Youth unemployment and the Youth Contract

Welfare to Work Convention 2012Birmingham

Martin BettsLabour Market Interventions Strategy Division

Youth Unemployment

• The level of youth unemployment is too high and we, like other countries, are affected by continuing uncertainties in the global economy.

• Of the 1,013,000 ILO unemployed 16-24 year olds, 305,000 are full time students, leaving 709,000 ILO unemployed and not in full-time education.

• The number unemployed and not in full-time education is around 10% of all 16-24 year olds, lower than previous recessions.

• On average young people leave JSA more quickly than older age groups – 60% of inflows leave within 3 months and 80% leave within 6 months.

Labour Market Statistics June 2012 – Office For National Statistics

Characteristics of young people who are NEET

• Most young people do not spend any time NEET and have positive expectations about the future.

• A minority of young people are at risk of becoming long-term NEET.

• Strong link – young person’s background and the likelihood of becoming NEET.

• Care leavers are particularly at risk of being NEET.

• Young people from workless backgrounds and areas struggle to find work and have low expectations for the future. But young people desire to work rather than spend their lives on benefits.

• Other groups, like recent graduates, can expect better future prospects.

Policy is under development forpost-Work Programme support

Adviser support

Support through flexible provision

• Contracted provision• Black box• Maximum 2 years• Cross benefit• Minimum standards

Flexiblesupport

ConditionOf being on

Benefit -face to

face contact

Fortnightly signing Fortnightly signing Fortnightly signing

After the Work ProgrammeWork ProgrammeBefore the Work Programme(Claim duration)

Adviser support

Support through flexible provision

Claimant journey

Jobcentre Plus offer for JSA customers

• JCP managers and advisers given as much flexibility as possible.

• Trusting frontline advisers to use skills to give customers the help they need.

• Flexibility supported by new JCP performance framework.

• JCP will be judged by its results not by its activity.

• The new support model will consist of

– Face to face meetings

– Flexible adviser support and a menu of customer provision.

Flexible menu of support

Peer SupportMentors

Work Clubs

Work ExperienceInternships

Work ExperienceMandatory Work Activity

Apprenticeships

Volunteering Work Together

SkillsBasic Skills Support

Occupational Training: Sector based work

academies

ESF25% IB, IS volunteers75% disadvantaged

families

JobsearchAdvisor Support

Job vacancies databaseOnline supportCareers Advice

JCP Group Sessions

Flexible Support FundDiscretionary fundsSupport partnership

work to tackle disadvantage.

EnterpriseNew Enterprise Allowance (including mentoring and

financial support)Enterprise clubs

Self-employment guidance

The Work Programme

• Work Programme providers have the freedom to provide the help they consider necessary to support young people into a job.

• Providers are paid on the results they achieve, and are paid more for supporting the harder to help into work.

• Most young people claiming JSA referred to the Work Programme at 9 months (instead of 12 months for claimants 25+).

• 18 year olds who have been NEET for six months before them make a claim to JSA are referred at the 3 month point of their claim.

• By the end of January 133,000 18-24 year olds have joined the Work Programme.

• Planned investment of £3-5 bn into the Work Programme over the life of the contracts. Estimated young people around 25% of referrals.

Making Apprenticeships work for young unemployed people

• Apprenticeships play a vital role for many young people, helping them at the outset of their working lives to progress their careers.

• An apprenticeship Grant for employers provides incentive payments to small employers who take on their first apprentices aged 16-24. The total number of incentives available in 2012/13 is 40,000.

• An Access to Apprenticeship Programme supports young people into a personalised programme of work and training, aiming to get them into a paid job with an employer as an apprentice. Expected to benefit 10,000 per year.

• Apprenticeship starts for under 19s in 2010/11 were nearly 132,000. Funding this year for 16-18 year olds will be £833m to fund 140,200 apprenticeship starts.

• Closer working - Jobcentre Plus and National Apprenticeships Service.

The Youth Contract

• Extra support through Jobcentre Plus for all 18-24 year olds, consisting of weekly, rather than fortnightly signing.

• An opportunity to be referred for a careers interview with the National Careers Service.

• 160,000 wage incentives worth up to £2,275 each, for employers who recruit an 18-24 year-old from the Work Programme. Early eligibility in youth unemployment ‘hotspot’ areas.

• Extra 250,000 Work Experience or sector-based work academy places over the next three years, total of at least 100,000 a year.

• A further 20,000 Apprenticeship Grants for Employers worth £1500 each for employers to take on young Apprentices, taking the total to 40,000.

• We are investing £150m over the next three years (£126m of it in England) to support the most disengaged and disadvantaged 16-17 year olds.

Youth Contract and Wage Incentive Schemea Providers Perspective

Alex Stevenson

Wage Incentive - National Picture

Total opportunity of the scheme: 160,000 wage incentive payments availableTranslates Nationally to around 1000 wage incentive job starts available each weekNational take up:400 job starts recorded up until the 3rd week in May 2012

Wage Incentive Scheme - The Basics

The main object of the Wage Incentive Scheme (WIS) is to incentivise the employment of young disadvantaged or disabled unemployed people accessing the Work Programme into paid employment lasting at least 6 months.

The Wage Incentive Scheme is available to young people aged 18-24 who are attached and accessing the Work Programme

Wage Incentive payments are made to employers who employ 18-24 year old customers from the Work Programme on or after the 2nd April 2012

The wage incentives are paid to employers by the DWP for jobs that lasts at least 6 months.

Employers can claim up to £2,275 per candidate employed for at least 30 hours a week Claims can be made after 26 weeks employment, with an initial payment available to

small employers at 8 weeks The WIS is available to employers of all size from Tesco’s to SME’s. However it is only for

Voluntary and Private employers so central government jobs aren’t eligible and neither are self-employed outcomes

Is WIS Working?

There has been and continues to be interest from employers – however employer leads have reduced since the launch of the Incentive in April

In April and May a large proportion of wage incentive job starts have been with new employers (80% in the South East)

A large percentage of employers taking part in the scheme are with SME’s (employing under 50 employees) – a sign that small local employers are taking up the opportunity to employ young people with the help of the Wage Incentive Scheme

Although there has been some interest from larger national employers (eg Poundland), there has not been the take up we would have expected

Feedback from employers is positive they want to employ young people into their business and provide them with a trade

G4S Progress

North East Y&HSME’s make up 47% of WI starts in April and MayAn increase of 61% on the total WIS job starts from April, by the end of

May. North West SME’s make up 53% WI starts in April and 37% in MayAn increase of 34% on the total of WIS job starts from April by the end of May

South EastSME’s make up 64% of WI starts in April and MayAn increase of 78% of the total job starts from April to the end of May

Employer Case Studies

Aegis Rubber Engineering based in SussexSmall design and manufacture company employing 22 people Up until now they have used the local press and jobcentre plus for their recruitment and normally are able to interview using these methods. They were keen to access the Wage Incentive funding to contribute towards salaries. “we would have recruited eventually for this position but the Wage Incentive has enabled us to recruit sooner than we would have been able to without the funding, this has been a really good experience, we haven’t thought about using any additional agency support before but we would use you again.”A larger wholesale box design company based in Kent Successfully used the Wage Incentive scheme employing 17 warehouse operatives. This company usually employ temporary/agency on daily/weekly contracts Wage Incentive Scheme has enabled them to offer long term contracts which they are committed to extending after 6 month probation. We are now talking to the employer about apprenticeships, again an area that they have not considered previously.

G4S Innovative WIS Activity

Employer convention 5th July Salford City Red Rugby Stadium Tailored marketing for customers to give to employers or send with

Application forms and CV’s (In the form of a cheque to show potential value to employers.

Monthly league tables produced to show top performers and then share best practice

Using Call centre resource from within G4S to cold call employers, promote the WIS and generate leads across all 3 CPAs , which were followed up by local contact

Delivering Partnership Events focused on supporting young people into work, delivering information sessions to Work Programme customers and running Wage Incentive Job Search sessions

There are some limiting factors

Nationally, and regionally we expected greater take up for the Wage Incentive Scheme, limiting factors may include:

Some employers are more interested in finding the right person for their job rather than attracting the funding for a young person.

National advertising campaign of the Apprenticeship Programmes has sparked new interest with employers – some employers are more comfortable with the term and model of an apprenticeship and therefore have a preference for this model over the wage Incentive Scheme

Other localised employment based schemes heavily promoted to employers e.g. KCC Employment Programme

Nervousness around information sharing and the claim process – although the claim process seems straightforward there is still some confusion.

Collating MI and success stories is proving quite resource heavy for Work Programme Providers with most recent requests for data collection etc…

More we can do...

Consider promotion of Wage Incentive verses Apprenticeships enabling employers to understand the difference and know what is best for there business, there is room for both incentives.

Proactive marketing and promotion within like minded employers i.e. SME’s, specific sectors

National government support and promotion of the Wage Incentive Scheme, especially to larger businesses

Local Minister support for the Wage Incentive Scheme Further re iteration given to the JCPs nationally to promote the WIS Continued engagement with Chambers of Commerce, Local Councils,

Employer forums and stakeholders to promote the WIS to their employer links.

Employer forums and/or conventions

Any Questions?