting at least six months, either for long term unemployed young people or in unemployment hotspots deliver work that benefits local communities be under way quickly. Some definitions by extra we mean that the jobs would not exist without this funding; by job we mean work for at least 25 hours a week paid at least at the national minimum wage; by long term unemployed we mean people who have been on Jobseeker s Allowance (JSA) for approaching a year; by young people we mean between 18 and 24; by hotspot we currently mean areas where the rate of unemployment on the JSA measure is (in the latest unemployment figures) more than 1.5% above the national average. We will ask bidders to identify any geographical area(s) that they consider to be such a hotspot when presenting their bid. All jobs must be suitable for long term unemployed young people between 18 and 24, but if your bid requires that those who take up the jobs require any specific or specialised skills you must set these out in your bid document and why these are required. If your bid assumes that any of the jobs created will go to people over the age of 24 you must set this out in your bid document. All of the jobs created through the Future Jobs Fund must provide direct benefit to the local community over and above that delivered through employing people who are long-term unemployed. We have not defined the community benefits we are looking to achieve, which could include, for example, social, environmental or culture benefits, and wherever possible the outcomes of the Future Jobs Fund bids should be linked to an area s strategic planning through the Sustainable Community Strategy and Local Area Agreements. How much funding is available and what does it need to cover? The total maximum contribution available through the Future Jobs Fund is 6,500 per job created for year olds approaching 12 months of unemployment, or people in areas of high unemployment. This must cover the labour costs of employing someone for 6 months, for 25 hours a week at national minimum wage, plus any material and supervision costs required to undertake the job. We will welcome bids with a lower unit cost and/ or which align additional funding streams to supplement Future Jobs Fund funding. All bids will also be expected to demonstrate value for money by

11 future jobs fund working brief 11 delivering maximum benefit to individuals and communities for the cost incurred. Section B: secondary criteria and further information How many jobs are you bidding to create? We are not setting a formal minimum for the number of jobs created by a proposal. However, we expect bids to be of a reasonable size and to have considered all relevant partners within a particular locality. As a guide bids should aim to create at least 30 jobs over a six month period. The number of jobs refers to the total number created at a given time but the bid should also indicate how many jobs would be created across the duration of the proposal. Over what period are you bidding to create jobs? Bids will need to indicate the length of time for which places could be made available (based on funding duration of six months per individual) and duration of the projects/jobs on which people would be employed. The Future Jobs Fund will need to create jobs between October 2009 and March 2011 and bids should ideally cover this period. However, organisations can bid at any point and so the period covered by each proposal may vary from as little as six months to as much as 18 months. Bidders will also need to set out a timeline of when and how many jobs will be made available on a month by month basis over the length of the period covered by their bid (i.e. we do not anticipate that all jobs will start on the same day). How long will it take you from notification of funding to get the first jobs up and running? It is important that we get jobs in place as soon as possible and bids will need to indicate the lead-in times required to deliver employment opportunities through the Future Jobs Fund. While speed of delivery will be important we will not however exclude suitable bids with slower delivery times from being considered. Future Jobs Fund proposals should be an integral part of an area s response to worklessness Bids will need to indicate the duration of each job within their proposal. Jobs will be funded on the basis of lasting a minimum of six months but we would encourage bidders to look at longer durations where this is possible. How much detail on the breakdown of costs do we need to provide? Bidders should set out what proportion of the 6,500 they will need as start up costs and what this funding will cover (e.g. what materials, supervision etc). Bidders should also indicate what their ongoing costs will be and what these will cover. Can we align additional funding with the Future Jobs Fund? Bidders will need to set out what additional funding streams can be aligned with Future Jobs Fund award and give details of how they intend to use this funding. We expect, wherever possible, that local authorities seek to develop synergies between existing work and skills funding streams and Future Jobs Fund bids. Local authority bidders should set out if Working Neighbourhoods Fund (in England) and Deprived Areas Fund (in Scotland and Wales) has been allocated to their areas and if so whether they intend to use their allocation to supplement their Future Jobs Fund bid. In England, Future Jobs Fund bids should build on delivery plans for existing local worklessness targets and support the future development of Work and Skills Plan. It will be important to look at ways existing funding can be redeployed to maximise the benefit of the Future Jobs Fund for both individuals and the community. Examples of related funding streams include, but are not limited to; European Social Fund, Working Neighbourhoods Fund, Local Enterprise and Growth Initiative and European Regional Development Fund. If you are bidding in England, have you developed or are you developing a Work and Skills Plan and worklessness assessment? Councillor Stephen Houghton s Report Tackling Worklessness recommended that local authorities in England should develop a Work and Skills Plan that set out the strategic approach for meeting the objectives defined in an area s worklessness assessment, describe the current funding arrangements for tackling worklessness, and set out the roles and responsibilities of national and local partners. The Government accepted this recommendation in its response to Councillor Houghton s report. Future Jobs Fund proposals should be an integral part of an area s response to worklessness and so should therefore (in England) complement the activity set out current deliver of worklessness targets. All bids will require supporting analysis to demonstrate demand and supply side considerations and local authorities in England that successfully bid for funding through the Future Jobs Fund must commit to having a Work and Skills Plan in place by April We will be discussing with the devolved administrations whether any similar requirements should be placed on authorities in Scotland and Wales. One of the key aims of the Jobs Fund is to support the guarantee for young unemployed people. The Government will therefore need to match demand for jobs with supply. Bidders should demonstrate that jobs will correspond to levels of longterm unemployment, particularly youth unemployment, in areas where jobs will be created. What support will employers need to provide Future Jobs Fund employees? It will be very important to consider what additional support individuals from the target group will need when taking up particular jobs. It is likely that individuals will require specific support while they are employed and bids will need to demonstrate that employers will be able to work with partners and Jobcentre Plus

12 12 working brief MAY 2009 Bidders should think creatively about the sources of support and the partners they engage with to deliver this support. partnerships e.g. City Strategies, Multi Area Agreement partnerships and City Regions that will be important in delivering good job opportunities quickly through the Future Jobs Fund. Bidders should set out their experience and expertise along with details of their existing partnerships as part of their bid. References 1. This is available to download from Lead partners should complete Section A of the Bid Document. A separate Section B of the form should be completed for each distinct project or type of job to be created. This should be completed by the partner that will act as employer for those jobs. Bidders should think creatively about the sources of support and the partners they engage with to ensure Future Jobs Fund employees are able to maximise the benefits they get out of their employment. How will you improve Future Jobs Fund employee s long-term employability? Future Jobs Fund jobs should have a positive impact on the employment prospects of those who are employed and so the bid will need to set out how this support will be tailored according to individual needs. This support is likely to include accredited training, continued jobsearch and interview techniques, CV writing, work focused training, and working practices. It will also be important to set out how the individual will be supported to move into sustainable employment at the end of the period of Future Jobs Fund employment. What do employers have to do when a Future Jobs Fund finishes? All successful bidders will be expected to provide everyone who leaves a Future Jobs Fund jobs with: an exit interview, in order to assess their experience a reference that captures their performance, attendance record and any skills learnt. We do not intend to require bidders to monitor what happens to Future Jobs Fund employees after they leave the job What evidence do you have that your bid is credible? Local Authorities and other organisations involved in bids will often have significant expertise in employing individuals who qualify under the Future Jobs Fund and experience of putting in place the systems of training and support these individuals require. There will also be a number of existing Forthcoming training courses Moving into and getting on at work: how to develop personalised pathways that overcome barriers and lead to sustainable employment This workshop provides opportunities for you to understand more about how to design and deliver comprehensive and integrated employment focused pathways for people who are at most disadvantage. Places and dates: 28 May 2009 London, 12 November 2009 Sheffield. Mental health awareness for welfare to work advisers This course is aimed at frontline workers who wish to develop a more informed and inclusive approach to their clients who have been labelled as having a mental health problem. Looking at the stigma of the label mental health, this course challenges some of our deeply held societal beliefs and the negative impact this can have on our work with individuals. Place and date: 2 June 2009 London Selling diversity to employers This interactive workshop explores diversity and employment issues from both supply and demand sides when it comes to creating employment opportunities among hard-toreach groups and tackling social exclusion of minorities in society and employment. The facilitators seek to create a safe space for practitioners from a very wide range of disciplines to understand better the challenges of diversity as seen by employers and then to build on that understanding in the conduct of their daily professional life, in a very practical and accessible way. Places and Dates 4 June 2009 London, 6 October 2009 London Making jobsearch work This intensive one-day workshop explores essential aspects of jobsearch through practical and interactive activities. The course covers: the key components of effective jobsearch; planning and managing jobsearch activities; target setting and reviews within a jobsearch environment; using, supporting and developing jobsearch activities that meet client needs; developing transferable skills within jobsearch; and exploring examples of jobsearch activities and techniques. Place and Date: 9 June 2009 London For further information on our courses and events or to book, please visit our website or contact the Events Team at: events@cesi.org.uk or call

13 future skills working brief 13 Ambition 2020: achieving world class skills The UK Commission for Employment and Skills (UKCES) has published Ambition 2020: World Class Skills and Jobs for the UK which assesses the progress the UK has made towards becoming a world leader in skills, employment and productivity by The study reveals that Government and UK employers need to increase their efforts to raise their ambitions and the nation s skills if the UK is to be in the top eight countries in the world for productivity, employment and skills by The UK s position has barely changed since the Leitch report was released in 2006: 11th in the world in productivity levels, 10th in employment, 17th on low level skills; 18th on intermediate level skills; and 12th on high level skills. The report warns that it remains the case that one in eight adults of working age has no qualifications; more than a quarter are not qualified to Level 2; and almost half are not qualified above Level 2. The commission projects that, without drastic action, the UK s relative international position is unlikely to improve by 2020 and overall, it may deteriorate slightly. It predicts that 95% of UK adults will be literate by 2020 (according to the recommendations of the Leitch review) but that the numeracy ambition will not be attained, with an expected outcome of between 88% and 90% of UK adults achieving functional numeracy. The UKCES does not believe it is likely that the UK will make progress on the 80% employment rate, not having increased significantly since The report predicts the employment rate will decline by Although international benchmarks are based on qualifications, using other measures of skill development, notably training, the picture is slightly different, according to the UKCES. Around two thirds of UK employers provide training to their staff. However, this training is unevenly and unequally distributed: lowskilled employees and those in lower status occupations receive considerably less training. Overall there has been sustained growth in jobs, which have, on the whole, been higher skilled, while the proportion requiring low or no qualifications has been declining, meaning that vulnerable groups and people facing multiple barriers to employment find themselves at a particular disadvantage. Conversely, the report has found that the growth in the numbers of high-skilled people significantly exceeds the growth in our numbers of high-skill jobs, which the UKCES believes indicates an emerging gap between the supply of, and demand for graduates as well as an increase in the proportion of workers who are overqualified for their current jobs. The UKCES believes this is because there is weakness on the demand side with too Rosanna Singler highlights a new report from the UK Commission for Employment and Skills few high performance workplaces, too few employers producing high quality goods and services, too few businesses in high value-added sectors. In order to build an internationally competitive economy, the future employment and skills system will need to invest a lot of effort in raising employer ambition and stimulating demand. In addition to this, the UKCES argues for the importance of aligning the skills available with skill requirements and that to achieve this it is necessary to improve UK leadership and management, which can more effectively use the skills of the workforce. To achieve this, it is imperative to increase the ambition and aspiration of individuals to gain new skills throughout their working lives. The Commission also states that it is critical that the skills of those who are unemployed are nurtured in preparation for the recovery. The report lays out five key priorities that the UKCES has identified for the next five years: 1. To create a clear and integrated strategy for economic transformation and renewal, capable of sustaining the UK through periods of recession, recovery and growth, and that aligns policies and practices in industrial strategy, employment and skills. 2. To support effective economic development in cities and local communities, built upon economic and labour market strengths and opportunities, and maximising the skills of the local working-age population. 3. To develop more agile and responsive skills and employment provision, capable of anticipating and rapidly meeting employers skills and job requirements. 4. To transform individual aspiration and skills into a world class workforce, maximising the motivation and opportunity for all people to develop and exploit their talents and skills to their full potential. 5. To build employer ambition and capacity, capable of competing globally in the high skills, knowledge-driven economy, by optimising the talent and skills of its people. References 1. Available at:

14 14 working brief MAY 2009 DWP commissioning: it s not all about Flexible New Deal A large number of contracts are being let this year, with the Department for Work and Pension s Commissioning Strategy committed to longer contract periods Damon Gibbons looks at DWP activity Despite the delay in decisions over Phase 1 Flexible New Deal contracts (FND), and no announcement yet concerning the start of the commissioning process for Phase 2, it would be wrong to think that the Department for Work and Pensions (DWP) commissioning activity has stalled. In fact, this is going to be an extremely challenging year for both DWP and its providers. A large number of contracts are being let this year, and with DWP s Commissioning Strategy committed to longer contract periods than previously, we can expect the decisions made this year effectively to set the provider landscape for the next five years. At the same time, DWP has been reviewing how it works with Jobcentre Plus and providers to improve the Current commissioning activity Jobcentre Plus support contract: a national programme delivering a engagement activity, vocational training and pre- and post-employment mentoring to support Jobcentre Plus customers. A total of 24 contract packages are being tendered. Shortlisted bidders are expected to be notified in the week commencing the 18 May with full tenders required by 17 July Contracts start in December Specialist Disability Employment Programme: a 435 million programme to be delivered over five-year contracts, which will provide tailored packages for customers whose disability raises serious and complex issues in finding and/or keeping a paid job. This programme is currently at pre-qualification questionnaire (PQQ) stage deadline 18 May and shortlisted bidders are expected to be notified on 27 July Full tenders will then need to be submitted by 26 October Contracts will run from October 2010 to European Social Fund: the ESF Phase 2 programme targets lone parents, older workers, people from ethnic minorities, people with low or no qualifications, and young people, especially those not in education, employment or training; 12 contracts are being let on a regional basis. The PQQ stage is now closed and shortlisted bidders are expected to be notified on 25 May with full tenders required to be submitted by 17 July Delivery starts in December partnership working that will be critical to delivering improved performance and value for money. New Provider Engagement Meetings have been established which will provide a focus for Jobcentre Plus and the provider to jointly look at issues that are impacting on the delivery of services locally share information, such as expected changes to volumes, periods of high staff absence which might impact on referrals [and] consider trends and reflect on other factors impacting on performance. Factors to be considered by Provider Engagement Meetings will include: changes in the local labour market wider strategic policies employer engagement other provision and links to other providers, including skills provision third sector involvement supporting Local Employment Partnership outcomes. Although at a relatively early stage in their development it is already clear that the discussions held in Provider Engagement Meetings and the operational agreements reached between Jobcentre Plus and DWP providers will need to be linked into wider employment and skills plans for their areas. In this respect, the guidance for Provider Engagement Meetings (now available from DWP s website at: t_we_buy/pg_chapter_7.pdf) includes a reference to the potential value of including key local strategic partners in the meetings. The guidance also contains useful templates setting out the main

15 contracting working brief 15 Future 2009 commissioning Progress to Work/Link Up: the programme will offer personalised additional support for customers such as recovering drug and alcohol misusers, homeless people or ex-offenders to help them to move into work. PQQs are expected in late Spring / Summer Work For Your Benefit Pilots: providing tailored, full-time activity (work experience and employment support) for some customers who finish Flexible New Deal without finding sustained work. PQQs are expected in Summer Invest to Save Pathfinders (formerly AME/DEL): occurring in five regions of the country and supporting long-term incapacity benefit claimants back into employment. They will be funded by an invest-to-save agreement between DWP and HM Treasury, with the Department paying providers out of the benefit savings achieved from successful job entries. PQQs are expected in autumn Personalised Employment Programme: a single, integrated, flexible employment programme for Jobseeker s Allowance and Employment and Support Allowance claimants. PQQs are expected in autumn 2009 Pathways: improvements in Pathways to Work are being considered which will impact on the contracting of Provider Led Pathways later in agenda items that will need to be discussed and to record agreed outcomes and actions from the meeting that could be applied more generally and used as prompts for wider employment and skills partnerships to consider when reviewing local performance and refreshing their strategies.

16 16 working brief MAY 2009 Delivering welfare to work: staff views and practices Siobhan O Sullivan reports on the British part of an international study Activating States. In December 2008, Mark Considine, Jenny Lewis and Siobhan O Sullivan, from Melbourne University, surveyed 1,196 UK frontline employment services professionals. Survey participants were drawn from 11 employment agencies, representing the full range of ownership types (Government, for-profit and not-forprofit). Survey participants were asked around 100 questions about how they do their job, who they interact with, the clients they service, and how their agency operates. The survey was carried out as part of the Activating States project, and similar surveys were also run in Australia and the The survey results show that frontline staff consider 39% of their clients to be more difficult to place, while 18.26% were classified as easier to place. Netherlands in late 2008/early In turn, the current project builds on Figure 1: Highest educational level benchmark data collected ten years ago. The long term goal of the project is to track the development of the employment sector between countries, and across time. Early findings from the UK paint an interesting picture and give the research team a range of valuable insights to investigate further. For example, one of the most striking results was that frontline staff perceive over one quarter of their clients (26.27%) to be suffering from a mental health condition. At the same time, survey participants believe that 38.33% of their clients would rather be on benefits than in work, meaning conversely that almost two thirds of registered clients are enthusiastic jobseekers. The survey also asked how difficult or easy clients are to place. The survey results show that frontline staff consider 39% of their clients to be more difficult to place, while 18.26% were classified as easier to place. Survey participants felt that a little over a quarter (26.76%) of their clients do not comply with their obligations. For a full range of results related to jobseekers, and jobseeker behaviour, see Table 1. Frontline staff were also asked about how they work with jobseekers. Respondents indicated that they follow 56.74% of their clients closely, while 16.52% are not followed at all. On average survey participants had an active caseload of 75 clients. Over half of all those surveyed (56.2%) said they use a client classification tool when deciding how to work with jobseekers, while respondents reported having placed around five jobseekers into work in the past month (see Table 2). Yet despite the apparent popularity of client classification tools, survey respondents demonstrated considerable confidence in their ability as professionals. When asked how influential a range of factors are in determining how they work with jobseekers, the most popular response was my own judgement (38.7%). That was followed by labour market demand at 36.8% and availability of labour market programme vacancies at 36.4% (see Table 3).