Youth Unemployment and the Future Jobs Fund - Work and Pensions Committee Contents

Conclusions and recommendations

Outcomes for young people

1.  Despite falling behind its initial target, the Future Jobs Fund created a significant number of temporary jobs for unemployed young people on a national scale. However, it is too early to assess the extent to which the programme has supported young people in finding permanent employment. (Paragraph 29)

2.  It must be borne in mind that the FJF was an emergency measure to tackle a particular peak in youth unemployment. We regard the wider benefits which many young people gained from the programme in terms of work experience, confidence and self-esteem and the likely consequent impact on their future employability, as another indicator of the effectiveness of the programme. (Paragraph 30)

Evaluation and monitoring arrangements

3.  We believe that DWP should conduct a robust and comprehensive evaluation of the FJF and publish the findings. We recommend that the evaluation include an analysis of the experiences of local implementation of the programme, an assessment of the impact of the FJF on long-term employment and benefit payments (as recorded in DWP databases) and a detailed cost-benefit analysis. The evaluation method should also be published to ensure the transparency and credibility of the process. (Paragraph 34)

4.  We believe that ongoing assessment of the FJF programme at a local and national level may have been more informative if effective systems had been available to monitor participation and employment outcomes from the outset. (Paragraph 38)

Effectiveness and value for money

5.  A robust evaluation of the FJF has yet to be undertaken. While we accept the Government's need to make savings to address the public spending deficit, it is our view that insufficient information was available to allow the Department to make a decision to terminate the FJF if this decision was based on its relative cost-effectiveness. It is important that DWP carries out cost comparisons for welfare-to-work programmes on a like-for-like basis. In particular, statistics should clearly show what payments, including benefit payments, individuals on each programme are receiving, to reflect the full cost to government. (Paragraph 48)

6.  While many graduates gained valuable experience through participating in the Future Jobs Fund, it is not clear to us that such an intervention is as cost-effective for this client group as it might be for those facing significant personal barriers to finding work. (Paragraph 52)

7.  We accept that interventions like the FJF represent a more expensive option, even when adjusted to take account of the fact that Jobseeker's Allowance is not paid to FJF workers. However, despite the relatively high cost, programmes such as the FJF may still be a cost-effective option for young unemployed people who are furthest from the labour market, and who are less likely to benefit from other less intensive approaches. (Paragraph 53)

8.  Comparing the effectiveness of welfare-to-work programmes is complex, given the differences in approach, funding, labour market circumstances and the characteristics of previous programmes. The evidence is limited and does not offer a clear consensus. We expect the Government to use the findings from the Future Jobs Fund evaluation to contribute to the wider evidence base used to assess which types of programmes are most effective in tackling youth unemployment. (Paragraph 59)

Benefits for employers and communities

9.  Overall, employers were impressed by the young people they recruited through the FJF and believed that they had benefited significantly from the contributions made by these individuals. As a result of the programme, recruitment methods in some organisations have already been altered to make it easier for employers to recruit young people who lack experience. The Government, working through Jobcentre Plus and its Work Programme, should consider how it can encourage more employers to open up their recruitment processes to young people who lack experience but who have the capacity to make a valuable contribution. (Paragraph 64)

10.  It is clear that communities and community organisations benefited significantly through their employment of FJF workers. The programme had a positive impact across the country in terms of enhancing the scale and the quality of services in the voluntary and community sector. We welcome these positive outcomes and regard it as unfortunate that the benefits may be lost with the withdrawal of the FJF. However, the community benefits must be considered in the context of the overall cost of the programme. Moreover, it should be borne in mind that the Future Jobs Fund was designed to be a temporary measure and these benefits were only ever intended to be experienced over a short period. (Paragraph 67)

Involvement of the private sector

11.  It is important that EU state aid rules are not perceived as a barrier to private sector involvement in employment programmes. The Department should clarify exactly what is and is not allowed under state aid rules for employers in the private sector when employing young and disadvantaged people using a government subsidy, and produce a simple guide to help build confidence of employers. (Paragraph 77)

12.  We accept that the Department felt obliged to design and implement the FJF programme rapidly, given the labour market conditions at that time. However, we believe that the Department needs to take into account that engaging private sector organisations requires more time than was allowed for within the FJF programme. In future welfare-to-work programmes, a balance needs to be struck that takes advantage of the different strengths of the public, private and voluntary sectors. Given the proposed severe cut backs in public sector jobs, the Government will be much more reliant on the private sector to provide the jobs necessary to meet its targets for moving people off benefits and into work. (Paragraph 81)

Lessons learned from the programme

13.  We accept that the FJF programme was, by necessity, implemented at speed, and that some teething problems were inevitable. The recession meant that Jobcentre Plus offices were already under significant pressure at the time the scheme was rolled out. Nevertheless, many provided an admirable service in delivering the FJF programme and we congratulate those JCP staff on this achievement. (Paragraph 89)

14.  We do however have some concerns. Some young people were not properly prepared for the application and interview process. Jobcentre Plus has a clear role to play in supporting candidates in the application process, including the preparation of CVs and developing interview skills, and in ensuring that employers receive accurate information about candidates. DWP must ensure that JCP has the necessary resources and support to provide this service. (Paragraph 90)

15.  Jobcentre Plus will be required to play a significant role in implementing the Work Programme. The Department must ensure that managers and frontline staff are properly prepared for this and other new programmes so that support is delivered to a high and consistent standard across the network of JCP offices. We will return to this issue as part of our forthcoming inquiry into the contracting arrangements for the Work Programme. (Paragraph 91)

Termination and transition arrangements

16.  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 (Paragraph 103)

17.  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. (Paragraph 104)

18.  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. (Paragraph 108)

19.  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. (Paragraph 113)


20.  We welcome the increased funding for and increased number of apprenticeships and expect the Government to ensure that, where appropriate, these opportunities are made available to unemployed young people previously targeted by the FJF. (Paragraph 119)

21.  We recommend that, in response to this Report, the Government provides us with statistics on:

  • the number of apprenticeship starts planned for January to June 2011 compared with the corresponding period in 2010; and
  • the number of these apprenticeships expected to be taken up by 18-24 year olds who were previously unemployed for six months or more. (Paragraph 120)

22.  We are concerned that apprenticeships may not be the most suitable route into employment for those young people at the highest risk of long-term unemployment. These young people may have left school with no qualifications, have no experience of work, or have difficult family circumstances, and in some cases they may not be ready to start an apprenticeship. We are keen to ensure that alternative provision (for example, personal support, training and work opportunities) should be available to help those who are not ready for an apprenticeship. (Paragraph 121)

23.  The DWP and Work Programme providers should consider how to attract those furthest from the labour market to apprenticeships and how to encourage employers to take on such individuals as apprentices. We recommend that the Government looks closely at the lessons to be learned from the Future Jobs Fund in terms of the most effective ways to prepare such individuals for apprenticeships. (Paragraph 125)

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