Making it work: the European Social Fund - European Union Committee Contents

Examination of Witnesses (Question Numbers 180-193)

Mr Mark Yeoman, Ms Carolyn Webster, Mr Steve Arnott, Mr Greg Burke and Mr Shay O'Rourke

7 JANUARY 2010

  Q180  Lord Kirkwood of Kirkhope: That is all you are concerned about?

  Mr Burke: Building on that point, for me the issue is about how we make it join up at the local level. I think there is a lot of benefit in having ESF linked to employment training programmes at a national level because then we can pool together a whole package of support that really can work on the ground, and if you disentangle that then that is quite difficult to do, but I do not think at the local level we make the links as well as we could. When we are doing ERDF activity we are not always thinking early enough how does ESF activity, or other activities—it might not just be ESF but other mainstream activity—support the people development that might go along with that ERDF, which is very important. What tends to happen is that the ERDF projects go along and have a life of their own and then the ESF stuff is always a bit catch-up, so I think there needs to be more joining up at the conception stage to say, "Okay, what is the timescale for these things? How do we need to make sure that when this infrastructure is in place we have done the necessary development for people using potentially ESF funding so those two things come together?" I think often that does not quite happen, but I do not think it is the systems that stop it happening; I think it just needs to be more joined up at a local level.

  Q181  Lord Kirkwood of Kirkhope: And that needs to be written in ab initio at the programme level, the European level post-2013, when, whatever the successful regime is, that needs to be embedded in at the highest strategic level?

  Mr Burke: I think it does, but not in a restrictive way.

  Q182  Lord Kirkwood of Kirkhope: No, not in a prescriptive way.

  Mr Burke: No, but setting out that framework in expectation of how the model should operate at the local level and then enabling people locally to make that happen.

  Lord Kirkwood of Kirkhope: Just as a codicil to that, if you look at what is happening to some of what are now called the peripheral European States in terms of the structural budget deficits, it is not just accession States that you are going to have to deal with in terms of cohesion, it is Spain, Ireland and Greece, and the next five or ten years are going to be horrendously difficult for them. We have had a windfall exchange rate bonus and I think people in Spain, who you may have noticed are in the Presidency now, may notice this and it may be quite hard for the UK to get away with that kind of benefit in the future. I think it is going to be very difficult, but that is very helpful evidence, thank you.

  Chairman: We have touched on additionality and Baroness Young is going to pursue additionality.

  Q183  Baroness Young of Hornsey: Yes, just a little. I think it is one of those deceptively easy-looking questions: "To what extent are ESF projects genuinely additional in your experience?" It sounds easy. I would like particularly, Mr Yeoman, if you could say something in addition to the remarks you made in your submission about what might happen in the future in terms of the need to continue monitoring and perhaps up the monitoring in the future.

  Mr Yeoman: Yes, what I was alluding to in my evidence, and perhaps I did not make it clear enough, was that, particularly on the Welfare to Work and Response to Redundancy agendas, because there have been (and quite rightly so) a lot of central government initiatives to tackle the economic and financial downturn, and because ESF, as has been explained a number of times this morning, has to be additional, we have at a local level had to look at what the ESF provision is that we have contracted for and make sure that it still really is truly additional, and that becomes an ongoing and difficult process. It is slightly complicated by the fact that sometimes the policy at a UK level or at an England level is entirely right, but it does need to be nuanced and understood at the local level. I will ask Carolyn to give you some examples in terms of jobseeker's allowance differences across the South West, but what I want to illustrate with those numbers is that the labour market conditions, say, in the far south west of Cornwall and the Isles of Scilly, is very different from other places such as Swindon in the South West. The policy may be right, but it does not mean that it must roll out in a uniform way across the whole of the South West or the whole of the UK. We must get to a position, both in terms of large-scale ESF roll-out and in terms of mainstream roll-out, where the procurement does not dictate what the policy looks like at a local level because it will mean that you will get the application of initiatives that do not make sense at a local level, and that just complicates things from the European Social Fund point of view because you must always be looking for that additionality. As colleagues have illustrated this morning, quite often ESF allows you greater flexibility. It allows you to pilot new ways of doing things; it drives innovation, and let us exploit that while we have the opportunity and push that as far as we can so we can learn for the mainstream, but not let the mainstream cut us off at the knees, as it were. Perhaps Carolyn could illustrate that point for me.

  Ms Webster: The economic downturn has had a different impact in Cornwall and the Isles of Scilly than it has elsewhere, even in the South West. If you look back to jobseeker's allowance rates in January 2000 in Cornwall when we had a rate of 4.3 per cent and in September 2009 it was 2.6 per cent, and you look at somewhere like Swindon, which in January 2000 had a rate of two per cent and now has a rate of five per cent, you can see that there are differences there and the response we need in Cornwall and the Isles of Scilly is not the same as the response they need in Swindon. There were a number of very helpful new mainstream initiatives that came out from central Government, many of which we were already delivering through ESF in Cornwall and the Isles of Scilly because we have this joined-up approach, so it is about looking at those new offers and asking how do we flex our ESF delivery around that and how do we work with our providers to say there is a group of customers there that can now be dealt with through the mainstream so that you can focus on another set of customers, and it is about continually trying to balance that overall need for the people in Cornwall and the Isles of Scilly.

  Q184  Baroness Young of Hornsey: But is it the case that the more flexibility there is with the ESF funding and the more complex the funding streams become the more difficult it then is to separate out what the additional impact of the ESF funding is?

  Ms Webster: It is not as long as you are clear about what you have got and what difference a new programme makes and how you can then adjust the total resources that you have in order to deliver on the agenda that you need to deliver on.

  Q185  Chairman: Does anyone else want to say anything about that?

  Mr Burke: I was just going to pick up on the co-financing point. The co-financing model of DWP and the LSC does make it a lot easier to identify explicitly the additionality over the mainstream programmes under the previous model where it was harder to see very clearly what would be there without the additional ESF funding. That model does make it easier to identify.

  Mr Arnott: I endorse that point, that the additionality is very clear with co-financing because the two main co-financing organisations do tend to tender and procure the additional ESF separately but, regarding your earlier point, I think that, particularly where that additionality is being used to enhance programmes rather than provide something completely different, it does make the impact a bit more difficult to measure. Going back to my first example of a sort of integrated programme in South Yorkshire for the people who are most disadvantaged, those individuals might go through four or five different providers in a lifetime of that programme but there will only ever be one job in terms of an outcome, so it does sometimes make the impact a bit more difficult to extract from that.

  Q186  Chairman: That does lead into the final and very important question, which is that even if you have got additionality how do you know it is effective? How do you know that what you are doing is adding value and outcome against measurement? We know that there has been a paucity of that kind of statistical information and we just wondered if any of you could help us in looking at effectiveness.

  Mr Burke: I think it is important to look at the different ways that we might measure this. As Mr Arnott has just mentioned, there is management information around outcomes, so people you have got into jobs or whatever is supposed to be the success measure of that particular programme, but it is also important to look at the longitudinal research, which is probably the most effective way of measuring impact, so looking at individuals over quite a long period of time and what has happened to them, because for many of these programmes we are not just about getting people into a job; we are about moving them from disengagement to engagement and being successful in the labour market and moving through some upskilling and going on to move out of poverty, so it is quite a long-term strategy for individuals. The only real way of measuring that is to look at a longitudinal survey, which DWP are doing around ESF, and that is probably the best way.

  Q187  Baroness Young of Hornsey: What period of time would that longitudinal study cover?

  Mr Burke: I do not have the dates, but it is—

  Q188  Baroness Young of Hornsey: Will it be over a year?

  Mr Burke: Yes. It is the full programme.

  Q189  Baroness Young of Hornsey: So over the lifetime of the programme?

  Mr Arnott: Yes. It will take quite a big selection, I think, because I think it will produce data at a regional as well as national level, but it will follow a sample of participants over the lifetime of the programme. I do not think we are going to get the first set of information until about the spring of 2011, but it will be an interesting piece of work when that comes out and that will follow up those individuals over a longer period.

  Mr Burke: We also probably need to look a little bit more at some of the ways we might measure progression. At the moment we are very much focused on measuring job outcomes as being important or formal qualifications, and for some people who are very far from the labour market those steps that they need to take may be more difficult to quantify. At the moment we do not necessarily have quite the measures in place to measure the steps as opposed to the whole journey. Sometimes the ESF intervention has significantly helped them to make some very important steps but maybe has not quite helped them to make that big leap into the job or into the formal qualification, although that does not mean that it has not been valuable and is not essential to getting them to the next stage, but at the moment those mechanisms are not there in all programmes to measure.

  Q190  Lord Kirkwood of Kirkhope: Hang on; let me ask you the question another way, and this has to be an instinctive, anecdotal response, I guess. If somebody at the beginning of the seven-year programme had just given you respectively a chunk of money, no strings attached, in your own areas; you have got to spend this, there has got to be an audit trail, you cannot put it all on a horse or anything like that, over a seven-year period could you have done more in your own regions with the €X million that you had to dispense through the ESF? I know Mr Yeoman's answer because he is a committed holy warrior for cohesion and maybe that is right, but there are a lot of other people who think they would rather take the money than have an ESF fund. Very briefly, could you have used the money more effectively if you had been left entirely to your own devices?

  Mr Burke: It is an interesting question. I think our sense is that the way in which we have delivered the ESF programme within our region has not particularly restricted things that we would have done differently, if that makes sense. The parameters of the priorities and the way in which we have to address things in the North West, and this may be a North West issue and not a national issue, are the priorities that we want to work with and want to address. It is enabling us to do things we feel we need to do, and even in the light of the recession we reviewed what were our priorities and were those priorities still true, and, interestingly, they still held true because they were sufficiently broad and the overall population had not changed that much, so the issues were still the same.

  Q191  Chairman: Lord Kirkwood asked an important question but I want to move you back to where we were because it is a very important issue that we have had throughout our evidence, which concerns hard and soft evidence issues about the effectiveness. We have visited projects and on those visits met individuals who were having their confidence built or learning anger management or all the other programmes that help people to manage themselves and develop in relation to being able to work in the workplace. The difficulty is not having the hard evidence that often counts in some places and we would be very interested to know when any of this other longitudinal evidence would be available or whether there is any indicative evidence you could let us have.

  Ms Webster: I think the longitudinal study is really important and we do have lots and lots of case studies of individuals which are very inspirational, but in terms of hard evidence, from the Jobcentre Plus/DWP co-financing in Cornwall and the Isles of Scilly, at the moment three people every day are going into work as a direct result of the European Social Fund programmes—and that is into work with ongoing training and development because that is something that we insisted on in our ESF delivery to add value, and it is also from a programme that is targeted at the hardest to help people. Looking at our co-financing plan as a whole, which includes our mainstream provision, 50 per cent of the participants are on ESF programmes but 85 per cent of people going into work are from ESF programmes.

  Q192  Chairman: Those sorts of illustrations we would find extremely useful in terms of our report.

  Mr Yeoman: At the other end of the scale, going back to your original question: are we happy about the balance between Welfare to Work and higher skills, we have a graduate placement project in Cornwall and the Isles of Scilly. To give you a little bit of background, at the beginning of Objective 1 when it started we knew we had a lot of graduates in the workforce and we knew we had a lot of businesses. We also knew that a lot of the small businesses had no history of taking graduates into the workforce, and so we have a graduate placement scheme. What we monitor in terms of the participant activity in that scheme, and it might be of interest to the Committee, is the outcome for the business of the year's graduate placement in terms of increase in turnover because the placements are geared at specific sets of activity so you can measure the impact on the business. We also monitor the percentage of graduates that are retained in the business and whether the companies give them a pay increase after the subsidy that comes out of the European Social Fund. We can provide that evidence and on average it is something around an increase in turnover for the business of about £140,000 a year.

  Q193  Chairman: This is just the sort of evidence we want.

  Mr Yeoman: Seventy per cent of the graduates are retained and about 70 per cent of them get a pay increase as well, so not only does the business pick up the subsidy element; it pays those graduates more on top of that. In terms of impact on the individual and on the business, we can provide you with that sort of evidence.

  Chairman: That is what we want, to see if there is additionality and if that additionality has an outcome. That outcome is not always just in straight numbers but in effects on people's lives. That would be really helpful. I am afraid we really have not only come to the end of our time; we have rather overrun our time because we have some more work this Committee has to do this morning, but could I thank you all very much indeed. It has not only been a wonderful effort by all of you to get here but also I think we have found it an extraordinarily useful morning's evidence, so thank you for taking the time. There might be other things you want to say. If you do have other information that you think we have not yet received, do not hesitate to send it in to us. We read an awful lot of material as well as hearing it. Thank you very much.

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