Written evidence submitted
by Association of Learning Providers
SUMMARY
I. There is little doubt that the Future Jobs
Fund (FJF) succeeded in its stated purpose of putting young people
into work. (Para 1)
II. Particularly in its early stages it was felt
that some jobs being filled under it did not meet the stated conditions,
particularly regarding "community benefit" and/or took
account of possible job displacement. (Paras 2-4)
III. FJF, limited placement funding to six months,
thereby conflicting with other contemporaneous models of welfare
to work programmes that emphasised job sustainability above all
else. (Para 6)
IV. It was disappointing that no mandatory training
element was included in the design of FJF placements. (Paras
6/7)
V. Funding was very limited and in many - if
not most - cases led to the delivery of an unviable programme.
(Paras 8-11)
VI. FJF compromised referrals to other strands
of welfare to work provision, thereby creating sometimes severe
operational and viability problems in these as well. (Para
12)
VII. The impact of the abolition of the extension
of FJF is unlikely to be marked. The impact of its abolition in
more general terms will be difficult to assess until the replacement
elements of the Work Programme are underway. (Paras 13-18)
VIII. If the rationale for the abolition of FJF
is that Apprenticeships do the same job but better, then in order
for this to be the case Apprenticeships need to be more firmly
integrated into the planning model for the Work Programme than
they currently are. (Paras 19-20)
THE EXTENT
TO WHICH
THE FJF HAS
SUCCEEDED IN
MATCHING NEW
WORK EXPERIENCE
OPPORTUNITIES TO
YOUNG UNEMPLOYED
PEOPLE
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
1. There is little doubt that the Future Jobs
Fund (FJF) succeeded in its stated purpose of putting young people
into work. It was always intended to be a relatively short-term
response to the recession in order to provide some form of work
experience for young people, rather than a fixture of the welfare-to-work
(W2W) armoury, and it appears to have been treated as such by
providers participating in it.
2. That said, what has been evident from speaking
to members involved in the programme was its popularity with the
young people that undertook it. The employment found under FJF
has generally been felt to be worthwhile, and because it was waged
rather than undertaken on a voluntary work experience basis, has
meant that the roles have given the young people concerned very
valuable experience and skills, and credible references to use
in any subsequent jobsearch.
3. Some members noted that, particularly in the
early stages, many of the jobs that were on offer tended to be
"swept up" by unemployed graduates, although over time
this tendency was replaced by more success for more disadvantaged
and/or under-qualified groups. Whether or not this could be perceived
as a weakness in the policy is debatable, given the numbers of
graduates currently struggling in the employment market, but it
is likely that it was not an intended outcome of the programme.
4. It was evident, particularly in the early
stages, that many jobs being advertised under the FJF did not
seem to meet the requirement that it should not displace other
work and should be of "community benefit". We are aware
for example of one case in which an Executive Personal Assistant's
job within a local authority was advertised under the FJF, which
somewhat stretched the definition of "community benefit",
and seemed to completely ignore the possibility of job displacement.
This sort of example led to some initial criticism that some placements
were being "waved through" for political purposes rather
than because they filled the stated policy aims of the programme.
It does seem however that after a period of time this tendency
abated, with later vacancies much more of the nature originally
envisaged.
5. Related to this there was also the tendency
for many FJF jobs to be placed in the public sector - usually
local government. This was not in itself a bad thing, but given
the current government's approach to public expenditure it seems
unlikely that FJF could succeed in the current climate without
a reasonably significant reconfiguration.
6. A concern with any "sheltered" project
like this is the sustainability for the clients, and in this case
at the end of the programme there was no aftercare / continuation
for those unable to progress within the timeframe. The fact that
the longevity of the jobs was limited (in terms of funding) to
six months sent a slightly mixed message, given that it came at
the same time that the government was promoting the idea of sustained
employment becoming central to funding provision under W2W programmes.
In fairness, and as stated before, it was always promoted as a
short-term measure in response to particular circumstances, but
even so it was disappointing that there was no requirement for
any form of training within the period funded. This would have
been an excellent opportunity not only to try and ensure young
people were not totally lost to the labour market at a time of
severe recession, but also to provide training whilst this was
happening. This could have been funded by levering in other funding
streams such as Train to Gain, for example.
7. However, the fact there was no such requirement
meant that in the vast majority of cases it just did not happen,
although jobsearching sessions and support were generally undertaken.
In policy terms we view this as a regressive step when it is clear
that there is an imperative to ensure that our working age population
is employed and trained, not only to boost productivity but in
order to raise the likelihood of sustained (or repeat) employment.
8. The funding for FJF placements (£6,500)
looked initially attractive; however over time it was found to
be only marginally viable at best, and indeed many providers ran
it at a loss. For example, a young person aged between 18 and
21 on the minimum wage of £4.83 for 35 hours a week would
use around £4,400 of that funding. Those aged 22-24, on the
higher minimum wage of £5.80 would use up around £5,300
of the funding. From the balance - £2,100 or £1,200
respectively - the provider needed to cover the costs of overheads,
of finding and setting up the placement, and of maintaining it
and supplying jobsearch etc capabilities during this time.
9. Employers were also on occasion hampered in
their efforts to "do the right thing" for young people
on placement with them by the limited funding available, some
of which had already necessarily been "top sliced" by
the provider to pay for their costs. For example, one reported
to us that :
a. "Our young people came with only £500
of funding on top of their salary, leaving us to pick up the bill
for equipment, materials, training and welfare. This did make
the task of supporting young people more difficult and we were
unable to dedicate a mentor to them as initially planned. ....
it was our stance to take on some of the harder-to-help candidates,
and consequently we .... had to divert resources from other work
to give them the necessary coaching and pastoral care to ensure
retention and progression." [30]
10. Another weakness of the financial model was
that it did not employ the "rolling-up" method that
other contemporaneous W2W models were using. Under this model,
where a young learner left a scheme early to go into work the
provider could "roll up" and claim the balance of unused
funding. This would have made the programme overall more viable
and have incentivised providers to convert limited six-month placements
into sustainable employment at the earliest opportunity. As it
was, there was no incentive for them to do anything other than
to let placements run their course, and (as wages were being funded)
no incentive on the employer to change the situation either.
11. Most providers who ran this programme therefore
did so on what amounted to shoestring budgets, and in many cases
continued to do so merely from the social motivation of "doing
the right thing" for their young people rather than because
it was viable. In the longer-term this could not be a sustainable
model, and indeed it was so marginal that it is surprising that
it was as successful as it proved to be in its short existence.
12. Another problem that became evident was that
the FJF conflicted with other models of W2W provision. The relatively
early eligibility of young people for FJF in their period of unemployment
meant that significant numbers of young people that were forecast
to run into Flexible New Deal (FND) Phase 1 areas did not do so,
and this contributed to some significant difficulties in getting
the FND under way, with many providers not receiving the numbers
of referrals they had envisaged and thus suffering financially
as a result. This in turn meant that much "firefighting"
had to take place to trim FND offers in a very short space of
time, at the same time as they went live, using the actual volumes
being referred instead of the higher volumes that had been forecast
by DWP for many months previously. This led to considerable disquiet
and criticism of DWP, and an avoidable destabilisation of the
provider infrastructure.
THE LIKELY
IMPACT OF
THE DECISION
TO END
THE FJF IN
MARCH 2011 RATHER
THAN MARCH
2012
13. Given that FJF was originally due to end
in March 2011 in any case before its extension to March 2012 in
the first 2010 budget, it seems that this is merely the original
plan being reinstituted. The original extension though did promise
a widening of access to the FJF beyond 18-24 year olds - for example
to ESA claimants - and this was welcome (subject to the reservations
on funding expressed above).
14. The impact of the decision to abolish FJF
is therefore unlikely to be accurately judged until any replacement
programme is under way, (for example as highlighted in paragraph
15 below). The plans for the incoming Work Programme promise to
better cover the needs of a wider cohort of unemployed jobseekers.
It is to be hoped that this indeed proves to be the case, in which
case the opportunity cost of the abolition of the FJF will be
minimised.
HOW THE
TRANSITION FROM
FJF TO THE
WORK PROGRAMME
WILL BE
MANAGED, INCLUDING
THE PART
TO BE
PLAYED BY
THE GOVERNMENT'S
PROPOSAL TO
FUND NEW
APPRENTICESHIPS.
15. There is a question about whether, as has
been claimed, the extension of Apprenticeships is actually a suitable
replacement for the FJF. Given that the main benefits of the FJF
were for young people who were previously unable or unwilling
to join Apprenticeships programmes, it has to be questioned how
true this will prove to be. If the rationale that an Apprenticeship
is basically just an FJF job with training that is more likely
to sustain, then this somewhat underestimates the complexity of
an Apprenticeship and the commitment required to complete it.
Many unemployed 18-24 year olds are simply unable, for a wide
variety of reasons, to access Apprenticeships and unless this
situation is resolved then the loss of the FJF will be marked
for them.
16. Certainly one of the plus points of the abolition
of FJF in the view of our members is the resulting increase in
the availability of Apprenticeship places that this has made possible.
As Apprenticeships are now strictly employed-status only, the
link between employment and skills is increasingly being thrown
into relief, and the incentive for W2W providers to utilise the
expertise of Apprenticeship providers in engaging employers is
very clear. In itself, this will encourage a more integrated,
coherent and efficient usage of the wider provider infrastructure
in achieving the aims of welfare to work programmes, rather than
merely engineering processes to achieve the blunt aim of "a
job - any job".
17. There are no major operational difficulties
from the provider perspective of transitioning from FJF to Apprenticeship
provision because for the most part they will have been delivered
by different types of providers - as we alluded to above, the
cohorts accessing FJF and Apprenticeships will probably only marginally
coincide therefore it is unlikely that the same companies are
likely to be running FJF down at the same time as extending Apprenticeship
provision. Any operational difficulties that arise are therefore
more likely to be of a nature that would emerge from the closure
or start-up of any strand of provision, rather than being specific
to the relationship between FJF and Apprenticeships.
18. One set of providers are therefore effectively
being displaced for another and there are not therefore direct
"transition" issues as such. Such problems as will exist
will centre on the impact of FJF withdrawal on providers for whom
it was a key part of their business. As very few providers will
have made an exclusive business of FJF, nor made it so central
to their business model that they cannot survive without it -
bearing in mind the problems with funding that we noted above
- therefore it is unlikely that provider businesses will suffer
terminally as a result. Either way, these problems will not directly
affect the customer - they are strictly of a supply-side nature.
19. However, it is vital that the undoubted expertise
of Apprenticeship providers in engaging employers should be utilised
in welfare to work more generally. If PCs were to pay Apprenticeship
providers for recruiting Work Programme customers into Apprenticeship
places instead of merely converting the existing workforce into
these opportunities, this equates to giving a cost-neutral (to
the UK economy) incentive to Apprenticeship providers to place
long-term unemployed people into sustainable work with training.
This reinforces and consolidates the welfare to work agenda at
the same time as delivering an existing policy remit to increase
the skill capabilities of the workforce.
20. Therefore, if the rationale for the abolition
of FJF is that Apprenticeships do the same job but better, then
in order for this to be the case Apprenticeships need to be more
firmly integrated into the planning model for the Work Programme
than they currently are. If not, they will continue to work independently,
and the benefits of sustained employment that they produce will
not be enjoyed by the Work Programme. It would therefore be difficult
to use expanded Apprenticeships as justification for the abolition
of FJF.
10 September 2010
30 It is only fair to point
out however that the same employer also reported that the local
authority concerned offered to match the £6,500 funding in
order to enable the placement to last a full year. For confidentiality
purposes the member and local authority concerned cannot be named
at present but a copy of the relevant correspondence is kept by
ALP. Back
| 
