8 Termination and transition arrangements
Impact of terminating the FJF
92. In May 2010, the Coalition Government announced
that it would be cancelling the planned extension of the Future
Jobs Fund to March 2012. DWP has stopped accepting any further
bids from providers and there will be no new entrants beyond March
2011.[117]
93. The decision to terminate the programme early
will withdraw FJF opportunities that young people would have received
in the period from late 2010 to March 2012. Many providers have
indicated that they had already provisionally created FJF jobs
which will not now be taken up by young people, therefore disappointing
employers and young people. Witnesses expressing this view included
Wales Council for Voluntary Action, Sandwell Metropolitan Borough
and the Creative Development Consultancy.[118]
94. The cancellation of the FJF coincides with
an increase in long-term unemployment among young people. Data
from the Office for National Statistics (ONS) showed that 189,000
18-24 year olds had been unemployed for over 12 months in the
period July-September 2010, compared with 171,000 in July-September
2009, and 109,000 in July-September 2008[119].
A recent report published by the Prince's Trust indicated that
the number of 16-24 year olds claiming Jobseeker's Allowance for
12 months or longer increased from 5,840 claimants in September
2008 to more than 25,800 claimants in September 2010.[120]
95. A significant number of witnesses highlighted
the role they considered FJF had played in reducing the number
of young people who are "Not in Education, Employment or
Training" (NEETs).[121]
For example, Manchester City Council believed that the impact
of withdrawing the FJF would be an increase, or reduction in the
decrease, in youth unemployment.[122]
Stoke-on-Trent City Council stated that the number of young job
seekers fell by 23% over the FJF period, whereas the number of
job seekers as a whole only fell by 16% during the same period.[123]
The Association of Greater Manchester Authorities claimed that
"a further year of FJF could have meant an additional £35m
circulating in wages and a further decrease on the levels of youth
unemployment in Greater Manchester".[124]
96. Witnesses such as Glasgow Works indicated
that the early termination of FJF would leave a notable gap in
provision to a group which already faced disadvantage. They believe
that unemployed young people aged 18-24 who have been unemployed
for over six months will face a particular challenge competing
with more experienced job seekers.[125]
97. However, Working Links (an organisation that
helps people find employment and provides training opportunities),
felt that the decision to terminate the FJF early might turn out
to be beneficial to their customers in the long run. They argued
that the new Work Programme is an opportunity to ensure that there
is no repetition or duplication in the system that might confuse
customers. They also felt that the focus should be on young people
acquiring the "skills, confidence, motivation and ability
to secure long term, sustainable employment".[126]
Transition to the Work Programme
98. Referrals to the Future Jobs Fund will cease
by March 2011, and the final participants are expected to finish
their FJF posts by September 2011. The Minister confirmed that
the target date for the full launch of the Work Programme is June
2011.[127] This leaves
a potential gap in targeted employment programmes for young people.
99. Given the significant increase in youth unemployment
since 2008, as highlighted by the ONS statistics referred to previously,
we were concerned that the potential gap between the FJF and the
Work Programme may lead to a substantial number of unemployed
young people failing to receive any specialist support.
100. The Minister told us that the full provision
of the Work Programme from June 2011 in all local areas would
depend on which organisations are successful in the bidding process:
"Where an issue will arise is in a part of the county where
there is no current provision from the people who are successful
in getting on to the Framework and then getting the individual
pieces of the Work Programme".[128]
He said that, where a Flexible New Deal provider in a particular
area was successful in winning a Work Programme contract in that
area, the transition to the Work Programme would be easier.[129]
101. However, it is important to note that around
half of the country does not have a Flexible New Deal provider
in place. The Flexible New Deal was due to be rolled out in two
phases, and the first phase was introduced in October 2009. The
Coalition Government cancelled the implementation of the second
phase as part of its plans to introduce the Work Programme. Areas
that were part of phase two of the Flexible New Deal programme
might therefore be at a disadvantage, as the Work Programme is
less likely to be implemented so quickly there. Mr Grayling emphasised
that where gaps arise in provision, the Government will, if necessary,
"deploy the resources of Jobcentre Plus to fill in the gaps
or [...] make additional arrangements in parts of the country
where there is a particular problem".[130]
102. We were interested in exploring options
to extend the Future Jobs Fund in areas where the Work Programme
might not be available at an early stage. In her oral evidence,
Tracy Fishwick pointed to the use which might be made of "rolled
up weeks" to fund continued FJF provision during the transitional
period.[131] "Rolled
up weeks" arise where an FJF employee does not stay on the
FJF programme for the full six months, which means that the full
potential funding is not drawn down. However, Mark Fisher from
DWP told us that the Department's financial modelling assumed
that some FJF jobs would not last six months and that there was
not an allocation of unspent funding that could be used to extend
the FJF programme until the Work Programme was fully operational.[132]
103. We are concerned that the
transitional arrangements between FJF ending and the Work Programme
being fully established will mean that young people are not offered
targeted employment programmes for some time. It has been demonstrated
that periods of unemployment are detrimental to young people's
future prospects and that the longer the period out of work, the
more serious the damage to their job prospects. The cancellation
of the FJF has also coincided with increased levels of unemployment
amongst young people. It is therefore essential that addressing
youth unemployment is given appropriate prominence within the
Government's welfare-to-work policies. We intend to pursue the
issue of the continuation of provision in our Work Programme inquiry.
104. We expect DWP to ensure
proper transitional arrangements are in place and to monitor provision
for young people in the period before the Work Programme is fully
implemented. We recommend that it record, and publish on its website
in October 2011, the following information in relation to unemployed
young people who would have been eligible for the Future Jobs
Fund:
- the number receiving welfare-to-work
services between January 2011 and the introduction of the Work
Programme;
- the number receiving services
for the first three months after the introduction of the Work
Programme, showing how these numbers vary across geographical
areas (to indicate variations between areas which currently do
and do not have Flexible New Deal contractors); and
- the actions the Department has
taken in mitigation if the numbers are substantial or if there
is significant variation across regions.
Ensuring the Work Programme supports
those furthest from the labour market
105. The Future Jobs Fund was designed to support
young people at risk of long-term unemployment. These young people
may face significant obstacles to finding permanent work, including
a lack of qualifications and experience as well as social and
personal barriers to work. It is important that the Work Programme
provides a targeted service for these individuals, rather than
simply focusing on individuals who face fewer barriers to work
and are easier to place in jobs.
106. The Minister stated that unemployed young
people who would have been referred to the FJF will in future
be referred to the Government's new Work Programme.[133]
However, on current available information it appears that young
people who have completed an FJF post but who have not found permanent
employment will not become eligible for the Work Programme straightaway.
The Minister told us that the Department was still considering
evidence on when exactly they will be eligible for the Work Programme.[134]
107. The Work Programme will adopt a "black
box" model, through which providers will be free to decide
which types of welfare-to-work programmes to use and will be paid
on the basis of employment outcomes. Professor Paul Gregg suggested
that there were risks within the black box model, arguing that
providers might focus on the easiest people to help. This problem
of "creaming and parking" was highlighted by our predecessors
in their Report earlier this year on contracted employment programmes.[135]
Professor Gregg called for guarantees within the Work Programme
to ensure providers supported all client groups.[136]
108. Ensuring contracted employment
programmes meet the needs of those furthest from work, as well
as the easiest groups to place, has been a challenge for governments
in the past and this will be equally true under the Work Programme.
The Government must ensure that the differential payments arrangements
within the Work Programme create a sufficient incentive for providers
to deliver appropriate support for longer-term unemployed young
people, including the low-skilled and those without any work experience,
who are currently targeted by the Future Jobs Fund. We will pursue
this as part of our forthcoming inquiry into the contracting arrangements
for the Work Programme.
Local partnerships developed
by the FJF
109. Public and voluntary sector organisations
emphasised that they had formed useful partnerships through the
FJF which the Work Programme should build on. For example, Barnado's
argued that "by ending the programme without a clear, structured
replacement in place, there is a danger that the momentum, relationships
and the goodwill of partners created through this programme will
be lost".[137]
110. The Government is establishing an umbrella
arrangement of approved providers (known as the Framework) which
will be used to deliver the Work Programme. The Wales Council
for Voluntary Action argued that:
The Work Programme if it is to be successful will
require prime contractors to embrace a partnership approach working
with the third sector and smaller, more specialised, local organisations
to deliver employment related support which meets the needs of
young people.[138]
However, some local authorities and voluntary and
community sector organisations are concerned that they do not
have the capacity to become providers under the Work Programme.
They believe that the contracting process for the Work Programme
will only be accessible to large-scale private sector companies
and that the partnerships between local authorities and the voluntary
sector which have developed under the FJF will not be built upon.[139]
111. Liverpool City Region argued that the local
employability partnerships developed through the FJF could play
an important role in the Work Programme by brokering specific
types of intervention for young people and through combining local
resources.[140] Manchester
City Council stated that the best results for young people are
delivered when employment and skills support is delivered to individuals
with other services built in as an essential component to meet
individual and community need.[141]
112. The Minister told us that he would encourage
Work Programme providers to build on local partnerships:
One of the messages I've given to the applicants
for the Work Programme framework is that I would expect them,
as a matter of routine, to have close working partnerships with,
for example, local authorities, who've been one of the key partners
in the Future Jobs Fund.[142]
113. Valuable local partnerships
have been built up under the Future Jobs Fund which draw on knowledge
of local labour markets and the needs of communities. The Government
has promised that it will ensure that this expertise is not lost
as the Work Programme is rolled out. We will use our forthcoming
inquiry into the contracting arrangements for the Work Programme
to explore how the Government plans to meet this commitment.
117 Ev 50 para 1.6. Back
118
Ev w13; Ev w17; Ev w59 and Ev w2 Back
119
Office for National Statistics, Labour Market Statistics,
Statistical Bulletin, November 2010 Back
120
The Prince's Trust, The cost of exclusion: Counting the cost
of youth disadvantage in the UK, 2010 Back
121
For example: Social Enterprise Solutions, Ev w10; Wales Council
for Voluntary Action, Ev w13;Wakefield Council, Ev w19; National
Children's Bureau, Ev w24, and Glasgow City Council and Glasgow
Works, Ev 55. Back
122
Ev w222 Back
123
Ev w31 Back
124
Ev w219 Back
125
Ev 55 Back
126
Ev w122 Back
127
Q 146 Back
128
Q 146 Back
129
Q 140 Back
130
Q 148 Back
131
Q 88 Back
132
Q 151 Back
133
Q 107 Back
134
Q 150 Back
135
Work and Pensions Committee, Fourth Report of Session 2009-10,
Management and Administration of Contracted Employment Programmes,
HC 101 Back
136
Q 71 Back
137
Ev w185 Back
138
Ev w13 Back
139
For example: Sandwell Metropolitan Borough, Ev w13; Norfolk County
Council, Ev w62; Association of Colleges, Ev w77; Groundwork UK,
Ev 57; Novas Scarman, Ev w89; Redcar and Cleveland Borough Council,
Ev w95, and Barnsley Metropolitan Borough Council, Ev w107 Back
140
Ev w151 Back
141
Ev w222 Back
142
Q 193 Back
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