Youth Unemployment and the Future Jobs Fund

Written evidence submitted by County Durham Council

Introduction

Durham County Council welcomes the opportunity to submit evidence as part of the Work and Pensions Committee’s first inquiry into Youth Unemployment and the Future Jobs Fund (FJF). This response reflects Durham County Council’s views and our experiences of managing and delivering FJF. The response highlights:

· County Durham approach to FJF

· Key successes and strengths

· Case studies

· Implementation issues and key challenges

· Areas for consideration and improvement

Tackling employability, deprivation and regenerating our communities, alongside wealth generation is a high priority for the County. A fundamental component of achieving our ambitions of sustainable places where people want to live, work, invest and visit, is enabling our young population to become competitive and successful. Through targeted interventions like FJF it has been possible for the Council to provide the support and real job experience that many young people who are not in education, employment or training need.

Although successes have been enabled through the FJF and other Area Based Grant funded initiatives we still have significant numbers of young people not in employment that face many barriers to securing a job – the journey is far from complete! As we enter a period of constrained public finances, it is particularly important that we are clear, targeted and know what works to support youth employment within the County. We support this enquiry, await its outcomes and strongly believe that targeted support for young people must continue.

County Durham’s Approach to FJF

Since the announcement of the successful Tyne and Wear City Region Future Jobs Fund bid in September 2009, Durham County Council has worked with a variety of employers and partners like Job Centre Plus and Connexions to create job opportunities as part of the Young Person’s Guarantee. The programme within the County aims to create over 1,000 job placements by March 2011. The FJF programme has in excess of £2m FJF resources and a further £0.5m allocated from Working Neighbourhoods Fund to maximise the scope of the FJF programme. This has provided a total budget of £2.5m up to March 2011.

The programme is managed by a small team of staff within the Economic Regeneration Team in the Economic Development Service at Durham County Council. These staff have extensive experience of managing and implementing a variety of employability focused programmes funded through Working Neighbourhoods Fund, Neighbourhood Renewal Funding and Single Regeneration Budget. The FJF team liaises and co-ordinate with employers to create job opportunities and with JCP who check the eligibility of prospective employers and employees.

Key Successes and Strengths

The list below highlights they key successes of the programme to date:

· Provided much needed ‘real’ job opportunities for young people within the County

· Achieved over 375 job starts1.

· Currently hold over 287 ‘live’ vacancies

· Currently have over 507 proposed positions within the public, private and third sector

· Working Neighbourhoods Fund secured as match funding

· Additional funding has allowed employers to offer a ‘real wage’ to job-seekers, above the £6,500 available to employers over the initial 6 month fixed term period and provide longer term opportunities

· Job opportunities provided in a variety of sectors from neighbourhood wardens to receptionists

· Driven by the needs and skills of the individual not the employer, however provide added skills and resource benefit for all employers

· Over 120 job opportunities have been created by the third sector

· Durham County Council has provided over 100 jobs, particular success has been within the Neighbourhoods Service Grouping

· Delivered wider community benefits

· Enabled partnership approach between the public, private and third sectors

· Provided a better link between supply and demand in the labour market

Case studies

Many employment opportunities have been created through third sector organisations, who have either provided direct job creation or have acted an ‘employment hosts’ by seconding individuals to smaller organisations. An example of this arrangement has been provided by East Durham Partnership.

Jobs within the private sector have been more difficult to create, with state aid rules and community benefit eligibility causing some restrictions. However, the Council has made great strides during August 2010 with two local businesses who have developed products and processes in support of green-technology and so qualify for FJF support through the promotion of energy efficiency.

In both of the above case studies, the private sector company’s will take advantage of the FJF being able to support the first 6 months of the apprenticeship scheme. Therefore, making the job more permanent at the outset, providing sustainability and long term commitment for the employer and employee.

Implementation Issues and Key Challenges

There were several implementation issues experienced in the early phases of the programme and other key challenges that have impeded the ease of establishing job opportunities and matching individuals to these employment placements, including:

· Changing operational guidance, eligibility and slow start - The programme suffered initial ’teething’ problems following bid approval like many new programmes, however, these were exacerbated by the evolving nature of the operational and eligibility guidance. This created frustrations for internal management, programme planning and partner implementation: better communication is needed.

· Employer buy-in - Although the timescales for implementation from DWP were clear at the outset, a period of lead in or piloting would have been useful in order to ‘sell’ the programme to local employers. Employer support and buy-in proved a key challenge at the beginning of the programme, but local processes were devised and implemented to overcome this. The pressure to be ‘up and running’ quickly whilst local processes and relationships were being formed obviously led to a slow start in terms of job creation performance.

· Pre-employment support - As the FJF programme clients have been out of work for some time, many face additional barriers to employment and required pre-employment advice and support. During 2009 and the early phases of the programme, it was a challenge to gain appropriate pre-employment support for individuals.

· Role of Job Centre Plus (JCP) - The reliance on JCP as the only referral mechanism to prospective employers has proved limiting and an area of concern. However, the relationship with JCP has been excellent throughout the development and delivery of the programme. This good working practice has enabling and facilitated effective decision making.

· Community benefit - The definition of community benefit and the eligibility criteria for appropriate job opportunities affected the number of jobs created. As current FJF guidance states, FJF aims to create additional jobs to deliver benefits to communities and these benefits must be in addition to the benefit of employment to the individual. As included within the FJF bid, wider benefits for local communities, such as the increase in local employment levels, the associated impact on health and well-being and the wider regeneration effects needs to be maximised for the benefit of the individual and those providing job opportunities. It is understood that there is a careful balance needed and that FJF should not supplement jobs already created or planned, these are ‘additional’ opportunities. The community benefit definition has been problematic for securing private involvement, especially in comparison to third sector contracts.

· Employee skills - Some jobs have been initially created with unrealistic expectations about the level of skills and experiences required by prospective employees.

· Recruitment delays – The programme has experienced delays in recruitment following job creation. This has been linked to low levels of referral, low conversion rates from referral to submission of an application and poor conversion rates from application to filled jobs.

· Competing employment support programmes - The lack of fit with existing JCP programmes has been an issue, in particular New Deal.

· Geographic coverage - The County Council’s portfolio of FJF jobs does not yet represent an equal spread across the County settlements, with the majority of jobs coming from the more deprived areas of the County, mainly East Durham. A longer delivery period, would have enabled more time to develop the programme, extend partners and the number of employer, widening the coverage of job opportunities available.

Despite these difficulties and challenges, the numbers gaining job opportunities, vacancy handling and referral processes in the County have seen a continued improved performance over recent months. This progress has meant we are still on track to achieve the programmed 1,000 job creation opportunities. As the County Durham FJF is part of an ongoing evaluation process that has been commissioned by the Tyne and Wear City Region, this will provide a more detailed analysis of what has worked well and weaknesses during the lifetime of the programme.

Areas for consideration and improvement

The Government’s decision to end FJF in March 2011 rather than March 2012 will certainly curtail job opportunities for young people in County Durham. Locally there is concern about the transition period between FJF and the newly planned integrated welfare to work programme.

The FJF programme within the County has over six months of delivery left, with significant numbers of job opportunities left to fill. The numbers of live vacancies and the recent progress made with private sector and with the addition of another 12 months would mean more sustainable job opportunities could be realised. The Council would be and is willing to continue such an employment placement programme and has the required management and expertise to continue this at present.

The outlined recommendations detailed below should be considered to improve a future FJF programme or any future employability/work programme:

· Need and demand driven – the FJF programme has not only helped to meet the needs and job experience requirements of young people in the County, but also provided a short term skills/resource solution for the employer. It is important that future employability support is demand driven, ensuring that those not in work are developing and benefiting from appropriate work experience.

· Relaxation in the community benefit criteria – this would have enabled much wider participation from the private sector. However, the criterion does need to be targeted to ensure this programme does not artificially distort the local jobs market. New start businesses could benefit from such criteria relaxation, providing much needed financial support for new businesses, extra resource, but also allowing these businesses to expand and grow.

· Fragmented and disjointed employment services and programmes – there is a clear link between FJF and the apprenticeship programme that has not been maximised. Although links have been made within the County and longer term job opportunities realised, this needs to be formalised. There is a case for the National Apprenticeship Service to become more involved. Both programmes can complement one another for the benefit of employers and employees.

· Young People Not in Employment, Education and Training (NEETs) – Further work to cement and extend the relationship with the Connexions service to target those at risk of becoming longer term unemployed and understanding the employability needs and ambitions of this group of young people is needed. County Durham has on average 3.77 % higher numbers of NEETS than England and the numbers of 18 year olds classified as NEET is of particular concern. This cohort has recently increased year on year2 and over 50% of the whole NEETs group are 18 years old3. This correlates strongly to the increased numbers of young people aged 18-24 claiming Job Seekers Allowance. It is important that there is effective transitional support between services, especially whilst young people transfer from Connexions and JCP.

· Pre employment support – A coherent and coordinated approach to pre-employment advice and support, for all ages, would benefit both the potential employee and employer. As clients of such programmes have been out of work for some time, they often face complex barriers to employment, from confidence, anxiety and low skills.

· Short term funded initiatives – the short term nature of government initiatives can mean that significant time is lost in establishing new processes, partners and delivery mechanisms, rather than concentrating on the delivery priority, in this case enabling young people to access job opportunities. Although this argument is not new, a longer term approach would enable greater numbers of placements and an enhanced service, with greater handholding and aftercare support once people find permanent employment.

FJF has enabled the delivery of real jobs for young people within the County. A longer term solution to employability and particularly supporting young people into employment is needed. The perpetual short term nature of government initiatives can exacerbate the issues and frustrations felt by employers and those not in work (being passed from one support programme to another!). We need a demand driven approach that enables young people and the rest of those of working age that are not economically active to obtain support and/or retrain in appropriate job growth sectors and gain the appropriate skills levels for their own benefit and for the wider economy.

Within the County a range of multi-faceted and person-centred initiatives have been established to support people into employment or enterprise and tackle the variety of barriers they may face. However, the recession has limited progress and increased numbers claiming Job Seekers Allowance, particularly amongst young people. This will be compounded by the reduction of ABG and removal of FJF. As a Council, supporting our population to become more competitive and successful remains a strategic priority and we will endeavor to support people to become economically active, however, this will become increasingly challenging with the reduction of public resources.

10 September 2010