The new planning and funding The new planning and funding environment for learning providersenvironment for learning providers

Paul ConveryPaul Convery

Director, Unemployment Unit & Youthaid, LondonDirector, Unemployment Unit & Youthaid, London

Training & Employment Network (TEN)Training & Employment Network (TEN)

New Deal programmes under-performing New Deal programmes under-performing

18-24 job entry rates: 46% (max) and 33% (sustained): better than previous programmes, but still poor e.g WBLA

ND for 25+ only achieving 10% job entry ND for lone parents: 30% job entry Delivery Unit variations - from 48% highest

sustained entry rate to 22% lowest "Jobs first": over-strong emphasis on job

submission - 42% of job starts are for work that is not sustained for more than 13 weeks (incl 19% amongst employer option)

New Deal programmes under-performing New Deal programmes under-performing

The "Disappeared": a fifth of leavers (cumulative 77,000 by December 1999) are still unaccounted

Options are not popular: 60% of all job entrants are from Gateway after interview; only 12% of job entrants come from Options

Sanctions numbers rising from 650 in Q3 1998 to 4,500 in Q3 1999

Sanctions data shows some options are clearly unpopular (e.g. 46% of ETF participants in West Midlands)

Fixing New Deal under-performance?Fixing New Deal under-performance?

Intensification: Gateway Trailblazers ("IGT"); early diagnosis of acute disadvantage -

identification of basic skills needs; improved case management and counselling; outreach and support - stressed neighbourhoods

and chaotic lifestyle participants; enriching the offers - option tasters, intensive

activity and services - options mix and match; interpersonal and communication skills; special packages for the most disadvantaged;

Fixing New Deal under-performance?Fixing New Deal under-performance?

identify skills required in growing industries and occupations; only refer those with realistic chance of meeting an employer's specification;

low paid, low quality, unsustainable jobs; preparation of participants on what to expect; maintain communication with employee and

employer after the placement has been made; post-placement services for participant/employer; structured introduction to work; appraisals and

help; training for career advancement;

Skill gaps emergingSkill gaps emerging

4 out of 10 of employers experience recruitment difficulties;

basic skill requirements: few jobs for those without reasonable literacy, numeracy and keyboard/interface competence;

change in work organisation: front-line employee responsibilities increasing;

higher touch skills: team-work, customer focus, social & interpersonal skills, verbal and written communication, problem solving, independent working - hard to quantify/qualify;

Skill gaps emergingSkill gaps emerging

employer anxiety: "dizzying pace of change"; employee anxiety: increasing complexity of work; SMEs are usually specialists relying on niche

markets or a small number/type of customers: vulnerable to change; highly specific work organisation and skill

requirements;

Decline of traditional recruitmentDecline of traditional recruitment

outsourcing and employment of "contingent" workers (low skill and high skill) = employer reliance on external recruitment suppliers;

"flat structures" = short career paths and limited length-of-stay wage premiums;

weak employment tenure due to either cyclical market fluctuations or continuous re-structuring;

low levels of fixed cost labour = need for rapid firm-specific training for recruits;

Decline of traditional recruitmentDecline of traditional recruitment

paradox: more informal and structured complex recruitment (employers looking for the "right fit" i.e. personal attributes, experience and/or training)

growing businesses lead to re-location "jolts" public employment service - traditional low end

agency - less used in tight labour markets.

Identifying needsIdentifying needs

Skills forecasting: by sector, region and by employer size: NTOs, LSCs, RDAs, SBS

better business and labour market intelligence personally tailored information, guidance and

advice to learners intelligently using ITC - linking learners to

employer demand understanding employers’ real requirements

Improving participation and attainmentImproving participation and attainment

Basic skills and core competences Strengthening the work based route Integrating academic and vocational & progress

into higher education New entitlements e.g. all ages level 2 Flexible forms of delivery - “where and when” New learning cultures - both employers and

individuals targeted support for the disadvantaged

Improving quality - demand ledImproving quality - demand led

Modular - “bite sized” learning Higher skilled teachers and teachers New types of financing - personal learning

portfolios, ILAs, income contingent loans Workforce development and employer

participation: financial rewards, tax incentives, industry-wide collective financing

New learning institutions: private sector and non-profit

Demand led, “full service” intermediaries

Labour Market Intermediaries

• Evidence in US of improving retention ratesEvidence in US of improving retention rates• In UK emergence of organisations attempting In UK emergence of organisations attempting

to bridge the gap between employers and the to bridge the gap between employers and the unemployedunemployed

• AppearAppear to have improved placement and to have improved placement and retention rates for most disadvantagedretention rates for most disadvantaged

Problems with existing approaches

• A focus on skills independent of job A focus on skills independent of job opportunitiesopportunities

• Inadequate information about jobs and skills Inadequate information about jobs and skills needs of employersneeds of employers

• Emphasis on short term results rather than Emphasis on short term results rather than long term aims such as job retentionlong term aims such as job retention

• Inflexible programme design and the benefits Inflexible programme design and the benefits systemsystem

What employers want

• Improved job application skills and Improved job application skills and motivationmotivation

• key skillskey skills• evidence of work experienceevidence of work experience

What encourages employer participation?

GoodGood past experience of programmes: past experience of programmes:– that they receive appropriate and good that they receive appropriate and good

quality participantsquality participants– the extent to which programmes impose the extent to which programmes impose

extra burdensextra burdens– cost of training and supervisioncost of training and supervision– burden of administration burden of administration – cost of failure (turnover)cost of failure (turnover)

Trends require new services

• Bridge the gap between demand for skilled Bridge the gap between demand for skilled employees and supply of labouremployees and supply of labour

• Improve the level and nature of information Improve the level and nature of information about employment opportunities and potential about employment opportunities and potential job seekersjob seekers

• Provide more intensive job matchingProvide more intensive job matching• Deliver more intensive approach to job Deliver more intensive approach to job

seekers facing barriersseekers facing barriers

Definition

““An An intermediaryintermediary is an organisation which has is an organisation which has the capacity to intervene in the labour market the capacity to intervene in the labour market at the point of labour market failure to: at the point of labour market failure to: – improve labour supplyimprove labour supply– to activate or stimulate demand for labour: to activate or stimulate demand for labour:

andand– to match supply and demand.”to match supply and demand.”

Labour Market Intermediaries

Generally characterised by the following: Generally characterised by the following: – direct and active interface between direct and active interface between

unemployed and employerunemployed and employer– integrated approach which is integrated approach which is needsneeds rather rather

than programme driventhan programme driven– customer focused service delivery, customer focused service delivery,

characterised by an account management characterised by an account management system.system.

Functions

• Pre-employment supportPre-employment support• RecruitmentRecruitment• RetentionRetention

Pre-employment support

• Outreach workOutreach work• Induction and AssessmentInduction and Assessment• Advice and supportAdvice and support• Employability developmentEmployability development• Literacy and numeracyLiteracy and numeracy• Careers Guidance and Counselling Careers Guidance and Counselling

Vocational trainingVocational training• Work tastersWork tasters

Recruitment

Identifying job opportunities Identifying job opportunities

Job matchingJob matching

Work experience/job tastersWork experience/job tasters

Temporary employmentTemporary employment

Retention

Workplace induction Workplace induction

Mentoring & Counselling Mentoring & Counselling

Mediation & TroubleshootingMediation & Troubleshooting

Ongoing career developmentOngoing career development

Administrative support for placements and Administrative support for placements and employersemployers

New Focus

• Getting a job is a process and not an eventGetting a job is a process and not an event• Retention & advancement the ultimate goalRetention & advancement the ultimate goal• Client focused organisations need to change Client focused organisations need to change

the internal culturethe internal culture• Selling a service to the “main” CustomerSelling a service to the “main” Customer• Focus on retention and advancementFocus on retention and advancement• Job quality is very importantJob quality is very important• Clearer relationship with ES is requiredClearer relationship with ES is required

New Focus

• Seamless service: stop clients from slipping Seamless service: stop clients from slipping through the net or giving up at the first hurdlethrough the net or giving up at the first hurdle

• Performance measurementPerformance measurement• Funding: flexible and public/privateFunding: flexible and public/private• Encouraging a mixed economy of providersEncouraging a mixed economy of providers• Broader workforce developmentBroader workforce development• Jobs pooling for private and public sectorsJobs pooling for private and public sectors

Innovation Fund: £9½ million for three years

Bidding process• Expressions of Interest submitted before the

end of June 2000• Shortlist drawn up by end of July 2000• Bidders invited to submit full proposals within

a six month period.• Subsequent bidding round scheduled for

September 29th 2000 with a programme for future bidding announced autumn 2000

Innovation Fund

Part I: £5 million ring-fenced for projects from the 11 inner city areas with Employer Coalitions.

The objective is to support private and non-profit intermediaries using a demand-led approach to help unemployed people get and keep employment.

Innovation Fund

Part II: £4.5m will support projects with the same objective as Part I;

proposals for Part II funds will be accepted from all other parts of country and from intermediaries in the public, private and voluntary sectors

Innovation Fund

Part III: will be used to support continuous improvement projects that will result in measurable increases in the quality and outcomes of the New Deal.

Innovation Fund

Bids for Part I or Part II are expected to demonstrate match funding from an employer or group of employers equivalent to at least one quarter of the project funding

Innovation Fund

The Part I or Part II payment schedule is output-related, with

40% of payment will be made for job starts;

a further 10% for job starts where the starting wage is above £15,000;

50% for retention after 6 months.

Innovation Fund

Part I will be assessed on: measurable increases in job placement and

retention rates against existing local rates; providing effective service to the most

disadvantaged; demand-led strategy with strong employer

engagement and relevance to the local labour market;

levering additional public and private resource;

potential for replication by ESor contractors.

Innovation Fund

Part II will also be assessed on:»ability to reach ethnic minority individuals

and firms; and»focus on specific sectors that offer

opportunities for career advancement

Innovation Fund

Part III for general projects to enhance New Deal and advance continuous improvement

increase the labour market relevance and outcomes of New Deal Options; and/or

improve outreach and recruitment to ethnic minority and disadvantaged groups; and

result in measurable increases in the number of placed in jobs and retained for 6 months +.

LSC funding regime

• a "core" funding formula which will determine the allocation of some 85-90% of total expenditure

• FEFC model - better suited to classroom based activity (fixed length courses and qualification outputs)

• applied nationally; formula operated

LSC funding regime

• On programme payments & retention

• No start payments

• Rates not yet settled

• Achievement

• Area costs

• Disadvantage

• Additional needs

LSC funding regime

Output related payments

• For work based learning - a maximum of 20% triggered by qualification achievement

• classroom based learning - only apply to A/AS levels and vocational A levels - with 10% maximum

LSC funding regime

• 18+ will not have to pay if: they are JSA claimants or are receiving

other means tested benefits; are unwaged dependents of benefit

recipients; enrolled on basic education or ESOL; they are recipients of WFTC but only if

they also qualify for help with NHS charges.

LSC funding regime

• ES "re-engineered" New Deal 25+

• ES new contracting strategy: preferred suppliers asked to establish

general competence on the basis organisational and capacity criteria

Subsequently seeking bidders for identified provision

LSC funding regime

ES contracting strategy:• demonstrated track record (TSC reports will be demonstrated track record (TSC reports will be

required evidence)required evidence)

• 7 principles in the TSC/Ofsted/FEFC common 7 principles in the TSC/Ofsted/FEFC common inspection framework documentinspection framework document

• existing quality standards systems existing quality standards systems

• additional quality expectations - trained staff, additional quality expectations - trained staff, equality of opportunity, health & safety, equality of opportunity, health & safety, governance standards, VfM, financial probitygovernance standards, VfM, financial probity

LSC funding regime

• ESF ”co-financed"

• Capital funds to non-college organisations - decision defered: local LSCs should make capital funding decisions based on guidance agreed by the Secretary of State

• business and information systems: Individual Learner Record

Internet sourcesInternet sources

New Deal briefings, performance tables, advice New Deal briefings, performance tables, advice & information for participants:& information for participants:

www.uuy.org.uk/www.uuy.org.uk/newdealnewdeal Learning and Skills CouncilLearning and Skills Council

www.uuy.org.uk/www.uuy.org.uk/post16post16