1 Introduction
The Future Jobs Fund and the Young
Person's Guarantee
1. The Young Person's Guarantee was first announced
in the Budget in April 2009, with the aim of addressing youth
unemployment which was rising in 2008 and 2009 as a result of
the economic downturn. Overall unemployment increased from 1.6
million in the three months to March 2008 to 2.5 million in the
three months to December 2009. Unemployment among 18-24 year
olds during the same period increased from 509,000 to 725,000.[1]
Through the Young Person's Guarantee, the Government pledged:
"A guaranteed job, training or work placement for all 18-24
year olds who reach 12 months unemployed to ensure no young people
are left behind due to long-term unemployment."[2]
2. In September 2009, the Future Jobs Fund (FJF)
was announced as one of the programmes through which the Government
intended to deliver the Young Person's Guarantee. Funding of around
£1 billion was pledged to the FJF, to be spent between October
2009 and March 2011. This was intended to support the creation
of 150,000 temporary jobs, primarily for 18-24 year olds who had
been out of work for at least six months.[3]
3. In December 2009, the Government's White Paper,
Building Britain's Recovery: Achieving Full Employment,
set out further details of the Young Person's Guarantee.[4]
The Guarantee was introduced initially as a voluntary scheme
before becoming mandatory on 26 April 2010. Young people who had
been claiming Jobseeker's Allowance for six months were guaranteed
an offer of a job, training or work experience and were required
to commit to 13 weeks of activity. The opportunities offered within
the Guarantee included the Future Jobs Fund, Routes Into Work
(pre-employment training), Work Focussed Training and the Community
Task Force (the work experience element of the Guarantee).[5]
4. The Future Jobs Fund was described by the
Government as a "challenge fund" through which local
authorities and other organisations could bid to create jobs.
Its initial aim was to generate 100,000 job opportunities for
young people on Jobseeker's Allowance and 50,000 job opportunities
for adults on any benefit in areas with high rates of unemployment.
Its intention was to enable local organisations to address youth
unemployment, as well as worklessness among disadvantaged groups
such as people with learning disabilities or mental health conditions,
offenders and care leavers.[6]
5. As part of the March 2010 Budget, the previous
Government extended the FJF programme for an additional year to
March 2012, increasing the number of proposed FJF places to around
200,000.
The design of the FJF programme
6. The programme was managed by the Department
for Work and Pensions (DWP) in partnership with the Department
for Communities and Local Government and with involvement from
Jobcentre Plus and the Government Offices for the English Regions.
National organisations and local and sectoral partnerships were
invited to bid to create FJF jobs. From the initial 150,000 jobs
that the Government planned to fund, they required at least 10,000
to be green jobs and at least 15,000 to be jobs in social enterprises.[7]
7. The minimum criteria for the FJF jobs were
as follows:
- each job was at least 25 hours
a week and the jobs were paid at least at the minimum wage;
- the Government's contribution was a maximum of
£6,500 for each job;
- the jobs were required to be "additional"
posts; ie posts that would not exist without the FJF funding and
that would not otherwise be filled by the employer as part of
their core business;
- the jobs were required to last at least six months;
- the work must benefit local communities; and
- providers were required to provide support for
employees to move them into long-term, sustained employment.[8]
The termination of the FJF programme
8. As part of its savings measures to address
the UK deficit, the Coalition Government announced in May 2010
that it would save £320 million by ending "ineffective"
elements of employment programmes, including the further provision
of temporary jobs through the Young Person's Guarantee.[9]
The plans to extend the Future Jobs Fund to 2012 were therefore
cancelled, and the Government indicated that no new entrants would
be permitted beyond March 2011. DWP stopped accepting any further
bids for the programme from providers, but stated that existing
guarantees would still be met.
The inquiry
9. We were interested in exploring the extent
to which the FJF had been successful in tackling youth unemployment,
not only in terms of addressing the short-term labour market problems
caused by the recession, but also in supporting unemployed young
people to find permanent jobs. We also wanted to examine the Government's
rationale for terminating the programme a year earlier than planned;
to assess the likely impact of this decision; and to examine
the alternative measures the Government planned to introduce to
ensure that young people continue to receive effective welfare-to-work
services following the discontinuation of the FJF.
10. Our inquiry therefore focused on the following
issues:
- the extent to which the FJF
has succeeded in matching new work experience opportunities to
young unemployed people;
- the strengths and weaknesses of the FJF programme
from the perspective of providers (including in the third sector),
employers and young unemployed people, and particularly in relation
to the long-term sustainability of employment opportunities;
- the likely impact of the decision to end the
FJF in March 2011 rather than March 2012; and
- how the transition from the FJF to the Work Programme
will be managed, including the part to be played by the Government's
proposal to fund new apprenticeships.
11. We received 78 submissions from a range of
individuals and organisations. We took oral evidence from local
authority partnerships and other providers; the Confederation
of British Industry; Paul Gregg, Professor of Economics, University
of Bristol; Tracy Fishwick, Associate of the Centre for Economic
and Social Inclusion; and the DWP Minister, Rt Hon Chris Grayling
MP, and Government officials. A full list of witnesses is set
out at the end of the Report.[10]
We also visited the Centrepoint service in Camberwell, London.
We are grateful to all those who contributed to our inquiry.
12. We would also like to thank our Specialist
Advisers for this inquiry: Dr Richard Dorsett, Director of Policy
Evaluation at the National Institute of Economic and Social Research,
and Professor Alan McGregor, Director of the Training and Employment
Research Unit at the University of Glasgow.[11]
We very much appreciate the contributions they made to our
work.
1 Office of National Statistics data, summarised in
House of Commons Library, Young Person's Guarantee, SN/EP/5352,
2010, available from www.parliament.uk Back
2
HM Treasury, Budget 2009, HC 407, Chapter 5, p 87 Back
3
Department for Work and Pensions, Guide to the Future Jobs
Fund, 2009, p 1 Back
4
HM Government, Building Britain's Recovery: Achieving Full
Employment, Cm 7751, December 2009 Back
5
Ev 49 Back
6
HM Government, Building Britain's Recovery: Achieving Full
Employment, Cm 7751, December 2009, p 37 Back
7
Department for Work and Pensions, Guide to the Future Jobs
Fund, 2009, p 1 Back
8
Department for Work and Pensions, Guide to the Future Jobs
Fund, 2009, p 2 Back
9
HC Deb, 26 May 2010, col 3WS Back
10
See page 45 Back
11
Relevant interests of the specialist advisers were made available
to the Committee before the decision to appoint them on 8 September
2010.The Committee formally noted that Dr Dorsett and Professor
McGregor declared no interests relevant to the Committee's work.
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