Skills Escalator to secure employment. West London Whole Place Community Budget: Skills Mismatch Workstream

Transcription

1 Skills Escalator to secure employment West London Whole Place Community Budget: Skills Mismatch Workstream Anderford Ltd on behalf of the London Borough of Hounslow, March 2014

2 Business Case Document History Version No. Author Summary of Change Date 1.0 Judith Rutherford 1.1 Judith Rutherford 1.2 Judith Rutherford 1.3 Judith Rutherford 2.0 Judith Rutherford 2.1 Judith Rutherford 2.2 Judith Rutherford 2.3 Judith Rutherford 2.4 Judith Rutherford 2.5 Judith Rutherford 2.6 Judith Rutherford First draft Summary to WLA for 10 December CEO meeting Amendments and addition of implementation plan and risk register, comments from Stavroulla. Added version control. Additions to sections 1 6 Amendments following co-design workshop. Addition of CBA. Version to submit to WLA. No executive summary or annexes General tidying up NB: contents page removed. Chapter 4 strengthened. Chapter 5 includes actions agreed on CBA 14 January. Annexes on customer insight and online service 8 Dec 9 Dec 10 Dec 19 Dec 19 December 3 January 2014 Changes post PSTN and stakeholder feedback 10 February 2014 Analysis of lifelong learning questionnaires. Update of online costs etc Section 1 edited. Section 2 rewritten and earlier material annexed. Reworked section 3. Updated Section 5 Added Executive Summary. This version sent to LB Hounslow and WLA for comment with Annexes Asks updated in light of discussions with DWP and SFA. CBA updated. New customer journey section. 12 February February March March Ditto Version submitted to WPCH Programme Board 25 March 19 March 3.1 Ditto CBA v5 and TA cases added. Annex F and G updated to CBA v5. Skills ask updated. Employer questionnaire analysis added. Responses to New Economy and PSTN comments added. Design considerations moved from chapter 3 to new annex. 3.2 Ditto Results of TA questionnaire added. Revised TA and joint CBA included. Acknowledgements The following have contributed to the development of this Business Case: 12 May 7 July Anderford Ltd London Borough of Hounslow West London Alliance Judith Rutherford Ben Knight Angela McKeever Ross McMichael Tom Knight Liz Meagher Stavroulla Kokkinou Herprit Rana The London Borough of Hounslow would like to thank all those partners who have offered help and advice to this project. Our timescale for development has been short and we are grateful to all those people and organisations many in number who responded positively 1

3 and gave considerable time to the development of the project. Particular thanks are due to West Thames College and Uxbridge Colleges for hosting visits; to Uxbridge College and the London Borough of Hounslow s lifetime learning service for completing surveys with their students; and to the staff of Liberata for hosting visits to their front line customer service revenue and benefits service at the London Borough of Hounslow. 2

4 Table of Contents Contents EXECUTIVE SUMMARY AIMS AND OBJECTIVES SKILLS MISMATCH WORKSTREAM TRANSFORMATIONAL AMBITION RATIONALE WELFARE REFORM AND IMPACT ON WORKING PEOPLE PROJECT SCOPE POTENTIAL BENEFITS THE CASE FOR CHANGE CUSTOMER INSIGHT FEEDBACK FROM EMPLOYERS THE LIMITATIONS OF THE PRESENT CUSTOMER JOURNEY EMPLOYMENT AND INCOME IN WEST LONDON BENEFIT CHANGES AFFECTING PEOPLE ON LOW INCOMES EMPLOYMENT AND SKILLS OFFER RELEVANT TO THE CLIENT GROUP SKILLS ESCALATOR: PROPOSED NEW DELIVERY MODELS DESIGN PRINCIPLES THE SKILLS ESCALATOR MODEL

5 THE SKILLS ESCALATOR ONLINE SERVICE THE SKILLS ESCALATOR ADVISER MODEL EMPLOYER ROLE IN THE SKILLS ESCALATOR NEW CUSTOMER JOURNEY SIZE OF PROGRAMME CHANGES REQUIRED IMPLICATIONS LOCALLY OUR OFFER TO GOVERNMENT ASKS OF GOVERNMENT AND LOCAL PARTNERS GOVERNANCE ARRANGEMENTS THE FINANCIAL CASE NUMBERS IN THE LOCAL HOUSING ALLOWANCE COHORT GROUP TEMPORARY ACCOMMODATION CASES DEFINING THE BENEFITS PROGRAMME SIZE, TARGETS AND COSTS COST BENEFIT ANALYSIS SKILLS ESCALATOR: EMPLOYED PEOPLE IN PRIVATE RENTED SECTOR CBA: SKILLS ESCALATOR EMPLOYED PEOPLE HOUSED IN TEMPORARY ACCOMMODATION SKILLS ESCALATOR CBA: JOINT PRS AND TA... ERROR! BOOKMARK NOT DEFINED. 6 IMPLEMENTATION PLAN

6 IMPLEMENTATION PLAN RISKS TO IMPLEMENTATION PARTNERS LIST OF ANNEXES

7 Executive Summary Skills Mismatch Workstream The objectives of the Skills Mismatch workstream were defined as being to reduce the disparity between the high skills requirements of jobs available locally and the lower skill levels of many of the resident workforce. The proposition developed is to provide support for employed people with low skills to progress and increase their wages who are claiming housing benefits and housed in the private rented sector or in Local Authority Temporary Accommodation. The goal is to gain a demonstrable increase in household income in order to end or reduce their dependence on benefits. This proposal is known as the Skills Escalator to secure employment. Rationale The rationale for this proposal stems from an increasing recognition of the day to day challenges faced by those in employment on low incomes and the need for support to enable these people to earn more and progress. A number of reports have highlighted: - For the first time in 2012, more working households were living in poverty in the UK than non-working ones. Just over half of the 13 million people in poverty, surviving on less than 60 per cent of the national median income, were from working families 1 ; - Those who have low pay frequently become stuck in the labour market. Of those who were low paid in 2002, 73 per cent had not escaped low pay by ; - One in eight workers over the age of 25 remain stuck in low pay for at least 12 months, representing some 2.9 million employees. The Social Market Foundation argued for a Skills for Progress programme to reduce the benefit bill, with tax credits going to working households currently costing the state 21 billion per year 3 ; - The risk of poverty is much higher for children in couple families where only one parent works 4 ; (Joseph Rowntree report, 2013); - By Christmas 2013 the majority of Local Housing Allowance claims in the capital were from working households, (of about 850,000 households in total), and over 90 per cent of the growth in claims over 18 months was from people in work; - Data indicates that there were 36,721 such cases across the West London WPCB boroughs in February 2014 ; and over 9,400 Temporary Accommodation cases, (Dec 2013), of which 36% were estimated to be in part/full time employment 5. 1 Annual Monitoring Poverty and Social Exclusion, New Policy Institute for Joseph Rowntree Foundation, December Starting out or getting stuck? Low wages in Britain, Resolution Foundation, November Making Progress: Low pay trap and lack of skills holding back UK s global competitiveness, Social Market Foundation, April Tackling in work poverty by supporting dual earning families, Rowntree Foundation An analysis was undertaken of all TA cases in LB Hounslow in May 2014 by employment status 6

8 Transformational Ambition The Skills Escalator is designed to be transformational, replicable and scalable. The numbers of those in work on low pay in the private rented sector and in local authority temporary accommodation who are and claiming housing and other benefits are increasing. Over and above the provision of benefits, there is little central or local government support for this client group so the programme is innovative. There are also significant numbers of people who churn between relatively short periods of employment, (while claiming these benefits), and unemployment. The Skills Escalator will help these people progress and increase their earnings through personalised advice and skills acquisition, the overcoming of any barriers to progress, and/or working more hours to increase their earnings. The CBA for the Skills Escalator indicates that there should be significant economic, fiscal and social benefits to be gained by introducing and integrating this agenda with housing benefits. As important, is the ambition to help people achieve settled and secure employment that delivers real income gains to the individual/their household, more secure employment, and results in the exit from, or significantly reduced dependence on benefits. The Skills Escalator sets out an important role for local authorities in commissioning and delivering this service, though central rather than local government will gain the majority of the fiscal benefits. An important linked economic benefit will be the opening of some entry level job opportunities behind those who progress in the labour market. The service transformation/redesign elements include: - Integrating Employment Advisers with the housing teams as part of the Skills Escalator project; - Considering the Skills Escalator group favourably to access the boroughs adult learning service for courses in numeracy, literacy, IT and ESOL in particular; - Channelling clients to the National Careers Service to gain an action plan focused on wage gain; - Overcoming barriers using knowledge of wrap around local services gained from working on welfare reform; - Use of S.106 funding where eligibility allows this; - Using existing links with business to target employers with skills shortages with suitable candidates and appropriate skills provision. Case for Change Customer Insight indicated that: - That some of our target client group are keen to progress, are willing to undertake learning to do so, have relatively modest and realistic earning ambitions, and would need help with a range of barriers, including childcare, to progress in work; - Skills needs identified by the client group included ESOL, numeracy and help to increase their skills or retrain; - People talked about wanting to improve their situation for their families; - They often felt stuck in their current situation caught between the demands of their family and limited work opportunities they were often time poor ; - Most noticeably, people had some ideas about skills needs to help them progress, but usually no idea at all about where to begin to identify help and support that might move them forward. From our work with Local Authorities we learned that: - Our target group is known to the Local Authority precisely because of their housing benefit claim; 7

9 - The Local Authority retains information about each person, (and their immediate family), which could be used to segment and prioritise the cohort group; - Discussion on wider issues such as skills, employment and progression are not part of the housing benefit claim; - There is a significant cost burden from Temporary Accommodation cases and recently increased arrears of council tax following welfare reforms. From surveying employers, we learned that most can see that supporting the progression of low paid workers will help overcome skills shortages and skills gaps. Eligibility Following customer insight, the target group for the Skills Escalator has been defined as those who are: - In employment with skills at level 3 or below who are full time/part time or self employed; and - Housed in privately rented sector and in receipt of housing benefits, (Local Housing Allowance) and/or working tax credits; - Or employed, (as above) and housed in Local Authority Temporary Accommodation. Limitations of the present customer journey There are a number of opportunities available currently to employed people in the private rented sector with low skills including advice and guidance interviews with NCS, paid for/cofunded adult skills training, and some support for childcare. Together these could lead to higher earnings. However our client group is not actively targeted for help. It is largely up to individuals to be motivated enough to find their own way to opportunities in the system. Most people have little idea where to begin. The limitations of the present customer journey are represented below: 8

10 Limitations of current customer journey Work Hounslow NCS Skills Employers Better jobs Access of above depends on individual's motivation Claim for Housing benefits No direct link between claim and help available Debt advice Residents guides Some referral possible to these Changes in circs and reviews Our evidence suggests in the housing benefit claim process, referrals for employed people, housed in the private rented sector or temporary accommodation are likely to be limited to residents guides and to CAB/other bodies for issues such as debt. West London is one of two areas in the capital with a high concentration of low paid residents, (the other is NE London). Around 18 per cent of employees living in London were low paid between 2010 and The proportion of residents paid less than the London Living Wage was highest in Newham (33 per cent), followed by Brent (30 per cent). Around per cent of Hounslow employees, per cent of Ealing and Harrow employees and per cent of Hillingdon residents were low paid over the same period. By contrast, only one in ten of those living in Kensington and Chelsea were low paid. 9

11 Low paid residents by borough Why Local Authorities are interested in the group The role of local authorities in the delivery of the UK benefits system is changing. The administration of housing benefit will be wound down as Universal Credit comes into effect. Councils have new responsibilities to administer council tax support and local welfare schemes, which make it an appropriate time for local authorities to consider helping people in work progress. The Skills Escalator programme is consistent with the ambitions for greater localism and devolution of skills and employment to a more local level. There is also evidence of pressure on services in West London, exemplified by data from Hounslow 6 : - The Discretionary Housing Payment (DHP) Budget was expected to be fully spent in 2013/14 with a standstill budget for 2014/15; - At February 2014 there were 36,721 people in employment housed in the private rented sector (PRS) claiming housing benefits across the six West London boroughs. These figures have increased by 4,500 (14.1%) since April 2013; - The numbers of people housed in Temporary Accommodation (TA) are 9,458 (Dec 2013). Temporary Accommodation (TA) cases increased by 54% in the year to September Data from Hounslow indicates 36% of people in TA were in part/full time employment. The average length of stay in Harrow and Hounslow in TA is respectively 7-12 and five years. - Council tax arrears are increasing. In September 2103 there were 5,000 council tax reduction scheme cases (CTRS) who had yet to pay anything towards council tax, 33 per cent of CTRS cases. The average shortfall is 110 pa 7 ; - There is concern in Hounslow and more widely about the increase in private sector rents and the decline in private sector rented accommodation available. Landlords 6 We have focused on gathering evidence from within LB Hounslow. Discussions indicate that other boroughs have similar issues. 7 Welfare Reform Policy Briefing, London Borough of Hounslow, September

12 have become less willing to rent to benefit claimants. This is recognised as a London wide problem 8. Reductions in family sized accommodation are particularly noticeable, not only in Hounslow but across London. There has been a 1.8% increase in wages compared to a 5.5% increase in private rents in Greater London. Increased rents in the private rented sector are having a financial impact on both individuals and local authorities, which are not sustainable longer term. At the same time there is scope to help employed people with low skills and low incomes benefit from the National Careers Service (NCS) and other services, providing a real opportunity for the Skills Escalator project. There are no barriers identified by DWP that should prevent local authorities working with the client group selected. Skills Escalator Programme The co-design process has identified the beneficiaries of the Skills Escalator programme as being individuals, employers, Local Authorities and central government. The design of the Skills Escalator responds to insight from customers and the co-design about what is needed to help individuals progress: Skills Escalator model Sign posting Entry point Civic Centre CAB Library Employer Children's Centre Credit Union On line service Money may be first issue Money, debt housing etc NCS Childcare Skills Click for further support Adviser service Longer term support Triage service Advise /assess Action plan Advocacy Follow up Skills Escalator Guidance Skills Job brokerage Secure employment Use CarePlace platform Case worker 1:200 The Skills Escalator model incorporates: - An online service with access for the target client group to an Adviser; - Referral of the client group to an Adviser by the local authority s housing benefits team, who could prioritise employed people in the private rented sector or temporary 8 A new report by the London Assembly Housing Committee entitled Assessing the consequences of welfare reform, has found that landlords across the capital are increasingly more reluctant to rent to housing benefit tenants, which is affecting one-third of claimants. 11

13 accommodation who could benefit from support. This process would also pick up those without access to the internet; - A voluntary programme backed by a joint commitment to an action plan once a client engages with an Adviser; - The Adviser service will deal with both self referrals and those referred by housing benefit teams; - Advisers will be action plan focused and help provide wrap around support from current mainstream services; - Employer participation should enhance the outcomes that can be achieved; - The programme should focus on increasing the soft and hard skills and qualifications needed to progress; brokerage with employers, including work shadowing and other opportunities. The Skills Escalator service is based on helping 6900 employed people on housing benefits and a further 450 employed people housed in Temporary Accommodation over five years. Given pressures on local authority expenditure, our plans are designed to create a workable online service based on the platform of West London Alliance s (WLA) CarePlace website. The Skills Escalator will benefit from the functionality and the development costs already invested by the West London boroughs. An essential feature of the Adviser service will be a personalised approach linked to wrap around support for all the issues and barriers that an individual might face. The Skills Escalator Adviser will build upon successful models such as NCS advisers. A ratio of one Adviser to 200 clients is proposed as a result of benchmarking with housing staff. Two models have been considered for delivering the Adviser service: - In house delivery by each Local Authority with employed staff; - An outsourced contract commissioned on behalf of six Local Authorities and deployed locally. An outsourced contract is recommended for full implementation. There are indications that the Adviser/Skills Escalator model should fit well with the Mayor s ESIF Strategy for as it includes a priority to support low skilled people in employment. This may enable a bid to be made to cover some of the costs of the service. The success of the Skills Escalator project is likely to be enhanced by the involvement of employers. There is a good business case to be made as they face difficulties in recruiting, (skills shortages), and in achieving maximum productivity as a result of current gaps in skills, (skills gaps), in their West London workforce. Asks and offers are set out in Section 4. The greatest barrier to implementation of the Skills Escalator is the lack of funding support for skills for people in employment on means tested benefits. The most critical ask is for upfront funding to make training possible and to make skills acquisition as affordable for qualifications at level 2 and below as Advanced Learning Loans doe for level 3 qualifications. This ask links directly to wage progression and should unblock benefit savings as an individual s earnings increase. Proposed governance arrangements include a steering group with external partners, and an accountable body as either a lead Local Authority or WLA to ensure the success of the 12

14 locally deployed programme. In principle, it has been agreed that the London Boroughs of Hounslow and Harrow will become early adopters of the Skills Escalator in 2014/15 to enable proof of concept. Benefits and Costs Over five years, using the New Economy model the cost benefit analysis, shows positive gains for working with employed people on benefits housed in the private rented sector and in temporary accommodation, as follows: New Economy CBA benefit category Private rented sector Temporary Accommodation Combined CBA Fiscal Economic Social The majority of cashable benefits would be attributed to DWP. This indicates that the Skills Escalator is worth pursuing further. 13

15 1 Aims and Objectives This report summarises the work of the West London Whole Place Community Budget (WPCB) Skills Mismatch workstream. Consultation, desk research and co-design have led to the development of a proposal for creating a Skills Escalator to stable and secure employment. Skills Mismatch Workstream The objectives of the Skills Mismatch workstream were defined as being to reduce the disparity between the high skills requirements of jobs available locally and the lower skill levels of many of the resident workforce. Work began in earnest in late October 2013 when three propositions were tested with stakeholders. As a result of feedback, an option appraisal was carried out, which was tested with a smaller number of partners. The November WPCB Programme Board agreed this proposal should be taken forward to the business case stage. This proposal is now known as the Skills Escalator to secure employment. Transformational Ambition The Skills Escalator is designed to be transformational, replicable and scalable. The numbers of those in work on low pay in the private rented sector and in local authority temporary accommodation who are and claiming housing and other benefits are increasing. Over and above benefits, there is little central or local government support for this client group so the programme is innovative. There are also significant numbers of people who churn between relatively short periods of employment, (while claiming these benefits), and unemployment. The Skills Escalator will help these people progress and increase their earnings through personalised advice and skills acquisition, the overcoming of any barriers to progress, and/or working more hours to increase their earnings. The CBA for the Skills Escalator indicates that there should be significant economic, fiscal and social benefits to be gained by introducing this agenda into the arena of housing benefits. As important, is the ambition to help people achieve settled and secure employment that delivers real income gains to the individual/their household, more secure employment, and results in the exit from, or significantly reduced dependence on benefits. The Skills Escalator sets out an important role for local authorities in commissioning and ensuring delivery of this service, though central rather than local government will gain the majority of the fiscal benefits. An important linked economic benefit will be the opening of some entry level job opportunities behind those who progress in the labour market. The service transformation/redesign elements include: - Integrating Employment Adviser to work with the housing teams on the Skills Escalator project; - Considering the Skills Escalator group favourably to access the boroughs adult learning service for courses in numeracy, literacy, IT and ESOL in particular; - Channelling clients to the National Careers Service to gain an action plan focused on wage gain; - Overcoming barriers using knowledge of wrap around local services gained from working on welfare reform; - Use of S.106 funding where eligibility allows this; - Using existing links with business to target employers with skills shortages with suitable candidates and appropriate skills provision. 14

16 An example of the rationale for helping this client group was perhaps encapsulated best by a person in one of our focus groups, who said: I ve spent 24 years as a carer, working 50 hours/week. I want to be able to earn enough not to be dependent on benefits. I want to be independent and a contributor. On benefits, your life is not your own. Every action I take, or change in my circumstances, has to be reported to the Civic Centre. Student, Uxbridge College Rationale The rationale for this proposal stems from an increasing recognition of the day to day challenges faced by those in employment on low incomes. A number of recent reports have highlighted: - For the first time in 2012 more working households were living in poverty in the UK than non-working ones. Just over half of the 13 million people in poverty, surviving on less than 60 per cent of the national median (middle) income, were from working families 9 ; - Those who have low pay frequently become stuck in the labour market. Of those who were low paid in 2002, almost three quarters (73 per cent), had not escaped low pay by ; - One in eight workers over the age of 25 remain stuck in low pay for at least 12 months, representing some 2.9 million employees. The Social Market Foundation argued for a Skills for Progress programme to reduce the benefit bill, with tax credits going to working households currently costing the state 21 billion per year 11 ; - The risk of poverty is much higher for children in couple families where only one parent works 12 ; (Joseph Rowntree report, 2013); - Personal debt levels are at record levels, an estimated 3.9 million British families would be unable to pay their rent or mortgage for more than a month if they lost their job; half of all payday loan users (600,000) took out the loan because they had no other access to credit 13 ; - Shelter s June 2004 report, Living in Limbo, based on a survey of more than 400 homeless households living in TA in England, found that such accommodation has a devastating impact on the health, education and job opportunities of the homeless. The authors estimated that temporary housing was costing the taxpayer over 500 million each year at that time 14 ; - Numbers being helped by foodbanks tripled to 350,000 in the last year. This includes people on low incomes 15 ; 9 Annual Monitoring Poverty and Social Exclusion, New Policy Institute for Joseph Rowntree Foundation, December Starting out or getting stuck? Low wages in Britain, Resolution Foundation, November Making Progress: Low pay trap and lack of skills holding back UK s global competitiveness, Social Market Foundation, April Tackling in work poverty by supporting dual earning families, Rowntree Foundation Maxed Out, Centre for Social Justice, Quoted in UK Parliament briefing, April Trussell Trust,

17 Meanwhile public policy support has been focused principally on young people, (eg Apprenticeships), unemployed, long term unemployed and workless people, (eg the Work Programme), and as a result there has been very little focus on enabling progression for our target group. There is as a result some in-work support for Work Programme participants for up to two years to ensure employment is sustainable and providers payments are dependent on this being achieved 16. However most employed people on housing benefit are not Work Programme graduates. There is a strong economic, fiscal and social justice case for focusing on low skilled/low income people in employment to help them progress in the labour market. Welfare reform and impact on working people As levels of hardship increase, there is an impact on the costs of the benefits system. Low income working households are claiming housing related benefits in much greater numbers. Research from London Councils showed that: - By Christmas 2013 the majority of Local Housing Allowance claims in the capital were from working households, (of c.850,000 such households in total), and over 90 per cent of growth in these cases over the last 18 months came from people in work; - At February 2014 there were 36,721 people in employment housed in the private rented sector (PRS) claiming housing benefits across the six West London boroughs. These figures have increased by 4,500 (14.1%) since April 2013; - The numbers of people housed in Temporary Accommodation (TA) were 9,458 in Dec Data from Hounslow indicates 36% of people in TA were in part/full time employment. The average length of stay in Harrow and Hounslow in TA is respectively 7-12 and five years; - Data indicates that there were 36,721 such cases across the West London WPCB boroughs in February 2014 and over 9400 households in temporary accommodation, (December 2013), of which 36% were estimated to be in employment 17 ; - Recent research from the CAB indicated that council tax arrears arising from welfare reform are now the number one debt problem 18 : A recent report, for the LGA on Welfare Reform by Inclusion (2013), recommended focusing support on low income groups affected by welfare reform and that Community Budget projects might offer a way forward: So far, the over-riding focus [of welfare reform] has been on supporting tenants affected by reforms to Housing Benefit, (and in particular the size criteria and benefit cap). However this research has demonstrated that welfare reforms will have far wider impacts, and in particular on households in work and on low incomes. It is critical that councils and their partners are able to develop plans for how these wider households will be given access to the right information and support in order to manage impacts, budget effectively and where possible increase their incomes through work Based on survey of all TA cases in LB Hounslow by employment status May BBC News 26 May, Number in council tax arrears has rocketed, says Citizens Advice 19 The local impacts of welfare reform: An assessment of cumulative impacts and mitigations, CESI, LGA August

18 To date the thrust of public policy, including welfare reform, has been a work pays agenda to provide incentives for those who are not in work to gain work. Except for some in work support for Work Programme participants, there has been no equivalent targeting of those already in work claiming benefits to support them to secure better earnings and more stable employment. As a result, the client group may well remain stuck where they are now. In addressing the evidence above, the rationale for the project was to focus on those in work with low incomes, supported by benefits, who have scope to increase their earnings and progress to more settled employment. This group offer potential for a net gain to the public purse for less intervention costs than either the economically inactive, long term unemployed or short term unemployed. Our target client group should also have the propensity to help reduce skills gaps and skills shortages and therefore the skills mismatch evident in the West London labour market. What we are trying to fix The diagram below sets out the potential consequences of current policy on low skilled private sector tenants where current earnings do not enable them to function economically; and at a more macro level, the impact on the economy. What are we trying to fix... Economic Impact Low skilled/ low paid residents Skills shortages and gaps Arrears & debt welfare reform Fragile employment Reduced productivity/growth Move further out Leave job Unemployed Impact on Individual Greater numbers of working people in private sector rented accommodation are claiming housing benefits. This has an impact on public expenditure on welfare. If working people are not able to afford their rents and other costs, they may move further out. Greater travel time and/or costs could result in them leaving their job. Remaining where they are may lead to debts or an increase in debts. People need help to progress in the labour market to become economically self sustainable. 17

19 Impact Our research suggests there is a potential impact in four areas, upon individuals, employers, Local Authorities and central government. This is reflected in the table below: Impact of current policies Individuals - 75,000 people in west London want to work more hours than they do currently 20 ; - Private rents are increasing at a level well above inflation; - Some may be able to move further out to cheaper accommodation; - But travel to work times may become too long or too costly; - There is a risk that some individuals may leave their job and become unemployed; - For the majority who remain, debt levels may increase; - Potential adverse health impact. Local Authorities - Less family size accommodation available. Private landlords are more reluctant to rent to those on benefits; - Indications of temporary accommodation cases increasing in London boroughs, which may be partly associated with people building up arrears of rent and being evicted by private landlords; - Indications of council tax arrears building up as a significant problem for the future. - London Councils reported that Discretionary Housing Payments (DHP) budgets are inadequate. - Autumn Statement 2013 indicated DHP budgets will remain at 4million for 2014/15. Employers - There are significant levels of skill shortages in West London; - Similar levels of skills gaps in the current workforce adversely affect productivity; - As West London becomes less affordable for low income private tenants, the above can be expected to intensify. Central Government - Increase in Local Housing Allowance (LHA) claims from working households - Increases in working tax credit payments - Additional health and mental health cases Project Scope From the above, the target group for the WPCB project has been defined as those who are: - In employment with skills at level 3 or below and are full time/part time employed, or self employed; and - Housed in privately rented sector and in receipt of housing benefits, (Local Housing Allowance) and/or working tax credits; - Or employed, (as above) and housed in Local Authority Temporary Accommodation. As part of the co-design process it was noted that Local Authorities might be interested in the benefits accruing from working with employed people on benefits resident in social housing. However the CBA data has not indicated significant fiscal benefits from working with this cohort. The following are not in scope of this project: - People who are unemployed or long term unemployed; - Workless/inactive people, (except where there is a non working partner in a low paid working household on working benefits); 20 ONS data 18

20 - Those in employment who are in social housing. The co-design process highlighted that there may also be benefits to private landlords and this may explored further as part of the implementation planning stage. There should be minimal overlap with the target clients of other WPCB workstreams. There is some potential overlap with in work support for Work Programme graduates explored later. Potential Benefits Based on a programme of support for a cohort of people, the co-design process identified the following potential benefits for testing: Potential Benefits of a Skills Escalator Programme Individuals Employers - % individuals exit the benefits system and become economically self sustainable; - % individuals reduce dependence on benefits - Increase in Adult Apprenticeships - Increase in skills and qualifications - Some consequential job openings at job entry level - Some unemployed people may take up the vacated entry level jobs - Associated social benefits Local Authorities - Some reduction in temporary accommodation cases - Some reduction in Discretionary Housing Payments (DHP) - Some reduction in council tax arrears and increases in payment levels - Reduction in skill shortages and gaps - Increase in productivity, (reduction in skills gaps) Central Government - Some reduction in churn between work and benefits - Some reduction in LHA claims - Some reduction in in-work benefits and working tax credits - (subsequently Universal Credits) - Some reduction in costs to the NHS The co-design process strongly endorsed the positive benefits that could be gained from working with the chosen client group for all the parties above. The next section examines the case for change. 19

21 2 The Case for Change This section provides the case for working with employed people on housing benefits/working tax credits and housed either in the private rented sector or in local Temporary Accommodation. Together this information helps to provide an As Is position for the target client group. To date the project has found that while there is some support available to low skilled people in employment, none is actively or systematically targeted at our client group. The following are explored: - Customer Insight: What do we know about our client group from surveys, other sources and the current Customer Journey; - Feedback from employers; - Evidence of low pay in West London; - Why Local Authorities are interested in working with the client group, evidence for pressure on existing services and benefits relevant to employed people; - The Employment and skills offer relevant to the client group. Customer Insight What is known about the employed client group? The detailed evidence base on which this chapter is based can be found at Annex A. This section reports the results of customer insight gained as part of the project. A survey was undertaken with students of the lifelong learning service for adults run by the London Borough of Hounslow 21. The objective was to understand their motivation in seeking training, and the barriers they faced in progressing in work. In total there 174 questionnaires were completed by people who said that they were in employment. The respondents were predominantly female with 31 of the 174 men (17.8%). The majority were aged 35 or over (66%). Only two respondents were less than 20, and 44% were aged 35 or under. We did not ask whether people were claiming in work benefits such as working tax credits or housing benefits so there is not an exact match with the client group of the Skills Escalator model but it provides useful information about the potential target group. It should be noted that these people had already started to undertake learning and had already demonstrated the motivation to progress. This is perhaps reflected in the high score for those who indicated that they wanted to progress in either their current role or in another job. Many people indicated that in order to progress they needed to: - Improve their spoken English; - Improve their written English - Improve their numeracy; and - Add to their skills or retrain. However it should be noted that many of the students completing questionnaires were undertaking some form of ESOL provision and this may have skewed the results. Their learning barriers, together with the wage level they were seeking and desire to progress are shown below: 21 The questionnaires were completed during November Only those in employment have been analysed. 20

22 Learning Barriers It is also noticeable from the above table that around half of the people were looking for job at 10 an hour or below a relatively modest level that at the top end would put a ceiling on full time earnings of about 20,000 p.a. It is a concern that several people indicated that they would were looking for a wage of 5-6 an hour i.e. below the national minimum wage. This suggests that for many people already in employment their wage ambitions remain relatively modest. It is also possible that some people may set their horizons too low. Of the remaining 50% - a large number (31%) did not answer the question on wages at all. Of the 30 respondents (17.2%) who indicated their desire to earn more than 20/hour, 26 people indicated a desire to earn between 11 and 20.00/hour, (i.e. 15% of all respondents), and only four were looking for between 21 and 50/hour, (2% of all respondents). This information is set out below: Ambitions for earnings 21

23 The questionnaires asked about the barriers that people perceived they faced in making progress in the labour market. As might be expected, the need for childcare support featured most highly at 19% of all respondents, while other barriers such as debt and housing issues were relatively lower than expected. Of those people indicating that they faced barriers, many respondents selected more than one. The phrase earnings disregard has been used in the table to sum up concerns people felt about needing to make any increases in earnings worthwhile. But this may not be identical to the formal earnings disregard for those in receipt of in work or housing benefits. Barriers perceived From the analysis of the sample of questionnaires we can conclude that that some of our target client group are keen to progress, are willing to undertake learning to do so, have 22

24 relatively modest and realistic earning ambitions, and could need help with a range of barriers, including childcare in particular to progress in work. The current PRS and TA operational model Information has been gathered for two boroughs - Harrow and Hounslow. The Housing benefits operation for these boroughs residents in the private rented sector is very similar. In Harrow new clients fill an application form, make an appointment with Access Harrow, (the front line service based in Civic Centre), return to see the Housing officer with supporting documents such as ID and their tenancy agreement. Documentation is scanned and the case agreed / not agreed. Benefits are calculated on the basis of Local Housing Allowance. In Hounslow this process is administered by a front line revenue and benefits team, outsourced to Liberata, with back office support is provided by Hounslow staff. There is currently no discussion of barriers to or opportunities for progression as part of the claim in Hounslow. In Harrow, claimants may be referred to the employment team when they see the Housing Officer. The contact with the Revenue and Benefits team provides an opportunity for referral to the Skills Escalator Adviser, either directly or by applying criteria to the data. Subject to capacity, Hounslow s Customer Service team, Prevention and Advice and Landlord Mediation officers, should also be able to refer suitable people to the Skills Escalator, as well as partners such as the Citizen s Advice Bureau. The Temporary Accommodation system is also similar in both Harrow and Hounslow. Each household placed in temporary accommodation is assigned a housing caseworker who will work with them, either to return to their former home or to obtain alternative housing. The case worker visits the client in their accommodation on at least a quarterly basis. Case workers consider the location of employment if an offer of accommodation is made out of borough. These case workers are in a prime position to refer their employed clients to the Skills Escalator. The bulk of the temporary accommodation stock is leased from private landlords and managed through an in-house private sector leased scheme. Council-owned and managed hostels, as well as Bed and Breakfast are also used. The average length of stay in TA is over four years in Hounslow and seven 12 years in Harrow. - Our target group is known to the Local Authority precisely because of their housing benefit claim; - The Local Authority has information about each person, (and their immediate family), which could be used to segment and prioritise the cohort group; - Discussion on wider issues such as skills, employment and progression are not part of the housing benefit claim; - It seems sensible that such issues are separated from housing benefits issues as they need different skillsets in staff; - Front line operations are already stretched and for a variety of reasons, (e.g. nature of the outsourced contract), it does not make sense to add to this role; - There is a case for adding employed people in Local Authority Temporary Accommodation to the client cohort; - There is evidence of people churning between employment and unemployment. Employed people claiming Housing Benefits Time was spent with front line revenue and benefits operations over a period of two days within the London Borough of Hounslow. This team deals with people claiming housing benefits and is supported by a back office housing benefits team. Over two days the Skills Mismatch project lead witnessed about 30 interviews. As a result, we were able to learn 23

25 about the circumstances of individuals. In a number of cases, the Project Lead was able to have a separate discussion with some individuals about their employment situation. These personal stories are reflected in Annex B. A number of common themes were identified: - People talked about their desire to improve their situation for both themselves and their families; - They often felt stuck in their current situation caught between the demands of their family and limited work opportunities they were often time poor ; - Some were balancing two or more part time jobs; - Those who cycled between employment and unemployment felt some pressure to take any job when they sometimes longer term ideas that would help them progress; - Most noticeably, people had some ideas about what they might want to do differently but usually no idea at all about where to begin to identify help and support that might move them forward; - Less than half seemed to have no inclination to progress; - Some claimants had non-working partners who might be able to work in due course; - They identified a range of barriers that they would need help with, which were similar to the barriers identified from the skills survey above. Feedback from employed people in Temporary Accommodation We sent out 75 questionnaires, (see Annex C for details), to people identified as employed and housed in local authority accommodation. Of these, 24 were returned, a high response rate of 32%. Of these 18 fitted our criteria for the Skills Escalator client group. This suggests some people s employment status may have changed, indicating volatility in employment. Of those responding 58.8% (10) were women and 41.2% (8) were men. Of the women, two were non working partners with partners in work. One had a one year old baby and the other said they wanted to return to work when their child was in full time education. The majority (66.6%) were aged years, with 16.6% aged years and 16.6% years. The questionnaires were designed to find out about people s employment, their skills and qualifications and their aspirations. In addition one person was visited in their home. The results are presented below. Summary The results below suggest it will be important to consider progression opportunities for all adult members of the household. The majority of people surveyed have stable employment in low level jobs. It will be important to consider involving their employers with their permission, the scope for working more hours and opportunities for progression via skills acquisition. The majority of people had low level qualifications but a range of competences and relatively realistic ideas about the skills that might help them progress. Around half were willing to meet an Adviser which would generate a decent cohort for a voluntary programme. The majority had some access to the internet by phone, laptop or internet cafe, which should make an online service possible. Overall, the survey suggests that the Skills Escalator could prove beneficial to the TA client group. Employment, hours and earnings The respondents were asked to describe their current occupation. Occupations are shown below and are mainly lower level occupations. Of those working as self employed, they said their work was as a cleaner, translator, and a builder. 24

26 Occupation Self employed 3 Cleaner 2 Insurance 1 Clerical -1 Cameraman -1 Sports coach 1 Work at airport 2 Healthcare 1 Reception/sales 2 Supervisory 1 Three people said they had non-working partners who might be interested in working. This suggests looking at the whole household s circumstances will be important in progression. Twelve people indicated their hours of work. Of these a third of the respondents were working less than 20 hours, 41.7% between 20 and 35 hours and 25% 36 hours or more. They were asked whether they were willing to increase their hours: 33% said yes and 66% said no. This suggests there is some scope to increase earnings via extra hours worked and this is an area where an Adviser might wish to probe. Of the 15 people who replied about their earnings, 80% were getting between minimum wage and London Living Wage (LLW), (however some people appeared to be paid below minimum wage). One person was earning LLW, and two more than LLW. This suggests there is scope for wage progression in the client group. Of the 13 people who responded about the length of time with their current employer, 30.8% had been with them for over six years, 30.8% for two to five years and 38.5% for less than a year. This indicates the majority have stable employment records. This suggests that it will be important to involve the employer in the discussion about opportunities for progression, with the individual s permission. The length of stay is shown below: Length of stay with current employer Skills, qualifications and aspirations There were nine responses to a question about qualification level. This showed a wide spread, though the majority had no or low level qualifications as indicated below: 25

27 Current qualifications: In addition to qualifications, respondents were asked to describe their skills and most listed a number of competences. They were also asked about previous jobs they had done. Most people had a fairly extensive job record. While the majority appeared to be working in roughly the same sector and occupation over a period of time, a number of people had done a range of different, often low level jobs. The vast majority of people expressed a desire to stay in Hounslow or within neighbouring boroughs within a range of about five miles of the Hounslow boundary. One person said how difficult life had become since being moved to Slough. People were asked about whether they were willing to train to improve their skills and earnings. Of the 12 responses to this question, 58.3% said yes and 41.7% no. One of the respondents was already studying full time. This suggests some of the TA client group is willing to train/study to progress, which is very encouraging. The majority of people replying positively to the question about skills and this is an encouraging indicator for the for the Skills Escalator programme. Only one or two people responding to this question said they were unsure. In these cases an Adviser might support decision making. Types of skills interested in: (one score each except where indicated) Driving instructor IT Working with children Nursing/midwifery 2 Food prep Paralegal Cameraman Plumbing /electrical Security Beauty therapist 26

28 Of the skills listed above, three people seemed to be interested in becoming self employed. This progression route will need to be included. Overall, the above list of skill ambitions seem realistic and in many cases achievable. Barriers and access to the internet People were asked about the barriers they faced to progression. The results were similar to the survey carried out with the lifelong learning service and are shown below: Barriers perceived, (11 responded usually ticking several boxes) Written/spoken English 8 Numeracy 7 IT 7 Health issues 1 Children/childcare 5 We asked people about whether they had an up to date CV. The majority (60%) did not. This suggests updating the CV will be an important part of the Skills Escalator programme. We were keen to know whether online support might work for some of the client group and they were asked about their access to the internet. The results below show that the majority have some access, which should make an online service worthwhile. The needs of those without such access will need to be taken into account: Access to the internet Of the 16 people who replied, half were willing to meet an Adviser and half were not. The low rate of response may be linked to inclusion in the question about a move from temporary accommodation to the private rented sector. We know that many would prefer social housing. Nevertheless, this response rate suggests that there should be enough support for 27

29 a voluntary programme among those who are working and housed in temporary accommodation. Feedback from employers A survey was sent to 20 businesses of various sizes and sectors, (including public and private), operating within Hounslow. Twelve responses were received, a response rate of 60%. The questionnaire and responses can be found at Annex C. A salary threshold of 25,000 or below was set for some questions. Through the customer insight work and case studies it is apparent that this is a threshold that would enable many Skills Escalator clients to reduce dependence upon or leave benefits. Some questions allowed multiple responses. Most of the employers surveyed had experienced some difficulty in recruiting people for some jobs at around 25,000 and below. This included professional jobs such as community nurses, health visitors, fabric maintenance engineers and employability advisers; admin jobs such as support staff and payroll clerks; service jobs such as housekeepers, landscaping operatives and drivers. Three employers, (25%) indicated they had no difficulty in recruiting at this level. Where people had difficulty in recruiting, three responses indicated they tried to develop people within their organisation for new roles and one mentioned skills mix redesigning jobs to blend a range of skill levels. Others talked about the variety of recruitment options they had tried when recruitment was unsuccessful, eg websites, open days, staff referrals, word of mouth, adverts on the back of vans, and the use of temporary staff. One employer said they received responses, but were concerned about the quality of the applicants. Employers were asked about skills gaps in their workforce for roles around 25,000 or below which held back the progress of the organisation. There were a number of set responses and five responses were received for each of the following: IT skills, spoken English, written English, numeracy, job attitudes or soft skills. Two responses indicated a lack of technical skills, which included operating hand held IT for data collection and lack of understanding of employment sectors and working with groups of young people. We wanted to test for replacement demand caused by people paid at 25,000 and below who might retire in a few years time. Although 41% of responses indicated that this was not an issue, several employers expected shortages in a number of areas eg community nursing and health visitors, fabric maintenance engineers, payroll, cleaners and landscape operatives. There is a clear overlap between these jobs and those where employers were having trouble in recruiting now. We asked what kind of training employers provided now. Multiple responses were allowed: Type of training Percentage of respondents using In house training/company specific 83% Apprenticeships 33% On the job training 75% 28

30 Off the job training 42% Other (distance learning) 8% As expected on the job and in-house training received most responses, with Apprenticeships below off the job training. We asked how employers recruited when opportunities within their organisation occurred. 91% advertised externally and 82% recruited within the organisation. This indicates that most employers use both methods. We asked what help people might need who were near but not yet assessed as ready for such an opportunity. While 42% were not sure and one thought they could do this in house, others suggested external training, further management development, a tailored development plan and mentoring. Finally we asked whether employers thought an initiative to help people on low incomes progress could be relevant to their organisation - 92% said yes. Only one employer said no. There is a positive indication that employers do train in house and offer job opportunities when they occur within their organisations. The skills that are likely to hold organisations back from progressing are often quite basic. There is recognition by some employers that development programmes may enable people to progress who are not yet ready to progress. It might be helpful to do more work as part of the next phase of development of the programme to help understand how employers might respond to an approach by an employee about progression, or a third party on behalf of that person. From the above there appears to be positive employer interest in and support across a range of sectors for an initiative like the Skills Escalator. There is evidence of some existing difficulty in recruiting at jobs around 25,000. There is evidence of replacement demand needs as people retire from the labour market. This could suggest targeting employers on a number of sectoral initiatives might be possible and productive. The limitations of the present customer journey At present, as indicated above it is largely up to individuals in the Skills Escalator target group to be motivated enough to find their own way to opportunities in the system. Low skilled/low income people are not generally a current public policy priority, except for graduates of the Work Programme now in work. Those in receipt of LHA will have contact with their local authority revenue and benefits teams/customer service teams. They are unlikely to be referred to any particular sources of help as the focus is on benefit capped cases. They may be given hard copy guides to services for residents if they need access to money management or other services, or find these eg via the Citizen s Advice Bureau. They are not a priority for Jobcentre Plus though they can access job vacancies if they choose to do so. Some may navigate their way to such help online, either via the local authority website or others. Those who want careers advice may find their own way to the National Careers Service (NCS) but they are unlikely to be referred there via local authorities/others. Evidence from the NCS suggests that they would like to help more employed people and none of the people interviewed as part of the customer insight work had heard of NCS. Some may 29

31 attend college open days or identify other training provision online, but again it is unlikely they will be referred there by a third party. For those who do, they will then be able to access a range of help, including employability support. Individuals may contact their employers about training and other opportunities. But it is up to the individual to do this people who may be struggling with both the demands of work and household finances. A number of the stories from the customer insight sessions are provided below to indicate the current customer journey: Case Study: Ivan: Ivan is in his late 30s with a wife and 4 children aged His wife is not working. He was self employed until early January when the construction company for whom he worked went bankrupt. He lives in private sector rented accommodation. He has been doing well paid ground work. In the past he has been both a bus driver and licensed door supervisor. Ivan is confident he can get a job quickly, but because of health problems, he would prefer to change direction. He has recently claimed JSA and asked JCP to send him on a course to improve his English. He would like to do an IT course as he has an ambition to get an office job using IT within construction, transport or security sectors he understands. His priority is to support his family long term. Apart from the help available from Jobcentre Plus, Ivan does not know how to take forward his ideas. Case Study: Sunita Sunita is in her 30s with four children. She and her husband returned from Wales fairly recently due to the husband s business collapsing and his poor health. She has been doing care work back in London on zero hours contracts but found the hours impossible and too unpredictable for her family. She wants to earn at least 10.00/hour. She worked as dental nurse after school and was not qualified. Subsequently, she has gained childcare and beauty therapy qualifications. She has recently made a JSA claim as following training with an in country escorting service attached to the airport. She has health and safety, fire and security clearance for the airport. The training did not go well she thinks that she did not fit as she was the only non ex-services trainee. Her training was terminated by the company at week 4. She still wants to do in-country escorting work at the airport. She is willing to do night shifts. It is not clear whether she was trained via Heathrow Academy. She is now applying for similar jobs but struggling and her confidence is low. Sunita knows that she is the main earner and is discouraged and unsure how to proceed. Case Study: Kieran Kieran is a nursing assistant at a major London hospital. He has worked there for four months and after one year has the chance to apply for nursing training which would be full time and paid. He is mid 30s with two children in private sector rented accommodation and receives housing benefit. Kieran is keen to progress but is not thinking at the moment about what he might do to improve his chances of being accepted for full time training. Markus Markus is in his 30s. He is married with two children one of whom was born four weeks ago. He lives with his wife in a private sector rented accommodation for which he pays 1250/ month. He is a self employed stock handler and has been doing the same thing for 8 years in this country and for a total of 20 years. He sees no prospects for improving his position except by moving further out of London, which is where the work is. This is not practical. He has not 30

32 thought about how he might improve his prospects and right now is too busy with the new baby to do this. Markus s spoken English needs improving. The present nature of the customer journey is represented below. The diagram emphasises the separation of support to progress via advice and skills from the current housing benefits system, where referrals are likely to be linked to residents guides and to third part organisations such as CAB on debt etc: Limitations of current customer journey Work Hounslow NCS Skills Employers Better jobs Access of above depends on individual's motivation Claim for Housing benefits No direct link between claim and help available Debt advice Residents guides Some referral possible to these Changes in circs and reviews The customer journey above indicates that it should be possible to work with individuals who are interested in improving their situation, identify a personalised plan and access to appropriate support to help them progress. This section goes on to highlight other evidence supporting the case for working with the cohort groups selected. Employment and income in West London Employment In 2010, the six WPCB boroughs in total provided 793,000 jobs 16.6 per cent of London s total. Around 50 per cent of jobs in West London demand high skills, (level 4 and above), whereas only 45 per cent of local residents are qualified at this level. Around 20 per cent of residents have a level 2 qualification or lower, but only around 10 per cent of jobs are at this level. London has an hourglass economy with a tight corset of jobs available at level 3 qualifications, with the majority of jobs available at level 4 and above, or at level 2 and below. Indications from LDA projection to 2020, conducted in 2010, suggested that these trends would increase with a continued drive towards jobs requiring high level qualifications. 31

33 At a time of sluggish economic growth, there needs to be more active support to help those with the potential to reduce skill shortages and skills gaps. In practice these are most likely to be low skilled /low income employees who have a track record in employment, but may need additional support and incentives to progress. Evidence shows however that it is those with no/low qualifications who are less likely to add to them post compulsory education and are likely to need encouragement to do so. New labour market entrants are more likely to move into entry level jobs, rather than higher up the ladder. Arguably, skills shortages and gaps in labour markets in expensive housing areas can best be alleviated by helping people already in work to move up the ladder. The low skill/low earning group merit support as their progress within the labour market should open up some additional entry level opportunities for those who are unemployed or workless. As a result of the evidence above, there is a good case for this project focusing upon people in employment with low skills and low incomes; and for defining low skills as those qualified to level 3 and below. The co-design workshop supported this criterion, though considered there ought to be exceptional circumstances where people on low pay with level 4+ skills might be considered for inclusion where they faced particular barriers to progress. Low pay in West London In London 81.3% of Londoners earn more than the London Living Wage, (currently 8.80/hour), but 12.5% earn less than the poverty threshold. Within London there are two areas with concentrations of low paid residents. One is West London and the other is NE London. The diagram below shows low pay rates for residents by borough. Around 18 per cent of employees living in London were low paid between 2010 and The proportion of residents paid less than the London Living Wage was highest in Newham (33 per cent) followed by Brent (30 per cent). Meanwhile around per cent of Hounslow employees, per cent of Ealing and Harrow employees and per cent of Hillingdon residents were low paid over the same time scale. By contrast, only one in ten of those living in Kensington and Chelsea were low paid over these years. The additional costs of living in London, of which housing costs make the challenges greater for people on low incomes. 32

34 Low paid residents by borough The geographical concentration of this is very different from either the map for unemployment or worklessness. The data showing the boroughs with the lowest paid jobs would look very different effectively a doughnut shape, where as the highest paid jobs are in the centre 22. There is significant evidence that higher earnings are directly correlated with higher skill levels. Increasing the skills levels of West Londoners should enable them to earn more and support local economic growth as both employees and consumers of goods. The data provides a positive correlation between skills acquisition and wage increase. There is a need to focus upon increasing skills for low paid residents for the West London WPCB boroughs where there are high concentrations of low paid residents. There is an opportunity to increase their economic self sustainability and to increase local economic growth in their role as both employees and consumers of goods. Sectoral dimension to low pay The diagram below indicates a clear sectoral dimension to low pay. Around 30 per cent of low-paid jobs are in the retail and wholesale sector and a further 20 per cent in hotels and restaurants. Overall 67 per cent of jobs in London are in private, public or community sector services but only accounted for 37 per cent of low paid jobs, (205,000 jobs). This data supports the Work Foundation s and Resolutions Foundation s report about people who are stuck on low wages for example in retail. It also provides corroboration for the fact that some low paid people will need to think about applying their skills in a different sector and /or upgrading them in order to progress 23. The data from Action Acton also shows a significant 22 Maps supplied by Action Acton based on Annual Survey of hours and earnings, ONS, average for 2010 to Ibid data supplied by Action Acton 33

35 ethnic dimension to low pay which indicates that there will need to consider targeting specific groups of the community for the Skills Escalator programme. Low paid jobs by sector There is both a sectoral and ethnic dimension to low wage rates across West London, which will need to be taken account as part of the Skills Escalator project. Digital exclusion The LEP s ESIF Strategy indicates some information about levels of digital exclusion in London - 86,000 of people earning less than 15,000 p.a. have never used the internet; 13.3% of the adult BAME population have never used the internet; and digital exclusion is higher among women than men. It will be important to consider how the needs of those who do not have access to or who have no familiarity with the internet are catered for by any programme of help. The next sections covers why Local Authorities are interested in working with the cohort group selected. Why local authorities are interested in people on low incomes Statutory Duties Local Authorities have a statutory delivery role of distributing key benefits for residents, paying Housing Benefit, Council Tax Benefit and Discretionary Housing Payments (DHPs). Under DHP, councils may make payments of financial assistance to Housing Benefit and Council Tax Benefit claimants who appear to them to require some further financial assistance in order to meet housing costs Child Support, Pensions and Social Security Act

36 The Housing (Homeless Persons) Act 1977 also places a duty on local housing authorities to secure permanent accommodation for unintentionally homeless people in priority need. Authorities duties towards homeless people are now contained in Part 7 of the 1996 Housing Act. The key feature of the Welfare Reform Act 2012 is Universal Credit (UC), which, by bringing together a collection of working-age benefits into a single streamlined payment, intends to help claimants and their families become more independent and, in the process, simplify the benefits system. Local Authorities will have a key role of providing the Local Support Services Framework (LSSF). The LSSF should be put in place for the introduction of UC, to help claimants who may require extra support to access the system. Besides support around budgeting and money management, the framework should move the claimant closer to the jobs market. The latest version of the LSSF was published by the DWP in autumn The role of local authorities in the delivery of the UK benefits system is changing. The administration of housing benefit will be wound down as Universal Credit comes into effect and councils have new responsibilities to administer council tax support and local welfare schemes. The new responsibilities make it an appropriate time for local authorities to become involved in a Community Budget approach to helping people in work progress in the labour market. In due course LHA and other in-work benefits, such as Working Tax Credits, will become part of Universal Credits, though the date for full roll out is receding from As Universal Credits are phased in, Jobcentre Plus will have a responsibility for working with employed people, which is not part of their current core remit. Working with the client group proposed in the Skills Escalator model ahead of full Universal Credit implementation could offer DWP valuable lessons. There will need to take account of earnings disregards. To overcome the earnings disregard applied to people on housing benefit or working tax credits, who increase their earnings, there will be a need to improve earning to the previous level of their benefits plus an additional margin in order to generate a sense of improved economic status and wellbeing. Benefit changes affecting people on low incomes Local Housing Allowance (LHA) and Temporary Accommodation Over 95 per cent of the growth in LHA receipt in the two years from May 2011 can be accounted for by households in work. In the West London WPCB six boroughs, the LHA recipient households have an average of one child each so there are also over 44,000 children affected where households may be struggling to make ends meet. Meanwhile rents have risen. The latest figures show that from August 2012 to August 2013 the lowest quartile of private rents in London have risen by 10 per cent, (12 per cent in inner London and 8 per cent in outer London 25 ). The number of London households in temporary accommodation has risen in every quarter since reforms to LHA were implemented in 2011 having fallen in every previous quarter since mid At Quarter 3 of 2013, there were 42,260 London households in temporary accommodation, more than the rest of the country put together. Annex D presents the 25 Valuation Office data provided by London Councils 35

37 rationale for working with people who are employed housed in Local Authority Temporary Accommodation. Discretionary Housing Payments (DHP) Many households impacted by welfare reforms are relying on local authority administered Discretionary Housing Payments to sustain their current tenancies. DHP will not be able to fund households in the long term and councils will have the responsibility of trying to rehouse these households, (many needing family sized accommodation), into more affordable housing, which is very scarce. Council Tax Support Council Tax Benefit, payable to eligible households in part or total fulfilment of Council Tax was abolished as a national benefit and the funding, minus 10 per cent, devolved to councils in order to establish localised Council Tax support schemes. The average payment a person will now have to make for example in Hounslow is 110 p.a. Arrears are growing and debt recovery action is now commencing against those who have not made any attempts to pay. The CAB has recently highlighted that council tax arrears have become the number one debt problem they are consulted upon 26. There are clear indications that challenges for working households in receipt of housing benefits are having an increasing financial impact on both individuals and local authorities, which are not sustainable longer term. The next section considers what support is available now to employed people on low incomes. Employment and skills offer relevant to the client group Levels of public and private expenditure A report prepared for the LEP In 2012, estimated that total investment in employment and skills support, including private sector investment, is approximately 8.4 billion each year. Private sector investment, in the form of training and foregone wages, accounts for four-fifths of total investment at approximately billion. Public sector investment is much smaller but still accounts for 1.66 billion each year. Most of this investment is concentrated on skills for young people and adults. Estimated total annual spend in London is around 700 million, including: - c. 577 million on adult skills via the Skills Funding Agency (SFA), with approximately 381 million for London s Colleges. The majority of this budget is concentrated in the adult skills budget; - c. 69 million on employment programmes via the Department for Work and Pensions. This includes investment in the Work Programme, Jobcentre Plus support and ESF funding amongst other support 27. There is no data available to indicate the levels of expenditure on those who are in employment. One of the four recommendations in the report was that there should be a 26 BBC News, 26 May Right Skills, Right Jobs, Final Report, Kris and Lovedeep Vaid, LEP, Dec

38 progression programme aimed at moving people in low paid work and on in-work benefits out of benefits altogether. Our approach is consistent with that goal. Advice and guidance In our research and interviews, many people have pointed to the need for effective careers information, advice and guidance for both young people and adults. The new National Careers Service (NCS) 28, launched by BIS a year ago, presents an opportunity for the project. Low skilled groups are one of the NCS s priority groups and eligible for up to three free advisory sessions. Low skills are defined as people qualified at level 3 or below and this definition will continue once the service is re-procured in October This NCS priority coincides well with the target client group of the Skills Escalator project. Feedback from the NCS in London suggests that they are keen to expand the number of employed people that they work with and would benefit from other organisations, including Local Authorities, identifying and channeling clients to their service. We are grateful for the NCS s support on a small pilot between NCS London and Hounslow in June/July 2014, to help prototype and test the Skills Escalator model. Results are reported later in this document, (see page 51). There is significant scope to help employed people with low skills and low incomes benefit from the NCS service and this represents a real opportunity for the Skills Escalator project. Adult Skills There have been a number of recent changes to adult skills provision which may affect the target client group. The funding eligibility rules changed from September 2012 in response to the austerity measures required across government. There is a 15% cut in the adult skills budget planned from 2014/15. The eligibility conditions to receive free training are governed primarily by the age of an individual and their existing level of qualifications, rather than by their employment status. Eligibility is complex and not easy for individuals to understand. Our interpretation of the funding rules is that free education/training is available to those aged 18 and below, adults without qualifications needing support to gain basic skills, and those who are unemployed and on benefits such as Jobseeker s Allowance. Those aged studying their first level 3 qualification are also entitled to free training. For those in the in the workplace funding is currently limited to English and Maths and first qualifications for learners 19 to 23, with other low level qualifications limited to co-funding for those employed by an SME only. People aged over 24 with a full level 2 qualification are required to fund 50% of recognised qualifications. But not all qualifications likely to lead to wage gain are recognised by SFA, (eg bus driver licence, fork lift truck driving, vendor IT qualifications), and people have to meet the full costs of these. It is difficult to find out what colleges charge for skills training as each sets their own price. Based on our research, we have assumed an average cost of for the co-funded share of a qualification. Research suggests a bus driver qualification costs around via a private provider. Customer insight and the co-design process highlighted that the affordability of skills is a very significant barrier for people who are on low incomes, often with families, who may be stretched financially, or in debt. This is consistent with the recent Social Market Foundation report 29 which cited a UKCES survey where 54% of low paid employees reported costs as the main barrier to undertaking work related training Making Progress: Low pay trap and lack of skills holding back UK s global competitiveness, Social Market Foundation, April

39 There is a need or an easy to understand guide to relevant courses and funding eligibility focused on our target group. The affordability of skills training, even where there is co-funding, has been highlighted as a major barrier to the Skills Escalator client group progressing. Some qualifications linked to wage gain are not recognised by the SFA making them even less affordable. Advanced Learning Loans For many years Career and Professional Development Loans have been available to learners. Advanced Learning Loans were introduced from September to enable individuals to pay for training aimed at level 3 and above. SFA and Colleges report that the initial data suggests that take up of Advanced Learning loans has been positive though no statistics were published at the time of writing. The threshold for repayments is linked to Student Loans, and commence when average earnings reach 21,000 p.a. BIS began a consultation on loans for level 2 qualifications in the summer of It will be important to test as part of the Skills Escalator model the extent to which loans and therefore studying for better qualifications are off-putting to our target client group. It will be important to test whether the floor for repayment of advanced learning loans of earnings of 21,000 is a barrier to take up and should be weighted for London. Working with employers The BIS Skills Strategy continues to encourage support for employers principally through increasing Apprenticeships. As part of their Skills Strategy, government is shifting funding for employer-led provision to employers, (eg UKCES Employer Ownership Pilots). It will be important to engage employers in the Skills Escalator project on the basis of a business case for cutting recruitment costs, increasing retention, and improving productivity. It will be important to consider in more detail the work of SSCs in the West London area and how they can contribute to the Skills Escalator project. In total there were just over 9,000 people who started an Apprenticeship in the six boroughs during 2011/12 and a total of 47,230 across London. Of the starts in the WPCB boroughs, 5660 of them were at level 2, (62.8 per cent), and 3350 at level 3 or above (37.1 per cent). This compared to 63.7 per cent and per cent at levels 2 and 3+ for London. The Apprenticeship level starts are not broken down by age. However, the above suggests that while the WPCB boroughs are broadly in line with London as a whole, they are slightly behind on level 3 + Apprenticeships. Given that 50 per cent of jobs in West London require skills at level 4 and above, there is scope to increase higher level Apprenticeships. One example of current provision relevant to the Skills Escalator client group was drawn to the attention of the project by the SFA because it provides support in the workplace to employers. Details are given below: 38

40 Case Study: The pan-london Skills Support for the Workforce programme 30 offers upskilling opportunities for employees of SMEs. This programme purchases solutions that respond to local skills needs to support employed individuals, especially young adults (aged 19 and over) to enhance their skills in order to become more successful in the labour market advance their career prospects and reduce the risk of long term unemployment and welfare dependency. The support is available via a consortium of the Association of Colleges in London led by Newham College. It is funded through ESF. It will be important for the Skills Escalator to work closely with the Colleges on the ESF funded Skills Support for the Workforce programme, which is relevant to the target group. In some cases skills shortages have led to employer-driven approaches to redesigning the workload and changing the skills mix of jobs. In practice this creates a possible skills escalator for staff. Again some of the examples we have found have been in the NHS sector. This suggests that employer based approaches could be worth exploring. A local example of an employer driven skills mix model is in health visiting, again in the NHS 31. Case Study: Employer-led Skills Mix redesign: Health Visitor skill shortages in the NHS led to redesigning the delivery model to rely on a wider mix of staff and specialisms. The Hounslow health visiting service was reconfigured in 2006/7 and combined with the school visiting service to form an integrated age 0-16 Child and Family Service divided into eight teams overseen by four team managers leading to mixed disciplinary teams of: - Health Visitors Band 6 and 7; - Nursery Nurses; - Staff Nurses; - Support workers. Previously the service had depended upon entirely on qualified Health Visitors. Employer-led skills mix models can enable the development of new routes to progression. ESOL (English for speakers of other languages) While acquisition of higher skills may lead to wage gain, lack of functional English can be a significant barrier for West London residents seeking work or progressing in work. During our discussions, local authority and skills practitioners alike pointed to this being a barrier to progress. There is evidence of a very good range of options of ESOL provision in both West London and London as a whole at various entry levels. The funding eligibility changes mean that ESOL is no longer available freely in the workplace for employees, except where employers pay for this, (however it should be noted that less than 1% of the former Train to Gain budget was utilised for ESOL in the workplace). People who are in employment, or not on active benefits such as JSA, usually have to pay for ESOL provision. This may be a barrier for low paid people who will not have access to an advanced learning loan for this. As most of SFA funded provision must lead to qualifications, colleges identified a gap in being able to provide enough pre-entry level ESOL provision. This issue was reported in 2012, in a report on ESOL commissioned by the GLA 32. Colleges identified that many 30 Skills Support for the Workforce London ESF Tender Ref: Scrutiny Review of Health Visitor Numbers, London Borough of Hounslow, Report of the Children and Young People Scrutiny Panel, May Analysis of English language employment support provision in London for JSA and ESA WRAG customers, CESI, March 2012, 39

41 customers would need some form of conversational provision prior to entry level ESOL provision. The other gap we have explored is the extent to which ESOL provision is available freely online or in audio form. A major open access provider of learning is Learn Direct. There are a number of free online qualifications available on Learn Direct for both English and Maths as well as some paid for qualifications at relatively low cost. An example of the Learn Direct website is below. It is important to note that students cannot begin their free qualifications without visiting a Learn Direct centre: Free English qualification Enhance your reading and writing skills with a free qualification from City & Guilds. Get started now. Are employers asking for qualifications you don't have? Our range of nationally recognised English qualifications from City & Guilds can improve your CV and show you can apply your English skills in a practical way. Source There is evidence in the Hounslow Lifelong Learning Service of material being created online for ESOL learning. The Lifelong Services are marketed to their residents. It is not evident however, how someone in employment on a low income would be channelled to appropriate online provision where it exists. From our customer insight work, it appears that ESOL will be a major need of the potential client group. There may be some barriers to identifying adequate ESOL provision, especially at pre-entry level, and access /referral to appropriate online provision via providers such as Learn Direct. These issues need to be explored further as part of further design and implementation. DWP While employed people can use the Jobcentre Plus service, it is increasingly perceived as a service for unemployed people. From our assessment of the DWP offer it appears that there are three potential pinchpoints in relation to the Skills Escalator client group requiring consideration: a) The Work Programme provides in work support for their client group and there may be some overlap here with the Skills Mismatch client group. Initial discussions with DWP suggest that Work Programme providers should welcome any additional support for the clients as it is likely to help employment retention. However, as London Councils on behalf of local authorities has indicated a desire to devolve responsibility for the Work Programme to local level, it is possible that there may be a reluctance to prop up a system. This could give rise to an ask to seek devolved responsibility and funding for this group given the direct links to in work benefits and welfare reform. b) Churn: As identified above there are a number of people who cycle between employment and unemployment. Jobcentre Plus staff have noted that that they are rolling out a different way of working with customers and are implementing a new claimant commitment and Coach/Athlete model where the focus is more on setting joint objectives through a personalised approach and less upon a mandatory one 40

42 size fits all approach. The claimant commitment is being implemented initially with people who are unemployed. At a later stage it is expected to be rolled out to employed people receiving Universal Credits. Initial discussions with DWP have suggested that they would welcome the local authority working with this group and that some data could be shared on the basis of informed consent. c) Universal Credits: As heralded in the Autumn Statement 2013, the deadline for introducing Universal Credits continues to recede. A much smaller number than originally planned will be transferred to Universal Credits by 2017 and the initial focus will be on single people whose case should be least complex. While the forward timetable for West London is not clear, no Jobcentre in the area will be involved in a Universal Credits pilot prior to March Working with the client group proposed in the Skills Escalator model ahead of full Universal Credit implementation could offer DWP valuable input on working with employed people in receipt of benefits. Initial discussions with DWP indicated that they do not see any problems arising from local authorities choosing to work with employed people on housing benefits. There are no barriers identified by DWP that should prevent local authorities working with the client group selected. There are three pinchpoints for possible overlap around Work Programme graduates, people who churn between employment and unemployment and the introduction of Universal Credits, but no red flags in relation to any of these, (subject however to any the local authority asks re devolution). These issues are considered further in the design of the model. Help with childcare All three and four year-olds in England are entitled to 15 hours of free early education each week for 38 weeks of the year. Some two year-olds are also eligible. There is some support towards childcare costs: - Single parents must work 16 hours or more a week to get childcare tax credits; - Couples must both work 16 hours or more a week to qualify, except in certain circumstances. These arrangements enable people to claim up to 70% of the childcare costs, (for registered child minders), up to a maximum of 175 a week for 1 child and 300 a week for two or more children. These arrangements will change in the autumn of 2015 with a move to vouchers part paid by Government. Full details are to be announced. For adults enrolled in further education there may be childcare support from colleges via the Discretionary Learning Fund. Each College sets its own policy on use of this funding 33. ESF It is worth noting that there are four priorities for skills and employment in the London LEP s European Structural Investment Fund Strategy 2014 to 2020, which is aligned to the priorities in the LEP s April 2013 Jobs and Growth Plan. One of these is progression onto intermediate and higher level/advanced skills training and qualifications at levels 2 to 4. This 33 Gov.uk and HMRC websites, Guardian Newspaper August

43 includes apprenticeships to meet labour market needs of new and existing industries aimed at low skilled, low pay and disadvantaged groups 34. There is a potential opportunity for West London Alliance or a lead borough to coordinate an ESF bid on behalf of the client group to implement all/parts of the Skills Escalator model. The GLA and London LEP have taken a close interest and been involved in the co-design sessions as part of the development of the Skills Escalator model. The Skills Escalator is cited in the LEP s Growth Deal Plan 35, as one of the Whole Place Community Budget projects complementing the LEP s work. However at present the Growth Deal proposals do not include support for people on low incomes in receipt of benefits. As a result, WLA and the pilot boroughs will be seeking to influence the possibility of a Local Growth Funding. The next section considers the design requirements and proposals for the Skills Escalator programme. 34 ESIF Strategy for London , LEP, January A Growth Deal for London: Proposals to HM Government, London LEP, April 2014, page

44 3 Skills Escalator: Proposed new delivery models This section considers: - The design principles and outcomes for the project; - The Skills Escalator design; - Scale of the programme. Design Principles As a result of the evidence base, customer insight, and the results of the co-design process, a number of design considerations have been produced, (identified in the green text boxes prior to this chapter and Annex E). The design principles are: Programme design - Much of the material needed for the Skills Escalator should be provided online with access for the target client group to an Adviser; - The client group should also be segmented for targeting by housing benefit teams to identify those who could benefit from support. This process should pick up those who may not have access to or use the internet; - Access to the Skills Escalator needs to be on a voluntary basis but once a client engages with an Adviser there should be a commitment made to participate; - The Adviser service will deal with both self referrals and those referred by revenue and benefit teams; - Advisers will be action plan focused and help to ensure wrap around support for an individual to progress. Progress should be reviewed regularly; - Effective use should be made of the advisory expertise in the National Careers Service; - The cost barrier to improving people s skills levels who are on low incomes needs to be overcome; - The action plan should focus on the soft and hard skills, and qualifications needed to enable real wage gain in the labour market; - Employer participation should enhance the outcomes that can be achieved from this programme, including sectoral initiatives, brokerage with employers, work shadowing and other opportunities. Outcomes The Skills Escalator should focus on achieving: - Wage gain over and above the level where savings are achieved by the state aimed at exiting from housing and in work benefits; - Skills or qualifications gained; - Increases in Adult Apprenticeships; - Replacement entry level jobs created. These design principles and outcomes are foundation for the model described below. The Skills Escalator model Overall model 43

45 The diagrammatic model of this service is represented below: Skills Escalator model Sign posting Entry point Civic Centre CAB Library Employer Children's Centre Credit Union On line service Money may be first issue Money, debt housing etc NCS Childcare Skills Click for further support Adviser service Longer term support Triage service Advise /assess Action plan Advocacy Follow up Skills Escalator Guidance Skills Job brokerage Secure employment Use CarePlace platform Case worker 1:200 The model flows from the design principles above and has been informed by customer insight sessions and discussions with staff in the revenue and benefits team in Hounslow. Key aspects of the model proposed for the target client group are: - Two entry points one for those taking up initial support online; and a second entry point where people are screened by the local authority s revenue and benefit team against pre-determined criteria and invited to the programme; - Online support targeted at employed people, who can then push their way through the system to more intensive help if they want or need it, via an Adviser; - A triage model where people are identified for support by an Adviser, by screening against pre-determined criteria, including those in employment in Local Authority Temporary Accommodation; - Wrap around and personalised support across a range of issues pertinent to the client group and referrals to and from other mainstream services; - The Adviser will be common to both referral routes; - A critical role for employers to enhance outcomes. Each of these aspects is explored in more detail below. The Skills Escalator Online service Customer insight and the co-design process have indicated that many people in employment have access to and may prefer to access help via an online service as they are time poor. We envisage two routes to the service, entry online and identifying clients through dicing and slicing data in borough revenue and benefit teams. This annex deals with the online service model to be established. Given pressures on local authority expenditure, our plans are designed to create a workable online service based on West London Alliance s (WLA) CarePlace site Using CarePlace will benefit from the 44

46 functionality that exists within that site and the development costs that have already been invested by the West London boroughs. The Steering Group of CarePlace is being approached to get in principle support for extending their web platform to the Skills Escalator programme and it is envisaged that this development should be supported. CarePlace has existing functionality relevant to the Skills Escalator programme including: - Facility for own domain name and branding for the Skills Escalator - Information pages; - A portal for employed people with links to relevant sites elsewhere including links to social media; - Facility for service providers/others to register their services on the site as a mini website, (which in turn improves their marketing and google rankings); - Enquiries and Registration fields; - Redirection of registrations to the boroughs to trigger responses; - Tracking and reporting, including review system; - Facility for third party usage should a decision be made to outsource the Adviser service. The site might look like this: Skills Escalator website Our model is based on creating content that can be hosted by CarePlace but will allow a separate identity for the Skills Escalator with its own domain name, as can be seen from the mock up above. Using CarePlace will take advantage of investment and development that has already taken place, rather than the new costs associated with the establishment of a standalone portal. The rationale for this is that: - The costs of creating content on the CarePlace web platform are significantly lower than establishing a standalone website and will maximise the collaborative benefits of the functionality that already exists. A standalone dynamic website might cost 45

47 several hundred thousand pounds given the level of functionality required, which is reflected in the original capital investment of CarePlace which was 330k. (The cost of re-using the technology is much lower); - The CarePlace platform was designed to be flexible and the site was developed with the objective of creating capacity that could be used by other West London services; - There is significant scope to share hosting, maintenance and support costs; - CarePlace offers a long term solution; - The costs of updating material on the site and expanding the functionality further is also be minimised by using this route; - Basic web pages can include links to other relevant sites such as local Colleges, NCS, and Jobcentre Plus etc. CarePlace offers good functionality at low cost; - Boroughs will be able to include a reference to the Skills Escalator site on their own employment web pages, eg on Work Hounslow, - As with CarePlace, the Skills Escalator website could be licensed to other boroughs outside the WLA, which would enable a scaled service and costs to be shared. The website will be created in a way where third parties will be given access to the site and be able to provide and update information on their services relevant to the client group. This will be accepted on to the site via a site acceptance mechanism operated by the central support. An example of a mock up for Uxbridge College is given below: 46

48 Other options considered for the website were: - Getting each borough to host common Skills Escalator content on their own website and localising material as needed. This was rejected because some boroughs might not be able to incorporate the content required and this could slow down the development of the programme and would not result in an optimum online service; - Getting the NCS national website to host the Skills Escalator s online requirements. Initial discussions with the SFA indicated that this would not be possible. The estimated costs of setting up the website and the site specification are given in Annex F. Costs It is envisaged that a feasibility study will be needed to ensure that the CarePlace functionality can meet the Skills Escalator requirements and achieve full acceptance from the CarePlace Steering Group. Universal service vs. the target client group Online services, especially where hosted by a website like CarePlace, are by definition universal services. The content of the Skills Escalator model may be relevant and useful to a wide variety of people/residents. However, the Skills Escalator is not intended to be a universal service and access to an Adviser will require some online filtering to access Advisers by the target client group only. Our plans are to establish a cost effective way of doing this on a local basis are to: - Invite registration to reach an Adviser via completion of certain data fields and the accompanying text will clarify which people are eligible for such support; 47

49 - Identify a postcode based way of channeling registrants to a particular borough and Adviser, or to a designated address; - Develop protocols for response times within each borough. This functionality exists on CarePlace now and as a result no additional costs have been included for this. Each borough will need to provide details of where s should be referred. Over and above the costs of the Advisers, not additional costs have been included for this borough based activity. Site Content The online service is indicated by the diagram below. As described above traffic will be driven to the site by a variety of means. As far as possible the aim will be for people to find their way through the site and meet their needs without seeing an Adviser. But for those who are eligible, (in work on housing benefits), there will be an online registration process for referral to an Adviser. From the customer insight research it is apparent that the target client group will have a wide variety of issues and interests. Content is therefore planned on: - Online guides such as Hounslow s Guide to services for residents, (including benefit entitlement, debt advice, location of food banks etc); - Entitled to calculators; - Links to the NCS and their advisers and tools; - Information about increasing skills and qualifications locally, with case studies; - Information about local Colleges and providers; - Advice on approaching your employer for help and support; - Data on jobs that may be increasing/decreasing locally; - Average pay rates for different kinds of jobs and job levels; - Opportunity to push through to help from an Adviser, (with eligibility screening and a registration facility). Tracking and performance The CarePlace website already has a full tracking facility. Reports could be generated by the boroughs. The key to tracking will be identifying those who contact the Adviser and their progress thereafter. This will be done as part of the Adviser model and will not rely on online tracking. Data will be collected on the performance of the online site by examining hits, time sent on the site, number of pages accessed etc. The usefulness of the online site will be tested as part of the evaluation process and through soft data captured by Advisers. As a result no costs have been included for tracking. Given concerns about digital exclusion, it is planned that the triaging of clients to the service by housing benefit teams will help to provide an equal service for those who do not have access to the internet or are unable to use it. Marketing the service There will be multiple entry points to the online service including making hard copy information available in banks, Citizen s Advice Bureaus, Libraries, Community and Children s Centres, National Careers Service, Jobcentres, as well as the Civic Centre s housing and revenue benefits teams. The last is an obvious entry point for those in employment, in private sector rented accommodation and on housing benefit as they have a relationship with their borough and a duty to declare changes in circumstances. The service will also be signposted through residents magazines where this can be done at no cost. 48

50 It is recognised that the burden on front line customer service teams in individual boroughs must be kept to a minimum. It is planned that there will be hard copy marketing material made available in Civic Centres and the outlets above. Traffic will also be driven to the online service locally via each borough s communications team using social media such as facebook, twitter and through hard copy residents magazines, where these exist. It is planned that hard copy flyers will be designed. No costs have been included for: - Localisaltion of flyer content; - Costs of local distribution of flyers to outlets above; - Negotiation of material being made available in local outlets, (eg CAB); - Driving clients to the site locally by facebook/twitter /other media. The Skills Escalator Adviser model The design work to date has concluded that Adviser support should be available to both those who enter the service on line and push for extra help; and those who are pulled to the service by a process of triaging or prioritising clients against pre-determined criteria on a cost/benefit basis. This is represented diagrammatically below. Adviser support Screen employed LHA/TA cases: cost benefit based Adviser Voluntary with joint commitment Entered via online service or by screening data Secure Job Adviser role The Adviser will become the lynch pin for making the Skills Escalator work. An essential feature of the service will be a personalised approach. The adviser, or Adviser model, and the use of personal action plans have become increasingly prevalent in the public sector in recent years as an interface to coordinate wrap around support for all the issues and barriers that an individual might face over a period of time. The Skills Escalator Adviser will build upon successful models such as Troubled Families and Work Programme advisers. Some Advisers will focus specifically on employer engagement. The ability to support a customer in producing and agreeing the implications of an action plan will be critical success factors. 49

51 At this stage it is proposed that there will be a requirement for Advisers to have level 4 guidance skills. As a benchmark, requirements will be checked against NCS advisers to determine essential contract requirements in drawing up the Skills Escalator contract. Annex G provides an indication of the likely attributes needed and likely costs. Advisers will need to be trained in and familiarised with local statutory, mainstream and voluntary services in order to make and receive effective referrals to the Skills Escalator. Advisers will need to gain a knowledge of welfare reform, housing and in-work benefits, The Skills Escalator website will be established in part as a resource for Advisers. The involvement of a user panel will create an effective feedback loop for applying learning from the project. Links to National Careers Service The Skills Escalator will be focused upon achieving realistic outcomes for individuals based on their own aspirations and what is achievable in the labour market. A key part of the customer journey will be referral to the NCS for advice, captured in a personal action plan and consideration of vacancies in the local labour market. While NCS will play a critical role and offer up to three advisory sessions to each person, the Skills Escalator Adviser will work with the Skills Escalator client to achieve their goals and review their progress over time. Hounslow is working with the NCS London contractor on a short pilot involving a group workshop with employed people during Q1 of 2014/15 to prototype elements of the service. This will result in an individual action plan and enable the Skills Escalator concept to be tested in a modest way and lessons learned from this. Two group sessions were held in June/July 2014 for the Skills Escalator client group by NCS advisers: one at a weekend, the other on an evening in local community facilities. Both were oversubscribed and initial follow up indicates that participants have asked to meet a NCS adviser again. This indicates real demand for our concept. We are very grateful to the London NCS contractor for their support. Further evaluation is planned. Linking skills to wage gain Discussions with providers indicate that there are a number of qualifications that have positive links with wage gain, such as IT, the AT and T qualifications, (finance), fork lift truck driving, and the PCV bus driver licence. Some of these qualifications are not recognised by the SFA and will not be eligible for co-funding support. However in some cases they are include by the DWP s local flexible support for those who are unemployed. From our customer insight sessions, below we have provided a number of real examples of the kinds of issues that individuals face and Advisers will need to help devise an action plan to achieve progress and wage gain: Case Study: Ivan: Ivan is in his late 30s with a wife and 4 children aged His wife is not working. He was self employed until early January when the company for whom he worked went bankrupt. He lives in private sector rented accommodation. He has been doing well paid ground work. In the past he has been both a bus driver and licensed door supervisor. Ivan is confident he can get a job quickly, but because of health problems, he would prefer to change direction. He has recently claimed JSA and asked JCP to send him on a course to improve his English. He would like to do an IT course as he has an ambition to get an office job using IT within construction, transport or security sectors he understands. His priority is to support his family long term. New customer journey: Ivan is prioritised by the revenue and benefits team because of the breaks in his employment and invited to meet the personal adviser. It is clear from this meeting that Ivan has determination to succeed and some health problems which might make his usual kind of work increasingly difficult to do. A meeting with NCS is arranged who 50

52 create a personal action plan, which Ivan agrees can be shared with his adviser. This helps indicate how Ivan might achieve his longer term goals of an office job and fit in some training. Some courses are sourced online and Ivan is able to access some online ESOL support. The action plan includes a short term goal of returning to work as a bus driver as office jobs are advertised first amongst the staff pool. The action plans suggests that Ivan's wife should contact NCS in 12 months so that an action plan can be developed for her to work once her youngest child reaches five. Ivan gains a job as a bus driver working 40 hours/week and begins his IT training. The Adviser contacts him every quarter to discuss progress. After 12 months Ivan sees an IT job at the bus garage and contacts the Adviser to arrange support for the interview. Ivan is unsuccessful on this occasion and the Adviser reviews what Ivan can learn from this. It is clear he needs to spend some time in an office environment and Ivan arranges to do this with his current employer. A further six months later an IT job comes up in the head office and Ivan is successful. Ivan s wife is now in a position to discuss her own future and meets the Adviser to create a job plan. NB: The case studies here and in Annexes B and F are taken from customer insight sessions from observing interviews with the Hounslow revenue and benefits front line team. In the co-design process it was agreed that many people might be able to transfer their existing skillset to a different sector or a work setting with higher earnings in a relatively short period of time. For some people, acquiring soft skills will be as important as qualifications. Case Study: Sunita Sunita is in her 30s with four children. She and her husband returned from Wales fairly recently due to the husband s business collapsing and his poor health. She has been doing care work back in London on zero hours contracts but found the hours impossible and too unpredictable for her family. She wants to earn at least 10.00/hour. She worked as dental nurse after school and was not qualified. Subsequently, she has gained childcare and beauty therapy qualifications. She has recently made a JSA claim as following training with an in country escorting service attached to the airport. She has health and safety, fire and security clearance for the airport. The training did not go well she thinks that she did not fit as she was the only non ex-services trainee. Her training was terminated by the company at week 4. She still wants to do in-country escorting work at the airport. She is willing to do night shifts. It is not clear whether she was trained via Heathrow Academy. She is now applying for similar jobs but struggling and her confidence is low. New customer journey: Sunita is picked up by the Adviser as a care worker. Sunita explains her ambitions and she is referred to the Heathrow Academy. She is able to work shadow the escorting role prior to being referred to an employer. Heathrow Academy help Sunita through the training and she is offered a job by the employer for 11.50/hour for 30 hours /week. The Adviser arranges to meet Sunita s husband to assess how he might return to work. How the Adviser will work Guiding a client through the Skills Escalators will include guidance, an action plan, skills and qualifications, and job brokerage, either with the same or a new employer. Ideally the model will also include mentoring and shadowing opportunities in the target work setting. The aim would be to help individuals to secure wage gain, stable employment and exit or reduce dependence on benefits. This model is represented diagrammatically below: 51

53 Secure employment: Skills Escalator More pay Qualification As indicated above, not everyone will need help through every stage of the Skills Escalator. Some may not need guidance, others may not need to acquire new skills. A key issue may include getting support from the existing employer, for example to support progress via an Adult Apprenticeship or other training. The Adviser may be involved in job brokerage where progress cannot be achieved with the current employer because of lack of opportunity in a SME, or because of flat structures, such as in retail. There may be opportunities to access existing job brokerage models at local level or to make bids to establish these. This will be considered further as part of implementation planning. Wherever possible individuals who have made progress by working with an Adviser will be encouraged to become mentors to others at earlier stages of their journey. Such mentors will need access to some personal development to do this. There are existing models, such as health and well being community advocates, which can provide benchmarks for such a role. Overcoming barriers As indicated in the case for change, individuals may face a number of barriers to wage gain, including childcare. The Adviser will be responsible for assessing these barriers and working with the client to overcome these as part of the action plan. Our case studies suggest that childcare will be important both to support more hours of work, (where this also results in increased household income), and/or better a waged job. The case for the Skills Escalator is based on both increased hours and/or wages being designated as a good outcome. This may include working with the partner of the main applicant for benefits to increase a household s earnings. Referrals The Skills Escalator will need to make referrals to and receive referrals from other statutory and mainstream services. These may include other local authority services, (such as health and wellbeing, housing, troubled families, family nurse partnership and other WPCB programmes); and other mainstream services such as NCS, skills providers, CAB, the voluntary sector etc. As the Skills Escalator is targeted at a very specific client group, it is 52

54 not the intention that there will be an automatic customer journey from the other youth and workless WPCB projects, except where people become eligible for this due to their housing and employment status. Conditionality, length of stay and Adviser ratio Our proposals on conditionality are that entry to the service should be voluntary. However, when someone gains access to an Adviser, there should then be a simple commitment made on both sides to participate and follow through. This will be based on models such as those used by the Westminster Families service. It is proposed that clients in the private rented sector should have active access to the Adviser service for up to 24 months and an average length of stay of 18 months has been assumed. This reflects that results are likely to take time to achieve and will be linked to progress against a personal action plan. This limit is similar to DWP s Work Programme. For employed people housed in temporary accommodation we have assumed that a longer average length of stay of two years will be needed. This reflects the need for initial wage gain to be focused on achieving a move out of TA. The average actual length of stay will need to be reviewed as part of implementation. Tracking of individuals may be needed for up to five years. Extensions could be agreed on an individual basis where justified. For the private rented sector cases a ratio of one Adviser to 200 clients is proposed as a result of benchmarking with staff with experience of working with housing clients and an average length of stay of 18 months. However this ratio may be perceived as high compared to some other sectors, (for example Jobcentre Plus use a 1:100 ratio). It is possible that group work may be included as part of the Adviser service where people with similar issues are brought together, either in online fora or by meeting together. This should enable a larger number of people to be dealt with but will be limited by the hours people work and their availability. It is proposed that the 1:200 ratio should be trialed and reviewed after six and 12 months to agree whether changes are needed. A lower ratio is proposed for employed people in Temporary Accommodation of one Adviser to 150 clients and a longer average length of stay to reflect the fact that the initial stages of the journey will include the need to help people improve their earnings to make a transfer to the private rented sector possible, which is an additional step As has been pointed out elsewhere for some people progress will represent a long term commitment. The co-design process emphasised the amount of support and encouragement people need when they embark on a longer term trajectory to progress. One of the workshop participants gave an example: At present we are trying to support a classroom assistant who has reduced his days from five to two in order to pursue a sports technology course. We recognise it s really hard for him. He is earning a lot less money, juggling the requirements of work and study and has taken out a loan to do the course. He needs a lot of help and encouragement. Employer Advisers: Outsourced Contract Two models have been considered for delivering the Adviser service: - In house delivery by each Local Authority with employed staff; - An outsourced contract commissioned on behalf of six Local Authorities. 53

55 The assessment of these is considered below: Assessment of delivery models Advantages In house delivery Keeps control directly and real local service Lessons learned can be applied directly, eg to welfare reform Becomes part of core skillsets Disadvantages Capacity stretched in many LAs now LAs have moved/are moving from direct delivery to commissioning role Service may not be standardised Outsourced contract Transfers risk to provider Can negotiate outcomes based contract Fits with LA commissioning role /standard service Adviser skillset not typical LA role Less direct accountability/still needs commitment at borough level May be more difficult to integrate with other services and apply lessons learned On balance the outsourced model is recommended for full implementation. This could be commissioned by a lead borough or by West London Alliance. The successful contractor would be expected to deploy the adviser resource locally. To support this, boroughs will need to consider opportunities for co-location of Advisers with existing services and in community outlets much as NCS works now. A contract value has been assessed basing the costs on estimates for in-house delivery. Areas for targets are considered in Section 5 which would enable the drafting of an outcomes based contract, see Annex G. As part of implementation, the specification and outcomes will need to be agreed for the contract. Segmentation of the client base In addition to self referral via the online service, there are a number of ways in which housing benefits data can be screened in order to prioritise people to the Adviser service. Examination of the data held by the Hounslow revenue and benefits team was that for housing benefit claimants, details are held of the employer and wages, age, family status, number of dependent children, but information on skills or the level of qualifications will not be available. Our assessment suggests that a number of existing data fields and criteria can be used to prioritise clients, as shown in the table below: Criterion for screening Employment status: Employed (number of hours and income) Self employed Family status: Single Non working partner, children over 5 years Couple with 2+ children Comments Could prioritise part time workers with scope to increase wages Could prioritise those aged under 35 Could prioritise to increase overall household income Claim status: Could prioritise as benefit savings will be higher 54

56 Repeat claims New claim Overpayment Employed and in Temporary Accommodation Employer status: Works in a sector with scope for advancement Works in a sector with little scope for advancement Could prioritise (may indicate churn with JSA) Could prioritise before dependence established Could prioritise, (may indicate variable wages) Could prioritise to help provide ladder to better accommodation Could prioritise via employer-led initiatives Could prioritise as benefit recipient may be stuck in low wages Targeting by choosing one or more cohorts for the segmentation above will enable learning about where the greater propensity is for benefits to be achieved for the individual and savings for the Local Authority and over what time period. While data can enable segmentation, the key to success in the first phase of the programme will be working with individuals who are motivated to progress but do not know how to do so. Our customer insight cases studies indicated that some people in the categories above will want to progress and will need help to do so. Individual boroughs may want to select customers against particular criteria/multiple criteria. Feedback from housing benefit teams has suggested that employed people in Local Authority Temporary Accommodation would particularly benefit from help and might need relatively small amounts of support to move out of TA. It will be important to evaluate the willingness of benefit recipients to take part in the programme from particular groups so that lessons can be learned. Referrals can be made to the housing and benefit teams where fraud is suspected. We have been conscious that local authority front line customer service teams are already stretched and that as far as possible the Skills Escalator service should not depend on these staff to drive referrals to the Adviser. However they could make point out hard copy flyers and these should be made available in reception areas. The Skills Escalator is designed to help reduce the flow of people who churn back into unemployment, via settled and stable employment. Data Sharing Triaging and prioritising staff to the service will depend upon criteria being agreed with back office staff who should be able to dice and slice data by the criteria selected above and send letters out inviting recipients to meet the Adviser. In addition to being a rich source of referrals, housing benefit teams will have checked issues such as the right to work and remain in the UK in order to pay housing benefits. There may be data sharing issues to be explored if Advisers are outsourced. However it should be possible to use informed consent to share data between the outsourced contract holder and Local Authority. Where this is not agreed, gathering data will be important at the start of the advisory process. Employer Role in the Skills Escalator The role envisaged for employers results from feedback in the Case for Change chapter. The success of the Skills Escalator project is likely to be enhanced by the involvement of employers. There is a good business case to be made as they face difficulties in recruiting, (skills shortages), and in achieving maximum productivity as a result of current gaps in skills, 55

57 (skills gaps), in their workforce. An initial aim of the Skills Mismatch workstream was to help employers recruit and retain and there are significant costs attached to recruiting. Our assessment is that there are a range of jobs available between 16,000-26,000 which would enable the client group to progress. We are proposing that some Advisers will be designated specifically as Employer Engagement Advisers to gain the support of employers for sectoral/employer specific initiatives. The need to make effective links with employers and this will be reflected in the contract specification. It is possible that some customers could benefit from Adult Apprenticeships. Recent changes to eligibility for these require someone in employment to have a significant change in role or in the learning required for their role to qualify. As Advanced Learning Loans will not apply to Apprenticeships, employer support will be vital for such opportunities. We are suggesting that a 10% target should be set for Adult Apprenticeships for those customers engaging with the Skills Escalator adviser. This will require active employer engagement. Apprenticeships should also support reductions in skills gaps and skills shortages. There is scope to ask employers to set up shadowing opportunities for the client group who cannot achieve progress within their current organisation. Similarly, teams of employee mentors would be beneficial to the client group and help develop existing employees. The employer role envisaged as a result of this engagement is represented below: Employer role Beat Skills Shortages Skills mix redesign Improved retention Mentors Shadowing Beat Skills Gaps Adult Apprentices Employer A sectoral approach to targeting employers will be beneficial and it will be important to involve sectors skills councils (SSCs). The evidence base earlier provided data about sectors where employees can become stuck in low pay jobs, often because of a low pyramid organisation, where opportunities for advancement are less. It will make sense to target employers in sectors which provide more scope for advancement such as private services, the public sector and community services, arts leisure and personal services and manufacturing and construction. It may not make sense to target employers where there is evidence of employees being stuck on low wages, including retail and hotels and catering. 56