ANNEX
RESPONSE FROM THE DEPARTMENT FOR EDUCATION
AND EMPLOYMENT
NDYP outcomes
1. Just over 215,000 NDYP participants have found
work, and 162,000 young people have obtained jobs which lasted
for more than 13 weeks. Of these, 139,000 were sustained, unsubsidised
jobs (paragraph 3).
Response: Now (end of
August) over 244,400 NDYP participants have found work. Over 186,000
young people have obtained jobs which lasted for more than 13
weeks. Of these, over 160,700 were sustained and unsubsidised.
The cost of NDYP outcomes
2. The Minister told us that the average cost
of each job outcome was just under £4,000. We note that the
average cost of unsubsidised, sustained jobs, which NDYP participants
would not have obtained without the help of the programme, will
be much higher than £4,000 (paragraph 4).
Response: The cost of
each job outcome, quoted by the Minister, was based on the average
amount spent on each New Dealer being £2,000. Since more
than 50 % of young people on the New Deal have so far gone on
to find employment that would mean a cost per job figure of around
£4,000. That figure counts all jobs so far gained from the
New Deal, including those jobs that are not sustained and those
jobs that are subsidised. If we were to count just unsubsidised
and sustained jobs the figure would of course be higher but the
Government believes that the basis for that calculation would
be wrong. Cost per job calculations should include those
young people who move in to unsustained and subsidised employment.
Those jobs are valuable for the young person's job prospects and
future employability.
Ultimately, the cost of New Deal should be judged
on how successfully the programme reduces unemployment and increases
employment and the net effect that has on the economy. Independent
research has shown that New Deal has been successful in helping
to reduce unemployment and increase employment to the extent that
it has substantially paid for itself.
3. Recommendation: We welcome the Government's
commitment to achieving value for money in the NDYP programme.
This is a complex area and one in which independent analysis is
essential. We look forward therefore to the further assessment
of the macroeconomic impact of the programme by NIESR and to the
National Audit Office (NAO) value for money study of NDYP
(paragraph 4).
Response: The macroeconomic
analysis is ongoing and the NIESR report will be published later
this year. Ministers will consider carefully the report's findings.
Work by the National Audit Office on their study
is proceeding and has reached the preliminary study stage.
4. Recommendation: We expect that the NAO's
forthcoming value for money assessment of NDYP will want to examine
the reasons for the inflexible nature of the contracts under which
the private sector led NDYP Units of Delivery have operated and
the cost of this inflexibility (paragraph 5).
Response: Contracts for
private sector led NDYP units of delivery allow them access to
the same level of resources that are available to other units
of delivery. This allows them to apply the resource in ways which
they feel will offer young people in that area the best prospects
of moving into, and staying in, work.
The costs agreed in the contracts were based on initial
planning assumptions of the number of participants who were expected
to enter each element of New Deal and this was then calculated
into a unit cost, generally payable to the PSL UoD on a young
person starting the New Deal. Numbers progressing into the more
expensive elements has been lower than projected originally. In
PSL units this has meant that resources could be transferred to
areas where more appropriate and, in some cases, innovative help
can be given.
The sustainability of jobs obtained through NDYP
5. Recommendation: We are concerned by
the relatively high level of moves into unsustained jobs and this
is an issue that we will return to in our inquiry into NDYP
(paragraph 6).
Response: Seventy-five
per cent of young people who find a job through the New Deal,
find one that lasts for at least 13 weeks. For the twenty-five
per cent of young people whose job is not sustained, the experience
may still transform their confidence, their ability to work, and
their prospects of getting another job with recent work experience
to show to their next employer. Further, when they return to claim
JSA they return to the New Deal where they will receive further
assistance to find that next employer.
The Government's view, therefore, is that jobs that
are not sustained are still of value to the young person. The
point of the New Deal is that it increases a young person's employability
and finds real job opportunities for young people who have been
out of the labour market for some time.
Changes to the design of NDYP
6. We welcome the Government's commitment to improving
the provision in the Gateway. In our inquiry into recruiting unemployed
people we will be examining the role of intermediaries in strengthening
this provision (paragraph 7).
Response: The Government's
memorandum to the select committee's examination into recruiting
unemployed people outlined its support for the use of intermediaries
as a valuable way of building on the support already available
from the ES and, in many cases, adding a local dimension to these
arrangements. As the Policy Action team on Jobs found, there is
not just one way of bridging the gap between those without work
and employers that was better than another —different approaches
worked with different communities.
We therefore want to test the concept of using intermediary
organisations in helping unemployed people move into and keep
good jobs. To achieve this, we have used the Innovation Fund to
promote intermediaries with a particular focus on inner cities
and in specific industry sectors.
Assisting the most disadvantaged people
7. Recommendation: Future developments of NDYP
must be aimed at improving its performance in helping the most
disadvantaged participants and participants from non-white ethnic
minority groups to obtain sustained jobs (paragraph 8).
Response: The Government
agrees. The New Deal has a strategy for achieving equity of outcome
for young people from ethnic minority communities. We are also
looking to increase assistance for those young people at a disadvantage
for example through homelessness or drug dependency. The Employment
Service is working with partners who have expertise in these areas
to build performance. In addition, the New Deal Innovation Fund
has a key objective to assist disadvantaged jobseekers to get
jobs that lead to economic self-sufficiency. Funded projects are
required to achieve significant and measurable performance increases
against the indicator of equality of access and outcomes for ethnic
minority participants.
Delivering enhanced numeracy and literacy
8. We welcome the Minister's personal commitment
to ensuring that nobody leaves NDYP illiterate or innumerate.
We also welcome the use of additional funds to enhance the Gateway
programme and to help train personal advisers in the identification
of basic skills gaps (paragraph 9).
Response: The Government
is committed to addressing the needs of young people who enter
New Deal with poor reading, writing and number skills. We want
to ensure that they receive the most appropriate help and that
their ability is raised to a level that enables them to compete
for jobs and develop their career.
The Employment Service now has a range of initiatives
to help improve the early identification of young people with
basic skills problems including: a Client Progress Grid
with which New Deal Personal Advisers are able to identify young
people who are likely to have difficulty with reading, writing
and the use of numbers; a wide range of Gateway provision to help
young people improve their basic skills; help on New Deal Options
either integrated into vocational training and work experience
or as a separate intensive course for up to 20 weeks prior to
vocational training; training for over 1,000 New Deal Personal
Advisers in the identification of basic skills problems and in
how to provide ongoing support; and volunteer mentors recruited
and trained to provide independent and impartial support for young
people throughout their time on New Deal.
Full-time Education and Training (FTET) Option
9. Recommendation: We recommend that the
Government should publish data on the number of moves into jobs
from the FTET option that are sustained for more than 13 weeks
and for more than 26 weeks (paragraph 11).
Response: The Government
Statistical Service's monthly release of New Deal statistics contains
a table (table 11) which shows the immediate destination of young
people on leaving New Deal by stage of New Deal process reached.
From July 2000, the table has shown job outcomes from the FTET
option along with other New Deal options. It also shows the destination
of young people leaving from follow through by last option entered:
it is important to use the two figures to get a true picture of
option performance since the effect of the option will be felt
both immediately and in the following weeks and months.
The job outcomes from the options and follow through,
by definition, are sustained and last for at least 13 weeks because
if someone leaves and then returns to New Deal within 13 weeks
they return to the programme. For consistency, we believe it is
appropriate to maintain the sustainability job marker for New
Deal we have set at 13 weeks; 26 weeks is too long a sustainability
job marker given the volatility in the labour market that there
has always been for this age group in particular.
Environmental Task Force (ETF) Option
10. Recommendation: We welcome the Government's
recognition that intermediate labour markets have been effective
in increasing the proportion of young people going into work and
we look forward to their increased use in the options stage of
NDYP (paragraph 12).
Response: Intermediate
Labour Markets (ILM), which are currently part of the Environment
Task Force Option, can be successful in preparing young people
for the regular labour market. This is particularly the case where
they are linked to known opportunities with employers or the self-employment
route. Any increase in the volume of the ILM provision depends
upon local demand for such projects and their relevance to local
labour market conditions. Local New Deal partnerships are best
placed to advise, in consultation with the Employment Service,
on the nature of local provision.
Follow-through
11. Recommendation: Changes to the follow-through
stage of the New Deal must take into account the need to provide
a fresh approach for those clients for whom the follow-through
was ineffective the first time around. We welcome the Minister's
indication that proposals have been forwarded to the Treasury
to increase the involvement of personal advisers in the follow-through
stage of NDYP (paragraph 13).
Response: We have been
examining the effectiveness of the Follow-through, and will ensure
that examples of good practice are disseminated throughout the
Employment Service. Improvements to the operation of the Follow-through
will also be developed as part of our overall work to improve
the New Deal. We recognise that, for those who may go through
the New Deal more than once, the Follow-through is a period to
undertake further training or to receive further help to increase
their employability. We are considering further how the Follow-through
might contribute more positively to a fresh approach for young
people embarking on the New Deal again.
Leavers to unknown destinations
12. We welcome the Minister's announcement that
forthcoming survey data of leavers to unknown destinations will
include details of job duration (paragraph 14).
Response: The ongoing
research into leavers into unknown destinations will include data
on job duration. The research should be published early in the
new year.
The involvement of public sector employers
13. Recommendation: In our first report
on the New Deal we welcomed the inclusion of public sector employers
in the subsidised employment option of NDYP and in a subsequent
report on the New Deal Pathfinders we highlighted the lack of
engagement with NDYP by the public sector and some of the reasons
for this outcome. We are very disappointed that, almost two years
on, the public sector has not proved more willing to offer job
opportunities to NDYP participants. We welcome the Government's
commitment to improving the performance of the public sector,
and we urge the Government to bring forward plans to explain how
its expectations of raising, from 1.2 per cent to 2 per cent,
the percentage of employees across the Civil Service who are recruited
from NDYP shall be met (paragraph 16).
Response: We agree with
the New Deal Task Force that rather than focus on national targets
for public sector organisations or sub sectors eg (Civil Service
departments), it is preferable, following discussions with local
ES offices, for organisations at the local level to set themselves
targets for New Deal recruitment. There are some excellent examples
where the public sector is making strenuous and successful efforts
to recruit from the New Deals. Whilst many in the public sector
feel a sense of social responsibility to participate, many public
sector employers see the strong business case for their commitment
to New Deal. Many also realise that in labour markets with very
high rates of structural unemployment, and fewer private sector
opportunities, their role is likely to be particularly significant.
Over 4,000 young people have now been offered opportunities by
local authorities with some 30% signing employers agreements.
Work with the Civil Service continues to be encouraging.
Recruitment practices are under review, and the Employment Service
continues to work closely with the Cabinet Office in diverse activities
to raise awareness and increase New Deal job starts. In March
this year they jointly delivered a successful one day workshop
for over 50 departments and agencies to discuss New Deal recruitment
issues. As a direct result of this event, a Development Forum
has now been established to improve dissemination of good practice
across the Civil Service. ES Large Organisations Unit has worked
with 20 key departments to improve the quality of management information
available on previously unidentified unsubsidised job starts.
As a result, recently published figures show nearly 3,000 Civil
Service job opportunities have now been filled by New Deal candidates.
The last quarter has shown an increase from 1.2% to 1.3%. The
Minister for the Cabinet Office wrote to Cabinet colleagues in
June to advise them of the improved position and reaffirmed the
need for continuous effort, particularly from those departments
with no or few New Deal employees to date.
The performance of the private sector-led NDYP
Units of Delivery
14. Recommendation: The Government has
announced that it intends to publish a qualitative study of the
10 private sector-led NDYP Units of Delivery which involved "interviews
with key players about how the New Deal is being delivered".
Although we welcome this announcement, in our view, a full evaluation
of the private sector-led Units of Delivery should be undertaken
and published, which compares the performance of the private sector-led
Units of Delivery with the performance of the other NDYP Units
of Delivery. It would be useful to have such an evaluation in
the public domain before the completion of the new contracting
round (paragraph 17).
Response: A qualitative
approach was adopted to make the best use of resources, and to
meet the time constraint of making findings available by the end
of this financial year. It was also felt that this approach would
help ES make the best decisions when entering into future contracts.
The qualitative study covers the performance of the private sector-led
Units of Delivery, as well as highlighting good practice and lessons
learnt.
Personal Advisers
15. Recommendation: We welcome the Minister's
commitment to improving the career opportunities for personal
advisers. Firm proposals to achieve this aim should be brought
forward at the earliest opportunity and we recommend that the
Government should consider introducing reduction in turnover targets
for those areas where turnover is particularly high. In addition,
we recommend that the Government should publish every year turnover
rates for each Jobcentre (paragraph 18).
Response: A new post of
"senior adviser" will be trialled this year in 37 locations
across the country. These new posts offer both a route of progression
within advisory work for the best and most experienced advisers
and a source of support and coaching for other advisers. They
continue to maintain their own caseload and as part of that will
often deal with the more difficult clients. The effectiveness
of senior advisers will be evaluated in order to inform a decision
about their wider use.
The Government does not consider it worthwhile to
publish turnover rates for each jobcentre. Many staff leave one
jobcentre to take up a post in another office in the same district
and region. Several offices are also small by comparison to the
larger inner city offices and no significant comparable trends
could usefully be gained. It would be more appropriate to look
at trends in staff turnover on a district and regional basis.
ES have recently introduced a new Human Resources data collection
system which will enable more robust information to be provided
in the future. This information will show staff turnover on both
a district and regional level and should provide an indication
of trends that will be monitored by ES Personnel staff.
The evaluation of NDYP
16. Recommendation: We commend the Government
for instituting such a comprehensive programme of evaluation.
We recommend that summaries of the research reports should be
posted on the New Deal web-site (paragraph 19).
Response: Full evaluation
reports, with Executive summaries, are now being published on
the Employment Service's web site at www.employmentservice.gov.uk/research/publications.htm
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