Youth Unemployment and the Future Jobs Fund

Written evidence submitted by St Paul’s Community Development Trust

SUMMARY. The FJF programme is very effective. It has been cancelled, before any viable alternative is available for the main target groups.

This is likely to create a worrying situation. High rates of youth unemployment will combine with lack of opportunity in the ‘core cities’ to cause a mounting sense of waste and frustration.

Background.

1. Our organisation is a Charitable Trust based in inner-city Birmingham which works with children, young people, families and community.

2. We made a successful bid for a Future Jobs Fund contract, and started work on this in October 2009. By February 2010 we had provided 100 young people aged 18-24 with jobs, and won a second contract for a further 100 jobs. We had made an application to run a third scheme at the point where the programme for 2011 was cancelled.

3. The scheme continues to generate great enthusiasm from both the young people and their supervisors in our own and other voluntary agencies. At present we are employing about 140 young people in FJF jobs, which are generally filled as soon as JCP advertise them.

4. Over thirty different agencies have taken part in our scheme, providing supervised placements for the young people. There is a considerable variety of jobs – about forty different job descriptions.

5. Young people recruited reflect the diversity of Birmingham’s population, in ethnicity and gender, and are almost equally divided between under and over 21 years of age. 5% have significant disabilities.

6. Less than 10% have failed to complete their period of employment. So far, of the leavers 37% have achieved ongoing employment.

7. We have recently been audited by DWP and understand they were satisfied with our management of the scheme.

Commentary.

1. We were surprised and disappointed at the cancellation of the FJF programme. It had, from our viewpoint, a number of strengths which we hoped to build on. These can be summarised:

· Voluntary agencies were able to create jobs which they could not have otherwise afforded in a time of diminishing grants and difficulty of access to contracts. This undoubtedly increased the capacity of the agencies and benefited their clients.

· The scheme has clearly been effective in providing work experience to young people who for the most part had not previously been able to obtain any employment. (Many of these were under-qualified, under-skilled and presented with negative character references e.g. they were ex-offenders.)

· The eagerness of both agencies and young people is demonstrated by the facts – 100 jobs created in five months from a standing start, and a very low drop-out rate. The number of agencies wishing to take part has risen steadily and still rises although we have to turn them away. This is despite the fact that BeBirmingham, the City’s strategic partnership, ran a much larger FJF project with a high proportion of voluntary sector jobs.

· 37% went into continuing employment from the first tranche of the scheme – a comparatively high rate relative to WNF outcomes (average about 20-25%.)

2. We also want to suggest why the scheme is successful. The following are important points:

· Voluntary agencies have substantial experience of training and working with young people, including those from disadvantaged groups. The agencies are highly motivated to help those who face barriers to employment.

· FJF, while not over-priced, offered sufficient funding for the young people to receive minimum wage, and for staffing costs including on the job supervision, basic vocational training, ‘job club’ activities and necessary overhead costs such as payroll and accounts.

· The scheme did offer quality in experience, and this requirement had to be met by agencies as well as the young people. Most young people have left the scheme, therefore, with some additional vocational credits as well as references and new skills.

· Within our scheme we were able to add value to the specification in the contract by providing vocational training, mentoring and specialist on the job supervision – all of which are standard good practice in the larger voluntary agencies.

· The FJF programme also had a virtue which is sadly quite rare – it not only encouraged the formation of a consortium of 30-40 voluntary agencies (and some local schools), but it facilitated partnership with JCP and BeBirmingham. Without JCP support we could not have run the programme, and its success is a tribute to the enthusiastic help we received. If BeBirmingham had not included us in their discussions, we would have been less certain of our direction.

· Thus, FJF began to create an approach which entailed building on the strengths of those working to create the programme through a new and more genuine partnership than is often the way.

3. Weaknesses in the FJF programme as we experienced it, include:

· For the most disadvantaged young people, six months is too short a time to take in the necessary induction to work, learn the basic elements on the job, obtain some qualifications and move into ongoing employment.

· As spelled out by recent reports, what is needed is a foundation of vocational education and introductory work experience, followed by an ‘apprenticeship’ period, leading to full employment.

· The changes which can bring about this integrated system cannot be put in place immediately – although the government intends to effect this transformation in due course.

· We had hoped FJF would continue until new apprenticeship schemes, and developments in ‘technical’ academies, etc. were accomplished. Our intention was to use funds earned by supervising FJF employees to establish more social enterprise opportunities for the continuing employment of those unable to progress within six months.

· This project of ours would have filled a gap while waiting for new apprenticeship schemes. Instead, the sector and the young people are facing a considerable period in which opportunity is lacking.

4. Is the FJF programme too expensive? May we argue for Birmingham and other places with similar problems:

· The Select Committee will be aware that Birmingham, in July 2010 the claimant rate was 11.7%, while the UK average was 5.3%.

· For young people the picture is even bleaker. In April 2009 the number of 18-24 year olds in the City on JSA was 11,550. In June 2010 it was 12,900. (City average thus 18-20%.)

· Birmingham has the highest rate of youth unemployment among all the UK ‘core’ cities.

· Some Wards in the City, including Sparkbrook where we are based have male claimant rates approaching 30%. Those Wards with high proportions of young people – three out of the worst five – have correspondingly high rates of youth unemployment.

· Alarmingly, the statistics show that the NEET rate among young people aged 16 and 17 is rising, even before this year’s leavers sign on in September. The evidence indicates problems are worsening.

5. We would argue that rather than a general cancellation of the FJF programme, the government might consider a time-limited extension until alternatives are in place which meet the government aim of providing enough support for even the most disadvantaged to succeed.

6. The extension would not apply to all areas, but to those which were defined as having intolerable levels of youth unemployment.

The Role of the Voluntary Sector in Employment Training.

1. So far, it appears the voluntary sector will have enormous difficulty in contributing to the new Work Programme. While the detail of this is as yet unknown, the size and ‘backloading’ of payments for contracts seems prohibitive.

2. The sector understands the need for payment by results systems. It is when this is combined with huge scale and the need for new and untested forms of organisation that it comes to seem impossible.

3. Given the virtues as outlined above of the voluntary sector as a provider of vocational training, ‘apprenticeships’, and enterprise development experience, it would be a great loss if it were excluded.

4. We are unsure as yet what the government’s proposed ‘technical academies’ (or ‘service academies’) will involve. A proposal which may have merit, is that some of these could be based around social enterprise, with apprenticeships offered through a voluntary sector consortium. These apprenticeships would have to be funded as an aspect of youth training, since the sector has no surplus, typically, with which to part-fund apprenticeships.

5. We believe that one or more pilot projects for a scheme such as the above could be run in Birmingham.

17 August 2010