Youth Unemployment and the Youth Contract - Work and Pensions Committee Contents

4  The Youth Contract: the role of Jobcentre Plus

80. Jobcentre Plus (JCP) will have a central role in the Youth Contract: it will provide additional adviser support to young unemployed people and broker 250,000 extra Work Experience and Sector-based Work Academy placements. Additional adviser support and work experience placements will be available across England, Scotland and Wales. Additional Sector-based Work Academy placements will be in England and Scotland only. This chapter examines JCP's role and some of the challenges it will face in trying to deliver these additional services.

JCP's role in supporting young unemployed people

81. JCP provides support for young jobseekers in the early stages of their out-of-work benefit claim, before they become eligible for the Government's contracted employment programme, the Work Programme. Most young people are referred to the Work Programme at the nine-month point in their Jobseekers Allowance (JSA) claim (rather than at the 12-month point for JSA claimants aged over 25 years). Some 18 year-olds who have been NEET for six months immediately before they make a claim to JSA are referred to the Work Programme at the three-month point. The large majority of JCP's young claimants are aged 18-24. Very few 16-17 year-olds are eligible to claim JSA and are therefore not in regular contact with JCP.[69]

82. In the early months of their benefit claim, before referral to the Work Programme, each claimant attends their local Jobcentre for a Work Focused Interview (WFI, commonly known as "signing on"). Most claimants are required to attend a WFI at least every two weeks. This initially involves the JCP adviser discussing the claimant's employment aspirations, checking for suitable job vacancies and drawing up a jobseeker's agreement. The claimant must agree to undertake job-search related activities, such as writing a CV or spending a certain number of hours per week looking for a job, in return for receipt of benefit. Claimants who do not comply with their jobseeker's agreement can be sanctioned by having their benefit stopped for a period or be referred to Mandatory Work Activity, a period of unpaid work of local community benefit.

83. In subsequent WFIs the JCP adviser ensures that the jobseeker is keeping to the agreement and assists with the claimant's job-search. The adviser can refer the claimant to locally-commissioned training courses or arrange a Work Experience or Sector-based Work Academy placement (see below).

Extra responsibilities under the Youth Contract

Increased adviser support

84. Under the Youth Contract JCP will offer "more flexible" support to young JSA claimants through weekly, instead of the more usual fortnightly, WFIs. DWP gave us little detail about what this more flexible support would entail although the Minister said that this "will not always be an interview; it may be a telephone call or an exchange of e-mail or text messages, but there is a weekly contact".[70]

85. JCP currently provides several in-house back-to-work services, including: Work Clubs, for unemployed people to get together to share job searching ideas; Work Together, a volunteering scheme; Work Experience; and Sector-Based Work Academies (see below). JCP advisers also have access to the Flexible Support Fund (FSF) to provide additional help, based on their assessment of the individual's needs and the local job market. There is no exhaustive list of the types of needs for which the FSF can be used but it includes: help with costs of travel and clothes to attend interviews or undertake training; childcare costs; allowances to meet the costs of training; and one-off costs such as buying tools, to enable claimants to take up a job. JCP District Managers are responsible for deciding how the FSF is spent in their area and for drawing up local guidelines on the criteria for awards, limits on payments and local priorities.[71]

86. Some witnesses felt that JCP advisers currently lacked the time to give young claimants the support they required.[72] The Rehab group argued that it would be beneficial for young people to be assigned a dedicated JCP adviser.[73] We wanted to know whether the Youth Contract would make this possible and also whether it would increase the time advisers would have available for young claimants as well as simply the frequency of WFIs. DWP told us that the Youth Contract would pay for more "in depth" adviser time but no targets had been set for the amount of time allowed for each meeting. Each young person would meet an adviser face-to-face every week from the five-month point in their benefit claim. The then Minister for Employment told us that in the last 18 months JCP had brought in a policy that every claimant would regularly see the same adviser.[74]

87. Other witnesses praised JCP's "undoubted expertise" and acknowledged its key role in the success of the Youth Contract.[75] Dr Genevieve Knight, of the Policy Studies Institute, thought that extra JCP adviser time could prove to be useful for young claimants. She pointed to evidence from studies of previous programmes, such as the New Deal for Young People, which had found that this type of job-search assistance improves employability rates.[76]

88. The main issue highlighted by witnesses in relation to JCP was the variation in the quality of its services across the country. From an employer's perspective, the CBI told us its members reported a "patchy" service around the country. Chris Bowman, a small business owner, had been disappointed by a "pretty poor" response from JCP when he had tried to recruit through them.[77] Some employment and skills services providers expressed a similar view. For example, the JHG group told us there was "no consistency between JCP offices in their objectives or effectiveness."[78] The Foyer Federation told us that young people had reported that JCP offered inconsistent advice and unclear information.[79] The Association of Employment and Learning Providers (AELP) argued that this inconsistency was a result of the highly decentralised nature of JCP's decision-making structure, which was "not conducive to the proper implementation of national policies or initiatives."[80]

89. Some witnesses also felt that JCP was overwhelmingly focused on getting people into jobs and off benefits to the detriment of a proper diagnosis of claimants' skills training needs and matching skills to the requirements of the local labour market. For example, the AELP felt that JCP's understanding of, and interest in, skills matching was "at best mixed and often apathetic". It argued that JCP was neither resourced nor incentivised to engage with this issue.[81]

JCP Work Experience scheme

90. The JCP Work Experience scheme is available to 16-24 year-old JSA claimants. Its aim is to help young unemployed people gain the experience needed to secure a job before they become eligible for the Work Programme. All 16-17 year-olds are eligible from the first day of their JSA claim (although as noted above, very few in this age group are eligible for JSA). The very large majority of young JSA claimants (18-24 year-olds) are eligible for Work Experience after 13 weeks of their claim. Placements generally last for between two and eight weeks. Participants continue to receive benefit and to look for permanent work. DWP can pay travel, childcare and other costs if required. The scheme is open to employers of any size and in any sector.[82]

91. From autumn 2012 a new DWP/Greater London Authority pilot scheme will trial mandatory work experience placements for 16-24 year-olds who have less than six months work experience when they make a new claim for JSA. The pilot will apply to 6,000 young jobseekers in 16 London boroughs. The work experience placements will be for 30 hours per week, including 10 hours of job-search support, and last for 13 weeks. The work experience will expressly be required to be "of benefit to the local community".[83]

92. CIPD has produced extensive guidance for employers on the provision of quality work experience placements. Katerina Rüdiger of CIPD outlined some of the steps employers should take to ensure their placements offer a beneficial experience and proper support to participants:

    ·  Placements should be tailored to the young person's needs;

    ·  Each participant should have a work plan;

    ·  Mentors/supervisors should be carefully chosen and receive training; and

    ·  Feedback should be offered to each participant.[84]

93. Many witnesses highlighted that work experience was vital for young people looking to enter employment (school-arranged work experience is discussed in chapter 7). The TUC was very clear that "good quality work experience is absolutely key" to helping young people get a job. However, Nicola Smith of the TUC was concerned about anecdotal evidence that JCP-arranged work experience was sometimes of poor quality, particularly given the Government's intention to scale up "dramatically" the JCP scheme. She felt that the target of 250,000 additional placements was over-ambitious and doubted whether private sector employers had the capacity to deliver such a large number. With JCP under pressure to broker so many extra placements the TUC was concerned that a "huge proportion" would be in the retail sector merely because these were the easiest to source in large numbers. It did not believe that this type of placement could guarantee the required quality.[85]

94. Witnesses also questioned whether the JCP scheme had a significant beneficial impact on young people's employment prospects. Early DWP analysis of the first 1,300 participants had found that 51% had come off benefits after 13 weeks of starting a placement.[86] Both the TUC and Inclusion noted that this figure was not greatly different to that which would be expected for non-participants in the scheme. However, more recent in-depth analysis by DWP suggests that JCP Work Experience participants are 16% more likely to be off benefits after 21 weeks than non-participants and 28% more likely to be in employment.[87]

95. Inclusion's view was that the JCP scheme did have an impact in terms of participants gaining employment but that the direct impact was relatively small. It argued that it was important that JCP Work Experience should be carefully focused on those claimants who stand to gain the most from it. Principally these would be longer-term young unemployed people with little or no previous experience. Referring young claimants who already had work experience and relatively good employment prospects risked taking them away from potentially more productive job-searching activities and damaging their long-term employment prospects (described as "lock-in" risks).[88]

96. Staff at Twickenham JCP told us that its Work Experience placements had a 40% success rate in terms of getting young people into jobs. This included instances where the placement had an indirect impact on the young person gaining employment with another employer rather than directly with the work experience employer. Twickenham JCP had service-level agreements with employers offering Work Experience placements. These agreements made clear the need for a structured approach with progress to different roles and that the intention of the placement was that it should benefit the young person as well as the employer.

97. We asked the then Minister of Employment for his response to the widespread criticism in the media and elsewhere earlier in the year that the JCP Work Experience scheme allowed employers to exploit young people for unpaid labour. He argued that it was "a fear that is simply not grounded in reality". His view was that exploitation of this kind was unlikely because JCP provided only short-term placements whereas it usually takes significantly longer to develop someone into a truly productive employee. He told us that DWP's guidance to JCP was, "If you have doubts about an employer, do not use them".[89]

98. The JCP Work Experience scheme has the potential to help many young unemployed people move into work. Evidence suggests that its impact can be maximised by focusing carefully on quality placements for those who stand to benefit most: those with no or little previous work experience. Without careful monitoring by JCP, unpaid work experience may be counter-productive for people who already have experience and therefore have relatively good employment prospects.

99. We believe the focus should be on the quality of placements rather than the quantity. The Youth Contract target of 250,000 extra placements over three years may be over-ambitious. In this context we recommend that the Government continues to work with employers and human resources experts to ensure that work experience opportunities provided under the Youth Contract offer genuine opportunities for young people to increase their employability.

100. Since we completed our evidence, another work experience scheme has been announced for young people, initially as a pilot in the London area. It is unclear how this will inter-relate with existing provision or how it will impact on the voluntary organisations and social enterprises which are to be the focus for providing placements. We expect the Government to fully evaluate the scheme before it is rolled out more widely.

Sector-based Work Academies

101. Sector-based Work Academies (SBWAs) offer a mix of training and work experience placements to jobseekers who have been unemployed for over three months. The scheme is voluntary and available to JSA and ESA claimants over 18. Participants remain on benefit during the placement. JCP can pay travel and childcare costs. Those who complete a placement, which can last up to six weeks, are guaranteed a job interview with the organisation they have been placed with.

102. The SBWA approach requires joint-working between JCP, local employers and training providers. It is designed to meet local recruitment needs and offer unemployed people the chance to learn skills appropriate to local job vacancies. The pre-employment training element offers the opportunity to study towards recognised qualifications at further education colleges or with other training providers. These courses are fully funded through the Skills Funding Agency (part of BIS).

103. Employers offer work experience placements, in which they are advised to "treat [participants] as regular employees as far as possible whilst they remain on benefits, but recognising that they may initially need additional coaching and supervision". Employers must also have a job vacancy for which they must guarantee the young person an interview at the end of the placement. They are also encouraged to consider whether the participant could be taken on as an apprentice.

104. DWP has set out in published guidance how employers should treat participants in the scheme:

·  Explain what you need them to do

·  Inform them of management and reporting arrangements

·  Facilitate positive working relationships

·  Provide an overview of your business and its values and culture

·  Give a tour of the workplace

·  Provide guidance on using any equipment

·  Provide guidance on health and safety; and

·  Explain standard workplace practices such as security procedures, dress code, sick leave/absences, lunch and break times.[90]

105. Twickenham JCP told us it had achieved 26 job entries through SBWAs. Training courses included opportunities to gain certificates in areas such as food hygiene and first aid. Staff reported that these types of certificates were particularly valued by young people who had no formal qualifications. JCP aimed to arrange SBWA placements in potential growth sectors in the local economy, such as hospitality, although these were sometimes difficult to identify in the current economic climate.

106. There was a good deal of support amongst witnesses for Sector-based Work Academies.[91] The TUC told us it preferred the SBWA approach to the JCP Work Experience Scheme. It noted that SBWAs were similar to the previous Government's Work Trials. However, Nicola Smith of the TUC was concerned that the training element of SBWAs had been reduced under pressure from employers and that participants would not receive training to NVQ level 2 as standard, as had been the case in Work Trials.[92]

107. We support Sector-based Work Academies which combine a period of unpaid work experience with relevant training and the guarantee of a job interview. We therefore recommend that JCP prioritises this approach. To be effective SBWAs will need to be established in growth sectors within local economies. We recommend that some of the extra resources allocated in the Youth Contract go towards strengthening JCP's ability to make a proper assessment of the requirements of the local labour market so that SBWA placements can be properly targeted and offer realistic long-term employment prospects.

Youth Contract budget allocation

108. DWP told us that JCP would take on "around 4,000" new staff to provide additional adviser support and broker more Work Experience and Sector-based Work Academy placements. Iain Walsh of DWP told us it had had to take a view on how much extra resource for JCP adviser time would be cost-effective. It was expected that the JCP element of the Youth Contract would account for between £100 and £200 million of the overall £1 billion budget.[93]

109. We welcome the additional resources allocated to Jobcentre Plus as part of the Youth Contract. However, to ensure effective use of resources the 4,000 new staff will need to be deployed carefully, to the districts that most need them. We support extra adviser time for young claimants, which has been shown to have a beneficial impact on employability. However, JCP staff will need to be properly trained to ensure that those providing advice have an up-to-date knowledge of the employment and training options available to young people, and that they recognise the importance for young people of acquiring skills and customise the support to the individual accordingly. While we understand the imperative to get young people off benefits and into work, an equal focus on increasing skills of value in the local economy is likely to produce more sustainable outcomes.

69   A full description of the rules relating to Jobseekers Allowance can be found in: DWP, Jobseeker's Allowance: Help while you look for work Back

70   Q 370 Back

71   See and DWP, The Jobcentre Plus offer: Equality Impact Assessment, October 2011 Back

72   See for example, AELP, Ev w9 Back

73   Ev w46, para 33 Back

74   Q 373 Back

75   See for example, AELP, Ev w9 Back

76   Q 10 Back

77   Qq 79-82 Back

78   Ev w31, para 6 Back

79   Ev w25, para 11 Back

80   Ev w7, para 5 Back

81   Ev w9, para 8 Back

82   See DirectGov website at Back

83   "'We need all our young people to be working and contributing' say Mayor and Employment Minister", DWP press release, 28 August 2012 Back

84   Q 27; see also CIPD with Education and Employers Taskforce and UKCES, Making Work Experience Work, April 2012 Back

85   Q 105 Back

86   DWP, Early Analysis of Work Experience participant outcomes, November 2011 Back

87   DWP, Early impacts of Work Experience, April 2012 Back

88   Ev 104 Back

89   Q 377 Back

90   DWP, Sector-based work academies: How Jobcentre Plus can help you fill your vacancies more efficiently,May 2012,available at Back

91   See, for example, Centrepoint, Ev w18; New Economy, Ev w36, para 16 Back

92   Q 102 Back

93   Q 403 Back

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Prepared 19 September 2012