South West Regional Skills Enterprise and Employment Analysis 2007/2008

Final Report

6.8 Tackling worklessness

The ESF Impact Report found that worklessness is a difficult agenda to address, especially when targeting hard-to-reach groups as the South West ESF programmes have done. The evaluation has revealed a number of issues that are important when considering options for addressing worklessness in the future, the three most important being:

• Work orientation of beneficiaries;
• Capturing and recording soft outcomes (eg distance travelled towards labour market and removal of barriers); and
• Involving employers.

National research(111) has found that training linked to employer placements and work experience has proven to be effective. However, the ESF Impact Report showed that, few worklessness projects involved employers in delivery, with only 7% of unemployed and 28% of inactive beneficiaries benefiting from work placements.

The ESF Impact Report proposes that new ESF programmes should continue to build on the areas where ESF has successfully added value in the past. In particular:

• Targeting those people in society who are most disadvantaged. ESF has achieved this through flexibility of funding, by recognising that the best organisations to deliver this work are those operating outside statutory provision and inside the community. An important part of this is the recognition that projects targeting the most disadvantaged can be more expensive to run. The programmes have also funded activity that results in soft outcomes, a necessary pre-requisite to harder outcomes, but there need to be better means of capturing and recording these outcomes.
• It has also added value by targeting pockets of deprivation and there are some excellent examples of this work undertaken by community organisations. However, there needs to be greater co-ordination of this work and Local Area Agreements may provide the vehicle for this.

Issues not yet successfully tackled by the programmes include:

• The problems of under-employment. This is an important regional priority that will need to be addressed in future programmes; and
• Engaging employers in projects so that they are ready to take on beneficiaries following their period of support. Some work has been undertaken but this needs to be addressed further.

The ESF Impact Report recommends that:

• The ESF Programme should continue working with the most disadvantaged groups, focusing on those most hard to reach and those close to the labour market;
• Extra resources should be made available to target pockets of deprivation through coordinated, community-based provision that ties in with Local Area Agreements;
• Better systems need to be developed for recording soft outcomes;
• Employer engagement, including pre-project involvement in preparation of aims/objectives, on-going involvement during the project and commitment to provision of employment at the end;
• Development of a greater understanding and of pilot projects to address the causes of under-employment.

6.8.1 Tackling worklessness through skills

A wealth of evidence suggests that skills and qualifications are important to individuals, the economy and society. People with qualifications are more likely to be employed than those with lower or no qualifications. Higher levels of literacy and numeracy are associated with a greater likelihood of being in work. Many people face multiple barriers to employment, and when an individual faces a range of barriers to employment, having no skills or qualifications may be a contributory factor preventing them from moving into employment.

There is currently a long tail of low-qualified and low-skilled adults who are increasingly inactive in the labour market. Improving qualifications and skills levels of these individuals will be essential to increase productivity, maximize output and improve social equity, as well as maintaining and increasing employment rates.

A recent evidence report, DfES and DWP: A Shared Evidence Base: The Role Of Skills In The Labour Market(112), looked at the impact of skills and employment related interventions on the labour market.

It concluded that employment-focused programmes have generally had more impact on initial employment chances for the low-skilled and are more cost-effective than education-focused programmes but the jobs low-skilled people move into are typically low-paid and provide few prospects for progression. This in turn results in ‘churn’ whereby workers move back and forth into unemployment.

Training is therefore likely to be necessary to help move some of the low-skilled group into work. This evidence suggests that: developing strong links with employers; a clear work focus; use of employer placements; and support which is tailored to meet individual needs are critical features of successful initiatives.

It also found that the best improvements in earnings and productivity occur when qualifications are gained in the workplace. However, those with low levels of skill are the least likely to receive training from their employers. The evidence suggests that the most effective provision is a package of support involving work experience or local labour market contact, individually tailored and geared towards local opportunities.

This indicates:

• The need to develop better ways of identifying those for whom a lack of qualifications or skills is a barrier preventing them from moving into good quality sustainable work;
• The need to encourage employers to offer training to their low-skilled employees, ensuring that training is well designed and delivered;
• The need for a seamless service so that when people start to improve their skills whilst on benefits they can continue their learning once they move into work.

In the Budget 2006, the Chancellor commissioned the Leitch Review to consider how better to integrate skills and employment services. Skills, and particularly qualifications, offer individuals the flexibility to advance, change jobs and careers. The Leitch Report highlights the fact that significant problems exist with job retention at basic entry levels: around two-thirds of all Jobseeker’s Allowance (JSA) claims each year are repeat claims. This issue is of significance to many parts of South West due to the seasonal nature of employment on offer.

The Leitch Report has therefore proposed a new integrated employment and skills service, drawing together existing services such as Jobcentre Plus and the new adult careers service. This would offer universal access to work-focused careers advice, basic skills screening, job placement and links to in-work training. Common objectives and aligned incentives would drive delivery which would be monitored by the Commission for Employment and Skills and Employment and Skills Boards. The aim would be to ensure individuals receive effective support to get into work, stay in employment and progress.

The Chancellor’s Pre-Budget Statement 2006 accepted the need for a “strong, coherent employer voice at the heart of the skills system”, and that this should be delivered through the new Commission for Employment and Skills, recommended by the Leitch Review. In advance of the creation of the Commission, Sir Digby Jones has agreed to take on the role of the Government’s Skills Envoy, working with all employers to help build a national consensus about the need to work together to improve the UK’s skills.

Conclusions

The evidence suggests that there is much to be gained by ensuring a strong integration of skills and employment if job retention is to be achieved and if a solution is to be found to increasing unemployment amongst the low-skilled.

Evidence also supports pre-employment and post-employment support activities as a way of improving job retention. There is limited funding available for this activity and that which takes place is heavily reliant on ESF funding. This should form an important part of the ESF framework for the region.

(111) DfES and DWP: A Shared Evidence Base: The Role Of Skills In The Labour Market, DfES/DWP, 2007
(112) Ibid