Select Committee on Education and Employment Appendices to the Minutes of Evidence


APPENDIX 9

Memorandum from the Local Government Association

INTRODUCTION

  The Local Government Assocation (LGA) is the representative body for all local authorities in England and Wales. The LGA is committed to working closely with its member authorities to support reform and improvement in local government. The Association welcomes the announcement by the Employment Sub Committee of the Education and Employment Select Committee, that it is to carry out an inquiry into the evaluation of the New Deal for the Unemployed. The LGA has invited all local authorities to comment and this response combines the key issues made within all responses received. The following local authorities responded in writing to the Inquiry via the LGA—Blaby District Council, Bristol City Council, East Lindsey District Council, Gateshead MBC, Isle of Wight Council, Knowsley MBC, Leeds City Council, uton Borough Council, Nottingham City Council, Nottinghamshire CC and Stockton on Tees MBC. Individual local authority responses are available of request.

  New Deal is a key part of the Government's Welfare to Work strategy, created to help unemployed people into work by improving their employability. The service is tailored to the needs of individuals, supporting them while they prepare for work and find a job, encouraging relevant skills and training. Since its launch, the New Deal has helped just under 440,000 young people and, in total, about 200,000 people have actually found jobs.

  Local Authorities are involved with the New Deal in two main ways— through partnerships and as employers themselves. There is wide commitment from local authorities to contribute towards making the national scheme a success as it is in the interests of all authorities to combat local unemployment as part of their local community strategies.

  There are six main New Deal programmes, varying in a number of ways and aiming to meet the needs of wider sections of the community. The programmes are for young people, the long term unemployed, disabled people, lone parents, partners of the unemployed and those over 50. In addition to the New Deal, there are fully fledged Employment Zones (EZs) in 15 areas of high long term unemployment where a more focused, area-based approach is taken. This are-based approach has recently been developed further with 'Action Teams for Jobs' introduced in the 40 areas with low employment rates and a high proportion of benefit claimants—these areas include the 15 EZ areas. The Action Teams are small, cross-sectoral teams which are attempting to use innovative approaches to 'match' jobless people with vacancies and overcome local barriers to finding employment.

How successful has the New Deal for Young People been in moving clients into sustainable employment?

  As stated above, local authorities are involved with the New Deal as partners and and as employers themselves. Partnerships are the key to delivering New Deal and local authorities have a long tradition of working in partnerships to deliver effective local services. New Deal partnerships are comprised of local authorities, voluntary sector, trade unions, training and enterprise councils, race equality councils, colleges, career companies, training providers and employers. They have all influenced the design and delivery of New Deal and are vital to local marketing activity. The LGA believes the continued quality and success of the New Deal depends on partnerships.

  Local authorities are also involved with the New Deal as employers. Of a total of 23.7 million employees in the UK, around 6 million (26%) are in the public sector and many of these are in local authorities. Local authorities are therefore very often the largest employer in a local area and some may have the capacity to employ a number of New Deal participants. The Improvement and Development Agency (I&DeA) collects figures of local authority employment of New Deal participants twice a year on a national basis.

  The following comments describe experiences of local authorities which responded to the inquiry, explaining what they feel are the key successes of New Deal to date through their experience as partners and as employers.

Successes (as partners)

  Significant numbers of young people into employment—for example, the Bedfordshire Unit of Delivery has achieved all its targets for moving clients into employment. Since April 1998 over 1,400 young people in Bedfordshire have got jobs through the New Deal. In Nottinghamshire, which is made up of two Units of Delivery, the Environment Task Force has performed at least as well as and in some cases better that other options. In North Nottinghamshire, the County Council is contracted to deliver the entire option and offers both allowance and waged opportunities. The programme is delivered by training providers who subcontract to the County Council. These providers operate in specific geographic areas and tend to offer specific types of projects and training experience. It is interesting to note that job outcomes on the waged programmes (intermediate Labour Market), range between 28.7 and 33.9 per cent, while the unwaged programme only achieves between 6.7 per cent to 11 per cent.

  Gaining funding from other sources is one role that a New Deal partnership can fulfil. For instance, the Isle of Wight Partnership New Deal consortium has managed to attract a further £300,000 from the European Social Fund to extend the Subsidised Job Option for an additional six months.

  Additional support—it is important to consider how well New Deal provision is performing not only in helping clients secure employment, but also in making those who have reservations about the step into employment much more confident about job entry. Additional success can be measured by whether the clients feel that barriers to employment are coming down. For example, can they better handle questions about past criminal convictions? Can they access help with literacy/numeracy problems?

  Better information—the New Deals serve a very wide range of clients with varied needs. Most benefit from better labour market information which the partnership approach is well equipped to provide, given its local expertise and access to information.

Sucesses (as employers)

  Employment option—in terms of the employment option, certain local authorities such as Bristol and Knowsley have made outstanding contributions to the New Deal as employers. Bristol City Council's scheme seeks to provide genuine job opportunities for permanent employment rather than temporary training placements. A New Deal co-ordinator drives the initiative forward across all directorates and liaises closely with personnel officers internally, offering support and advice to managers. There is also close liaison with the Employment Service New Deal manager with regular meetings and briefing/training seminars which the council feels are essential for ongoing communications. The council is also looking at innovative ways to use the employer subsidies for New Deal employees and teams employing New Deal participants. Bristol City Council originally had a target of 40 New Deal participants but this was quite an ambitious target due to factors such as insufficient numbers of corporate vacancies. However, the scheme has been successful. Knowley's approach is different, in that trainees are recruited to six month "placements" during which time they have intensive personal development. Work experience and NVQ training. After four months on the programme they have priority access to council vacancies at scale 1-2. This has been very successful—the latest groups have had 90 per cent and 100 per cent job outcomes as a result. The council has a dedicated team that focus on mentoring and supporting training through the programme. Some other authorities also seem to be beginning to employ more New Deal participants—for instance, Leeds City Council has now agreed to participate in the Employment Option and Department are being quoted in terms of recruits to be employed under the New Deal. In the first instance they are looking to take on 100 young people across a range of Departments.

  Environmental Task Force—there have also been some very good results from the ETF options being offered within some local authorities. For instance, in Nottingham City Council, the council's own scheme is running at approximately 75 per cent success rate. In Leeds, the Environmental Task Force has received national acclaim and continues to offer a good working environment and workskills for which New Deal participants receive the waged option.

2. What have been the factors affecting the successes and failures?

Factors affecting success (as partnerships)

  Gateway—the gateway gives young people time to prepare and to think about what they want to do and employers get a recruit who is motivated and committed to the job. Some authorities have written to say they feel the tightened gateway for 18-24s "trailblazers" is good as it has allowed the partnership to disseminate the issues young people have brought to the Intensive Gateway Trailblazer and the measure they can use to deal with them, to all other staff involved in the programme.

  Personal advisers—some authorities argue that the New Deal's most important innovation was to assign a Personal Adviser to every participant. The quality of the relationship with the Personal Adviser had strong effects—good or bad. The role of the Personal Advisers is pivotal for how both participants and providers assess the programmes. The advisers are also the "gatekeepers" to options—and in effect they have a very powerful position. Anecdotal evidence shows that they save the better quality recruits for the employed option, and the rest end up on ETF.

  Compulsion—Compelling people to take part in the New Deal seems to have mixed effects. At present some groups, such as lone parents, are not obliged to take part; many think this allows a more constructive relationship with Personal Advisers. A trainee that is 'sent' to an option can be much harder to work with than one who applies to come. In Knowsely, the council has introduced applications forms for all on ETF so that there is some sense of choice—feedback from one trainee found that he was 'made up' because he had a job in competition with others—something he had never achieved before. However, compulsion does serve a purpose and many also believe that requiring some groups at least to attend a first interview can help oblige people to consider the programme's merits.

  Willingness of employers to take part in the programme—the partnerships have been able to encourage more employers to take part in the programme.

  Continuity—of the same consortium adviser throughout the programme because well established relationship isessential.

  Work Tasters—Work/Option Tasters enable clients to try out before committing themselves long term. Employment Service Work Trials enable an employer to have a client working on their premises for up to a maximum of 3 weeks which allows both parties to assess suitability before a client is obliged to commit to relinquishing their Housing benefit etc.

Factors affecting success (as employers)

  Commitment from the top—a local authority's political support for New Deal is essential. And there also needs to be wholehearted commitment to the aims and objectives of New Deal at the most senior management level. It helps it there is a translation of the top level support to the personnel level with associated new deal champions being identified at this level and having New Deal recruitment as a central part of their job description.

  Relationships with Employment Service—there needs to be effective development and strengthening of the relationship between the authority and the Employment Service at local level, together with a willingness to liaise regularly.

  Training—for some New Deal participants, full time permanent vacancies in their chosen area of work may not have existed. In some circumstances, trainee positions have been created to provide opportunities to gain work experience and qualifications. In most cases these have been successful in enabling the client to move on into established employment, but this has often required an input of extra fund. Willingness to work at reconciling New Deal training requirements with internal training programmes is essential as it provision of work trials and mentoring support.

  Setting targets—it is important to set targets for New Deal participants early on and then continually review their progress.

  Co-ordination—to make New Deal work within large public sector organisations, many people believe it requires a dedicated co-ordination point and driver within, in order to constantly 'push' people at all levels.

  Networking and sharing of good practice with other similar organisations is found to be helpful. A major factor in success is felt to be honesty—about sharing experiences and being willing to share hard work and not being competitive ie. Not keeping other colleagues guessing how to make New Deal a success. An example of this from one local authority was an inquiry from the Ministry of Defence about the authority's employment initiative. After discussions and much honest advice and experience, the MOD decided to use a similar model and have now managed to employ 10 New Deal participants.

  Publicity and marketing—A higher publicity and marketing profile may help New Deal to be taken more seriously, including highlighting successes. What appears to happen is that all the New Deal strands are "flagshipped" early on in their life and then left to fade into the background, rather than constant/trickle marketing.

Factors affecting failures (as partners)

  Lack of flexibility—there is a danger that the New Deal scheme may be perceived as inflexible as it is impossible to solve all young peoples' problems. An example submitted by a local authority is that of a young man with a maths degree looking for his first job. Appointed to a scale 1 clerical post, he followed units from NVQ 2 administration. He felt these were far below his capabilities, yet his job role would not support evidence for a higher level. Therefore, there needs to be more sensitivity. In addition, there is no flexibility for clients to change between options if their first choice was wrong. For example, in Knowlsey there are some participants who simply cannot do NVQ 2, and it has been a struggle to get anything less agreed by the Employment Service—it is strongly felt that we should not have to fight against rules like this.

  Popularity of options—some options are more popular than others. For instance, it has been reported that many young people take the Full Time Education and Training option to avoid taking the other three. It is also felt that the ETF option is not as attractive as the employment option but perhaps a marketing and re-badging effort is all that is required.

  The whole picture—there is some suspicion that many going into unsubsidised work options would have gone into work anyway. What about the economically inactive?

  Sustainable employment—there are questions over whether the New Deal jobs are sustainable in the long-term—it appears there is a higher percentage of young people coming back to the unemployment register at the end of the four options

  Careers Advice—some authorities have reported inconsistency to access of impartial careers advice which New Deal participants get across different Employment Service districts.

  Subsidy—if the job is advertised as a New Deal vacancy, employers get a subsidy towards the cost of taking on someone new as well as a grant towards training the young person for the equivalent of a day a week. The subsidy has not been taken up as much as thought—and the process is perhaps too bureaucratic for some organisations.

  Clear about the aim—it is important to be clear about the aim of the New Deal because the message seems to get confused on the ground—is it about getting people into jobs? Or about retention? or employability? The design of the different New Deal programmes creates an inconsistent picture of funding and requirements for employers to work with. When trying to fill a vacancy, employers are faced with a number of client groups, some with no subsidies attached, some with specific Employment Service training requirements. This makes it very difficult to promote employment through New Deal as a whole programme, as there is no guarantee of a specific amount of funding, or even whether the employee will be doing the job full time for the first six months.

  Personal advisers' skills—although the idea of having a personal adviser is helpful because it allows for an effective one-to-one relationship, personal advisers often do not have sufficient knowledge of their clients to be able to judge their suitability for a particular vacancy. This results in clients being unsuccessful in recruitment processes and, in some circumstances, employees not sustaining their employment. For instance, advisers are not always able to identify exactly what's going on in a young person's life—they are seen as the enemy in some cases eg "they can stop your Giro". In this way, they perhaps do not have the time to tackle deep rooted problems, which means the employers uncover them often without the resources and expertise to overcome them.

Soft skills—experience of the New Deal recruitment process has shown that even where candidates have previous work experience, they perform badly at interview stage; this is due to lack of interview experience, poor ability to communicate their skills and experience and an inability to prepare properly. There appears to be little emphasis on `distance travelled' with the harder to help clients. For example, Knowsley MBC felt that there is not mechanism for acknowledging progress such as when a participant has `attended work for two weeks for the first time ever' or `arrived on time consistently for a month'—for some of the trainees this is a major achievement. It is strongly felt that where clients have such deep issues extra funding should be available. Nottinghamshire CC also said that a significant number of its New Deal employees have experienced problems which have reduced their ability to sustain their employment. In some cases these problems have continued beyond the first six months, in at least one case for more than 12 months. Sometimes these problems have been overcome through concerted efforts by line managers, colleagues and extra support provided by a dedicated member of staff.

  Relationship with Employment Service—the relationship with the Employment Service is crucial to making the New Deal Work. Some authorities have commented on the number of changes of Employment Service (ES) organisation and staff feeling this gives a problem with consistency and continuity. Knowsley MBC felt that this was particularly the case amongst personal advisers where there was a large turnover of staff.

  Some vacancies cannot be filled—an authority said that although they have relaxed their recruitment procedures there are still a vast number of vacancies that cannot be filled from the New Deal client group, most of whom lack the required skills and experience. For example, clients who have been through training programmes to gain skill in operating IT systems but do not have typing speeds, a skill which a large number of our clerical vacancies require. The managers with vacancies which they have sought to fill through New Deal, have all appointed candidates whom they feel can do the job well and quickest, sometimes appointing those having skills, experience and qualifications well above those needed for the job. This leaves a large number of clients who cannot access our vacancies, and for whom there is no easier way into employment.

  Training requirement—The New Deal training requirement for the 18-24 age group has been a barrier to successfully filling a number of vacancies. Managers offering a job which has been assessed as requiring 37 hours a week to complete cannot reconcile this with the requirement for a day a week to be spent on off the job training, when this is not directly associated with the job. The requirements are often unrealistic and not tailored to individual need.

Factors affecting failure (as employers)

  Despite internal commitment to the New Deal, some authorities have found that theyhave had little success in attracting New Deal participants. A survey of all local authorities is carried out twice a year to determine level of New Deal employment. The survey is sponsored by the Local Government National Training Organisation working in partnership with the I&DeA and LGA. The March 2000 New Deal survey has recently been extended to cover all New Deal options. Currently, only around 28 per cent of all local authorities are employing or training New Deal participants. However, as the New Deal Task Force's Public Sector Group found, there are a number of valid reasons for some authorities not being able to employ more New Deal participants such as:

    —  Lack of suitable vacancies

    —  Lack of resources

    —  Calibre of clients

    —  Number of clients

    —  Relations with Employment Service

    —  Organisational change

  Other reasons authorities have raised include East Lindsey District Council which feels their scheme has not been a success and they put this down to the fact the area is primarily agricultural and tourism related with seasonal employment. They also feel that the six month qualifying rule excludes many people who work during the summer and would like to see some relaxation so the scheme can have greater impact. Blaby District Council which has managed to employ a small number of New Deal participants feel that due to recruitment problems, there have been no more applicants and the local private company has not been able to supply any more.

  Other authorities have similar problems, for example Nottingham City Council ringfenced 50 entry level vacancies for the New Deal and after two years of working very closely with the Employment Service they are disappointed to have only managed to recruit approximately 15 clients. They have worked closely with the County Council to run joint sessions around jobsearch and the ways in which the councils work. They have also tried to explain the way the council works to improve its accessibility as well as simplifying recruitment procedures and creating substantial support mechanisms for New Deal trainees before interview and after appointment.

  The LGA is keen to see the number of authorities employing New Deal participants increase and is therefore organising a seminar for selected authorities in December 2000 to encourage greater participation.

3. How effective and comprehensive has the Government's programme for evaluating New Deal been?

  Evaluation of New Deal is ongoing and each month the Employment Service New Deal "core performance" is measured. The survey looks at various aspects such as clients moving from New Deal into subsidised and unsubsidised jobs, the numbers of clients remaining in jobs 13 weeks, 6, 12, and 18 months after leaving New Deal, the numbers and proportion of participants who are disabled, from ethnic minority backgrounds and gender of those achieving outcomes; the number and level of qualifications achieved; and the numbers leaving for other destinations, also on a quarterly basis information on unit costs are reported.

  The limitations of the Employment Service Labour Market System (LMS) to record outcomes are well known. Many of the numbers have been "lost" on the system which does not record anyone who has come through on the unsubsidised route. As it is difficult to extrapolate local authority figures from LMS, the I&DeA measure the performance of local authorities as New Deal employers by commissioning a survey twice a year.

  Some local authorities also feel that throughout the scheme the "goalposts" have constantly changed so the emphasis has changed time and again. Although some excellent work has been done, because the different strands of New Deal were rolled out very quickly it is impossible to see how newer options can have been informed by learning from the New Deal for Young People.

4. How have lessons from the New Deal for Young People informed the development of other strands of the New Deal?

  Gateway—the Intensive Gateway Trailblazer has been particularly useful in informing other aspects of delivery. There is a slight concern however about, after the intensive gateway week, what is done to follow through with clients and support them having built them up during this period.

  Contracting—lessons from the 18-24 New Deal have resulted in streamlining the contracting process for New Deal 25+ and the successor to Work Based Learning for Adults due to start from 01/04/01.

  Stepping stone—once established the options have had greater success in moving young people into jobs, the Voluntary Option in particular has encouraged and motivated young people to be more proactive in their job searching activities.

  ETF—at the outset, the Environmental Task Force option was seen as a last resort for those young people unwilling to engage in anything and there was also a lack of interesting and motivating projects for them to engage in. With time, and applications for additional funding from ESF, SRB and other agencies it has been possible for projects to be developed which give some inspiration to the young people. It is strongly felt that the definition around ETF should be relaxed so that it would be possible to get young people in to call centre jobs, or in to IT. For example, there are thousands of vacancies in the North West for this type of work and it is felt that if there was an ETF project to feed this high demand, there would be more success. It is felt that there are fewer jobs in horticulture, and the jobs that there are will be seasonal and low paid, yet ETF is designed to get these sorts of projects.

  Compulsory element—across all options the compulsory job search element has had a significant impact on the young peoples attitudes to seeking work.

  Retention—there has been poor attendance for interviews and the low retention rates across all the options. In some instances more than 50 per cent of young people have failed to keep appointments and a similar figure have dropped out of their option within the first couple of weeks. This creates significant resource problems for providers which has lead to financial difficulties or an inability to attract and keep quality staff.

Other issues

  Finance—why is less money available to be spent on each 25+ client who must have been unemployed for a minimum of two years before becoming eligible for New Deal?

Flexibility—many partnerships would look for greater flexibility to move between options, together with a need to offer 25+ clients a greater range of options.

  Length of unemployment—why does a client have to be unemployed for two years before becoming eligible to join New Deal?

  Specialist organisations—there is some concern about the inability of specialist agencies to help those young people with severe problems such as substance abuse.

5. What changes are planned for the design and delivery of the New Deal and what benefits if any are they likely to bring?

  Pre-employment—there is a need for a longer period of pre-employment training to help some New Deal participants make the difficult transition back into work. This would need to cover generic work skills and the development of personal skills tailored to the needs of individual employers, and should enable employers to choose from a pool of known potential candidates trained in their own processes. A source of up-front funding would be needed for large employers to be able to do this themselves. It would be helpful if the pre-employment was actually in a workplace—otherwise young people will see it as just another scheme.

  Training flexibility—there is a need for more flexibility within the training requirements, particularly for employers who have already demonstrated their commitment to employee development, eg through the IIP award. Individual assessment of training needs and recognition of the value of on-the-job and employer-run training.

  Funding—a need for more flexible funding arrangements on the Employer Option to provide a level playing field and redress the balance for non-subsidised groups, including Lone parents, 50+ and young people on other New Deal options.

  Soft skills—some clients need an in-depth period of training in assertiveness, confidence building, communication skills and one-to-one support could be helpful in helping clients identify and play to their strengths both in preparing for and undertaking interviews. More flexibility in ES programmes could help overcome New Deal participants' lack of experience of normal recruitment practices. For a large equal opportunity employer to be able to use Work Trials to give potential applicants a chance to prove they can do a job, it is necessary to offer a work trial to more than one applicant for the vacancy; for some types of vacancy this could work better if done on a group basis.

  Other options—for future development of the New Deal programme it would be beneficial if the Voluntary and Environmental options had the flexibility, like the FTET option, to offer a programme up to a year in length. This would ensure greater job success and give the length of time necessary to achieve a full NVQ qualification as it is only possible to deliver units in the 6 months.

  Relationships—need to work on relationships and communications with New Deal suppliers and contractors in order to improve job outcomes, and better tracking of destinations and capturing the results.

FINAL WORDS

  Getting people into work has been at the heart of Government's policy since it came to power but as unemployment continues to fall, the challenge of New Deal becomes greater and the Welfare to Work Programme will come under closer scrutiny.

  The New Deal scheme has undoubtedly achieved a lot, particularly in its help for young people finding work, and increasingly, as it is beginning to concentrate on other sections of society. Many aspects of the scheme have been successful, including the use of personal advisers and the Gateway. However, although a lot of people have found work through the New Deal the challenge will no doubt get harder in the future.

  The New Deal may be improved in several ways as it evolves over time. It is currently seen by some a taking a "one size fits all" approach to the unemployed and economically inactive without tackling all the individual problems of the participant. It is clear that some areas have benefited from the New Deal more that others and it has also been argued that the New Deal distribution matches closely with the overall picture of unemployment. If this is the case, it will now have to concentrate on the particularly 'hard to reach' participant where the need for flexibility is likely to be that much greater eg the homeless, the over 50s etc.

  The LGA argued in its evidence to the Employment Select Committee's inquiry into Employability that it is important to look at the demand side of employment. It is felt that the demand side of the labour market has not been given full consideration in current employment policy and this needs to be addressed. There is a need for a targeted local response and interventions to help create jobs at the local level.

  It is also apparent that the New Deal needs to clarify its objectives because at present it is unclear to some whether the scheme's long-term objective is about employability or getting people off benefits and into jobs. With the raft of new initiatives such as employment zones and action teams for jobs, the picture is becoming quite confusing.

  Therefore, three years after the national roll-out of the programme, there is a great demand for more flexibility, a closer look at demand side measures and targeted patterns of support to suit local circumstances. In particular, more intensive support, including job creation, perhaps through intermediate labour markets and similar schemes, which is very important in the most disadvantaged communities. Local authorities will continue to be involved with New Deal both as employers and as partners but it is clear that at the same time, they are also involved in many other ways by helping to create more jobs and assisting local people to find them.

Local Government Association

November 2000


 
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