Employment Business Case. March 2014

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2 Contents Executive Summary Introduction The Context Substantial demand for labour Persistent high levels of worklessness Significant multiple barriers Current activity National mainstream programmes failing to meet the needs of the hardest to help Local programmes a more flexible and tailored approach to meeting local needs Issues, weaknesses and gaps in current provision A new collaborative approach Overview A wrap-around employment support service for the most dis-advantaged residents Joint commissioning of provision common outcomes and payment framework Provision of a sub-regional jobs brokerage service Information and analysis Delivering the new approach Management and Governance arrangements Costs and benefits Introduction Costs Benefits: Cost-benefit summary analysis Wider benefits Required changes and commitments Next steps... 34

3 Executive Summary Central London Forward will work with Government to establish a more effective and integrated approach to employment support in the sub region, in order to help: people find and stay in work; reduce poverty and promote social justice; create more productive communities; deliver Public Sector Reform and a localised approach to service delivery; and contribute to the longer term competitiveness of the area and growth of the wider London economy. This high level business case has been prepared by Central London Forward (CLF) and its constituent boroughs to set out proposals for how, given a more localised and collaborative approach to employment support, the sub-region s ability to help unemployed residents into work can be improved. The new approach will initially be delivered over a three year period and provide more effective support for over 10,800 residents who are currently furthest away from the labour market. The numbers of Work Programme Leavers returning to JSA and young people who are NEET (the principal target groups) securing work as a direct result of the approach equates to 20% of current levels across Central London. It is expected that some 2,350 net additional job outcomes (i.e. those that would not otherwise have occurred) will be achieved over this period. It is forecast that Exchequer savings in excess of 28m over the first three years will be secured in return for an investment of just over 9m. In other words, the proposal will yield a net return of 3.08 for every 1 invested. As illustrated in Figure ES1 overleaf, the proposition will also deliver a wide range of other benefits, not just for Government, but also for London as a whole, the Central London area, employers and, not least, currently workless residents. Central London is a major source of job opportunities and wealth. However it also contains pockets of high deprivation and persistent unemployment which result in significant numbers of local residents many of whom face multiple barriers being unable to access the opportunities. As well as representing a huge immediate personal and wider social cost, in the longer term the competitiveness of the area will potentially be undermined. While the performance of national programmes (particularly the Work Programme) has improved, levels of very long-term unemployment have increased and there are still a significant number of people who are furthest from the labour market whose needs are not being met. Local programmes, while currently limited in scale, offer a more flexible, tailored and demonstrably effective approach to meeting local needs. 1

4 Figure ES1: Benefits of the proposition A joined up approach to addressing key government priorities, e.g. jobs & welfare, troubled families, child poverty, health and skills A focus for the delivery of the London Growth Deal A basis for further collaboration to address key challenges to growth, e.g. housing; skills Jobs Increased incomes Removal of key barriers Improved personal and family stability \ Job-ready customised workforce Assistance to meet labour and skills shortages Recruitment and postrecruitment support Improved social cohesion A replicable approach to addressing worklessness A model for effective localised approaches to service delivery & public sector reform The following collaborative activities are seen as central to the establishment of a new, integrated approach to employment support in Central London: a wrap around employment service initially for the most disadvantaged residents; joint commissioning of provision; a sub-regional jobs brokerage service for employers; and joined up information and intelligence. Two linked pilot projects will be used to test the new approach and provide the basis for its subsequent roll-out and development. These will involve targeting: a specific cohort of residents who are furthest away from the labour market initially Work Programme leavers and NEETs; and the construction sector selected in order to build on existing activity and established linkages with the private sector and because it is forecast to grow and to provide accessible work and training opportunities. 2

5 It is proposed that the new approach will be overseen by a partnership of the Central London boroughs working with DWP / JCP. It will be co-ordinated through a small team responsible for the co-commissioning of services, the provision of a common framework for employment services and the monitoring, oversight and review of support activities. The main interface with employers for the capture of jobs and provision of a brokerage service will also be at this level. However, delivery of support to jobseekers will take place at the borough level but within the common sub-regional framework. It will build upon and enhance existing provision, ensure linkages with other local services and target new investment to achieve genuine additionality. Government is requested in particular to: involve CLF and its constituent boroughs as early as possible in the design and commissioning of future employment support programmes - including the re-commissioning of the Work Programme in March 2016; jointly review the approach and its potential to provide a basis for use of direct investment agreements whereby risk and reward are shared to allow sustainable re-investment of savings in successful programmes; and provide Growth Deal funding to support the essential initial investment in the proposal. 3

6 1 Introduction This document has been prepared by Central London Forward (CLF) and its constituent boroughs to set out proposals for how, given more effective levers over the commissioning and delivery of employment support provision in Central London, the sub-region s ability to support unemployed residents into work can be improved. It will form part of the London Local Growth Deal submission currently being developed by London Councils and the GLA under the aegis of the London Enterprise Panel (LEP). The proposals will improve outcomes for residents, communities, businesses and the Exchequer. The business case uses Government-endorsed cost-benefit assumptions and builds on CLF boroughs proven track record of innovation and results in employment support provision. It demonstrates how expanding and improving a multi-agency, wrap-around (i.e. comprehensive and tailored) approach to employment support can help more disadvantaged Londoners towards employment than has been possible through national programmes, with significant benefits for the public purse. The business case and associated work will serve to simplify, rationalise and increase the effectiveness of current provision. lt will: in the short term, provide a blueprint for a proof of concept pilot within Central London potentially commissioned through the LEP-directed European Structural and Investment Fund (ESIF) programme; in the medium term, provide a compelling case to Government to involve local authorities as early as possible to co-design and co-commission future flagship employment support programmes, such as the re-commissioning of the Work Programme in March 2016; and in the longer term, lay the foundations for a direct investment agreement with Government, sharing risk and reward to allow sustainable re-investment of savings in successful programmes. This business case represents a statement of intent on the part of the Central London boroughs. Once agreed in principle, it will be subject to further intensive discussion between the boroughs, with delivery partners and with Government prior to formulation of a detailed proposal. 2 The Context Opportunities Global commercial centre national wealth - key driver of Significant business activity resulting in substantial demand for labour Employment growth forecast to exceed London overall Challenges High levels of worklessness and residents with multiple barriers Growing number of very long term unemployed (6,500 JSA claimants of more than 2 years) 4

7 Occupational growth requiring a mix of high level skills and elementary jobs and those requiring customer care skills Young people who are NEET key issue for Central London (3,000) Troubled families (3,300) Up to 76,000 residents claiming IB or ESA 2.1 Substantial demand for labour Central London 1 is the focus for the nation s governance and one of a handful of truly global commercial centres in the world. In many respects it defines the UK s international status and is a key driver of national wealth. However as well as great wealth, it also contains pockets of high deprivation and unemployment. There is no lack of job opportunities but significant numbers of local residents continue to be unable to access them. The proposals contained in this document aim to address this disconnection and the barriers that exist between the local demand-side (i.e. the available jobs) and elements of the supplyside (i.e. the skills, aspirations and other characteristics of residents). They are designed to add value to, and fill identified gaps in, existing employment and skills programmes. In terms of jobs availability, the key features of the Central London economy include: approximately 141,000 businesses providing over 2.1 million jobs in ; a business base that increased by some 3.5% in ; employment grew by 176,000 4 between 2009 and 2012, accounting for 55% of Greater London s total employment growth of 320,700 over the same period; a jobs density rate of i.e. 1.8 employee jobs are located in the area for each workingage resident. The comparative figure for London is 0.9 and for Great Britain is 0.8; 97% of jobs in 2012 were in the service sector 6. The area s dominant sector is professional, scientific and technical services (19% of jobs), with financial and insurance services (11%), business administration and support services (10%), accommodation and food services (9%) and information and communications (9%) also significant; and forecast growth 7 in employment is expected to continue to be some 319,000 jobs over the coming decade equating to more than one in every eight jobs created in the UK as a whole (see Figure 1). Figure 1: Forecast growth in employment 1 Central London includes Camden, the City of London, Islington, Lambeth, Kensington and Chelsea, Southwark, Wandsworth and Westminster Based on the difference between VAT registrations and de-registrations during 2011 as a percentage of total VAT registered businesses. 4 Business Register and Employment Survey 5 ONS jobs density data 6 ONS Business Register and Employment Survey Oxford Economics, Employment in London, December

8 Indexed employment growth (2013 = 100) Employment Business Case UK Central London Source: Oxford Economics, As shown in Figure 2, the main growth sectors are forecast to be in non-public sector services. Occupation growth will be a mix of jobs requiring high level skills (for example, professionals, scientific and technical skills), elementary jobs (cleaning, housekeeping, storage related) that traditionally required no qualifications (although there is evidence of qualified people entering these type of jobs) plus jobs requiring customer interaction skills. Figure 2: Forecast employment change for Central London Change in Employment ( ) Other services 30 Public services -20 Professional services 119 Admin & real estate 90 Financial services -2 Information & comms 49 Transportation & Storage 8 Trade & hospitality 35 Primary & Secondary 9 Source: Oxford Economics, Employment (000s) 6

9 2.2 Persistent high levels of worklessness Employment Business Case However, juxtaposed against this buoyant picture the area contains some significant needs: although the proportion of residents that are of working age (73.9%) is well above the national average (64.6%), both the economic activity rate (72.9% compared with 76.3%) and the employment rate (65.8% as opposed to 70.1%) are lower; the unemployment rate (9.6%) is above both the London-wide (9.3%) and national (8.1%) rates; the area has a diverse population with a high proportion of ethnic minority residents (37.9% compared with 14.0% in England and Wales); although employment rates have risen over recent years, harder to help groups such as ethnic groups, older people (particularly long term unemployed males) and those with disabilities are under performing in the job market; there is a high number of people on health related benefits and others with health issues. Some 76,000 residents were on IB/ESA 8 in August 2013; there are persistent and growing levels of very long term unemployment. Between January 2010 and January 2014 the number of JSA claimants out of work for more than 2 years in the area grew five-fold from 1,315 to 6,580. Some of these claimants are those who are returning from the Work Programme having been unable to secure employment through this support. These are people who are likely to have a range of issues affecting their employability; the area also has a high number of Troubled Families, as defined by the government programme. These are families affected by worklessness, crime and who have children who are absent from school. 3,341 families in Central London had been identified for inclusion in the programme as at the end of June 2013; there is a gap in the number of mothers working in London compared with the UK average and a higher number of lone parent households in London (12.7%) compared with England overall (10.6%). Furthermore there is a strong link between high maternal unemployment and child poverty in London. In Central London, 5 of the 8 boroughs have over 30% of children living in low income households, for example Islington has 39.1% compared with 26.7% for London and 20.1% for England overall 9 ; young people who are not in education, employment or training (NEET) are also a major issue. At the end of ,040 or 8.1% of known year olds were identified as NEET in Central London compared with 4.7% in Greater London and 5.7% nationally; and harder to help groups tend to concentrate in specific localities. Figure 3 shows the distribution of worklessness by ward across Central London. It highlights particular concentrations in the north of Westminster and Kensington and Chelsea boroughs and 8 9 Incapacity Benefit/Employment and Support Allowance 7

10 illustrates how areas of very high unemployment often abut considerably more prosperous localities. Figure 3: Worklessness rates by Ward Central London August 2013 However, the extent of this concentration is less in Central London than in most other areas. Figure 4 shows that in Central London the worklessness rate in the worst 10% of Lower Super Output Areas - LSOAs (decile) was more than ten times higher than in the 10% best areas in 2013 (18.6% compared with 1.7%). This degree of divergence is similar to that in 8

11 England as a whole (22.5% compared to 2.2%). However the graph also suggests that worklessness is much more evenly distributed within most of Central London than in England as a whole. Indeed across the area (with the exception of the best and worst deciles) rates are above the national average % in the central 80% of the area as opposed to 8.1% in England. This would suggest that a pan-central London approach to worklessness is more appropriate than one focused on specific small areas. Figure 4: Worklessness rates by LSOA decile Central London and England 2013 Source: DWP Claimant Count data; ONS Mid-year population estimates 2.3 Significant multiple barriers The key challenge in designing more effective employment support programmes relates to tackling the causes of this long-term unemployment. In particular, many residents: speak English as a secondary language the proportion of people who report not being able to speak English well or not all is 3.2% in Central London compared to a national average of 1.3% 10 ; suffer with mental ill health at some point in their lives London is estimated as having higher rates of mental illness than the rest of the UK 11 ; have drug and alcohol abuse issues 12 - In 2006/07, London had the highest estimated rate of problematic drug users at 14.2 per 1,000 population; are aged between % of 16-18yr olds in Central London (approx 3,000) are NEET, compared with 4.7% in Greater London and 5.7% nationally; Office for National Statistics (2011). Language in England and Wales (Online): ons.gov.uk/ons/rel/census/2011-censusanalysis/language-in-england-and-wales-2011/rpt---language-in-england-and-wales 2011.html Public Health England. (Various). (Online): apho.org.uk/resource/view.aspx?rid=39296 Ibid London Councils (2013), London Facts (Online) londoncouncils.gov.uk londonfacts/default.htm?category=2 9

12 have a physical disability, equating to approximately 1.4 million people in the capital 14 ; and live in a troubled family. London has 18% of the national total of troubled families 15 and within Central London there are estimated to be approximately 3,300. High childcare costs and a lack of part-time jobs are also significant barriers to getting a job in London. 3 Current activity National Work Programme improving, but not yet reaching anticipated targets Targeted support also currently failing to meet the needs of the hardest to help NEETs, people with disabilities, Troubled Families Sustained job outcomes 15% Local Targeted support and engagement of groups furthest from the labour market Flexible funding - enables programmes to be tailored to needs of individuals Sustained job outcomes 25% 3.1 National mainstream programmes failing to meet the needs of the hardest to help The Government s flagship employment programme is the Work Programme which aims to deliver flexible support to help long-term claimants of Jobseeker s Allowance and some claimants of Employment and Support Allowance to move into sustainable jobs. It has been in place since the summer of 2011 and Work Programme contracts currently operate in London s two Contract Package Areas West London and East London 16. While programme performance has improved since it started, a significant number of the most disadvantaged groups are still not achieving positive outcomes. This is particularly the case for Employment Support Allowance (ESA) claimants, for whom job outcomes in London 17 are 3½ times below the MPL (minimum performance level). The latest data released showed that only 4.3 per cent of individuals on ESA have found sustained work 18. In conjunction with the JSA client group, 15% of Work Programme starters overall have achieved a sustained job outcome in London 19. Other national programmes targeting the most disadvantaged are also demonstrating similar performance. Under Work Choice which supports people with disabilities and long-term health issues, only 860 people across London as a whole have achieved a job outcome since the start of the Programme in 2010 equivalent to 13% of all referrals compared with a national figure of 23% Ibid Department for Work and Pensions (2013), Department for Work and Pensions ESF (Online) Available at: West London providers include Ingeus UK Ltd, Maximus Employment UK Ltd, Reed in Partnership Ltd; East London providers include A4e Ltd, Careers Development Group, and Seetec Data not readily disaggregable for Central London alone. Cumulative figures from June 2011 September 2013 Cumulative figures from June 2011 September

13 Since the start of the programme in January 2012 the DWP Troubled Families Programme has only achieved 150 job outcomes against a target of 2, in London. Of the 3,341 families that had been identified for inclusion in the programme in Central London as at the end of June 2013, only 12 families had a member who had moved off benefits into continuous employment. The Youth Contract targets different age groups, but the wage incentive element is intended to increase employment levels for year olds. The Social Mobility and Child Poverty Commission found that only 2,070 young people had completed a 26 week placement and that the ' 1 billion Youth Contract has yet to have any real impact on long-term youth employment which is at a 20 year high 21. While local area data is not readily available, this scale of national intervention compares with 6, year olds claiming JSA in Central London (January 2014) and 3, year olds who are NEET. 3.2 Local programmes a more flexible and tailored approach to meeting local needs Local authorities and other local partners in the area have responded to this under-performance through the development of a number of, often innovative, programmes that have a particular focus on harder to reach groups. Some key examples are summarised in Table 1. Table 1: Central London Boroughs local provision Borough Existing local provision Details (e.g. scale, expenditure, outcomes) Camden Camden Apprenticeships King s Cross Construction Skills Centre Into Enterprise start-up support for year olds Maternal employment projects a) Universal support to access jobs b) target support to overcome barriers: Hospitality careers in Camden Somers Town Work it Out Camden Apprenticeships 200k pa; KX Construction Skills 334k pa 268 apprenticeships created Into Enterprise 40k pa (16 into EET; 11 self employment) Maternal employment projects 103k Universal targets 50 women into flexible and part time employment or self employment; overcoming barriers target 42 into FE/training. 22 into jobs Hospitality - 60k, 68 to move into jobs Somers Town 60k outputs TBD National Audit Office (2013). Programme to help families facing multiple challenges. Available at: CSN Policy Briefing (2013) State of the Nation 2013 Social mobility and child poverty in Great Britain. Available at: ocial%2bmobility%2band%2bchild%2bpoverty%2bin%2bgreat%2bbritain.pdf 11

14 City of London Kensington and Chelsea Islington Lambeth Southwark City of London Corporation s apprenticeships programme City residents employment programme (City STEP) City Business Traineeships scheme Self-employment programmes Construction training/employment initiatives Engagement of City businesses in local recruitment Apprenticeship programme, managed by Education Business Partnership Personalised employment support Workwards delivered by Nova New Opportunities The Single employer face, Islington BEST Islington Working for Parents Childcare bursaries and discretionary employment support Family intervention project Adult and community learning support Business works mentoring Joint Employment Services board King s Cross Construction Skills Centre K&M decorating academy Lambeth Working Aspirational Families (troubled families) Emerging work around Whole Place Community Budgets Apprenticeship programme Business support/bid development Joint Co-ordination unit (JCU) Southwark Works Construction workplace co-ordinators Council apprenticeship scheme Emerging work around the whole place community budget partnership Youth Fund employability programme Wandsworth Co-ordinated employer engagement via Wandsworth Work Match and Nine Elms Vauxhall arrangements Local employment support Joint Co-ordination unit (JCU) Westminster Council apprenticeship scheme Westminster Works Westminster Work Programme +: WP leavers Workplace Co-ordinators job brokerage Employability, Fit for Work, Flying mentors Approx 350k in 2013/14 Outputs: 150 into jobs; 110 school-leavers into paid work placements; 90 apprentices placed; 1,400 provided with employabilityrelated training Apprenticeships 2013/14 budget 180k; 107 participants 51 into jobs Workwards Jan 2012/June k; 62 participants 33 into jobs Islington BEST - 619k Working for Parents 280k Discretionary support 120k Family intervention 52k Adult support 30k KX Skills Centre 40k Decorating Academy 66k Budget 500k - unit cost per job start m budget for employment and skills provision 900+ sustained jobs since 2010 for harder target groups 600+ sustained jobs since 2010 (S106 obligations) 300k p.a. 2 yr pilot k JCU - annual expenditure 290k p.a. (jointly funded by Wandsworth and Lambeth) (3 year budget - inc programme management) m, plus additional leveraged funding from private partners, grants and ESF 2014/15 proposals - 140k 12

15 Boroughs invest considerable resources into employment support both from their own budgets and through ESF funding. They are involved in the design, commissioning and delivery of a number of employability support programmes. Whilst the majority of borough programmes are designed for a generic cohort of workless residents, this includes a large number of individuals that are economically inactive and that would otherwise be missed by mainstream provision. Programmes delivered by London Boroughs achieved significantly better outcomes in terms of employment being sustained for more than 6 months - 25% of clients compared with a figure of 13% for Work Programme (cumulative from March 2011 June 2013). Performance for particular groups was also better, particularly in relation to JSA 18 24, clients with disabilities and other hard to reach cohorts (including lone parents, troubled families, BAME, women, older job seekers, job seekers with addiction problems, refugees, ex-offenders and gypsy and traveller communities) plus economically inactive residents that would otherwise be missed by mainstream provision. Although the Work Programme had a lower cost per job outcome initially ( 2,097 compared with 3,082), recent analysis by London Councils concluded that when considering overall sustainment rates and the costs of working with harder to help clients, locally run programmes provide a cheaper alternative. The local programmes offered better value for money over the longer term not least because the flexibility afforded by the funding available enabled programmes to be tailored to the needs of clients furthest from the labour market. 3.3 Issues, weaknesses and gaps in current provision Issues A number of major issues inhibit the development and presentation of a clearly defined employment offer that provides coherent and effective routeways to work especially for those who face the greatest barriers. These include: fragmentation of services including a lack of integration between mainstream provision and local services; payment structures that do not incentivise providers to work with clients with complex needs; complexity in the employment support system that inhibits pooling resources and employer engagement, and leads to overpayment for outcomes, high levels of deadweight, double funding and duplication of provision; and an inability to share data on programme performance and client journeys, as a result of regulation and data protection, meaning partners are unable to build trust and effective partnerships at a local level. 13

16 3.3.2 Weaknesses The above issues result in a number of weaknesses in the services experienced by jobseekers: a lack of responsiveness to the different starting points of clients and a failure to recognise that the pathway to employment is not always linear. Support needs to be more personalised and recognise people s distance from the labour market and the complex barriers that they often face. Needs vary according to individual circumstances and aspirations; people too often being referred to provision, and job opportunities, before they are ready and their needs have been effectively assessed. This partly reflects the high caseloads of Jobcentre Plus and Work Programme advisors, targets and payments systems, and the quality and consistency of the support available; support that can be patchy and uncoordinated. Quality often varies depending on who makes the initial assessment of need and the referral to ongoing support. Access to the appropriate support pathway (via a gateway providing initial engagement and assessment), no matter what stage people are at in their journey to work, is critical in determining the success of the outcomes for that individual; a lack of sufficiently tailored support through mainstream provision particularly to those with complex or multiple needs. Where tailored support is available (for example, through the voluntary and community sector) it tends to focus efforts at various points in people s journey s to work rather than providing end-to-end support or being effectively linked with other stages on the routeway ; and a frequent disconnect between the type of support provided and the jobs that are potentially on offer. Better links with employers are needed and new ways found of capturing jobs (particularly for, target groups) and providing employers with recruits of the calibre that they demand Gaps In addition there are specific gaps in the current provision in Central London. These include: fragmented and insufficient outreach particularly through local community and other organisations in order to engage with hard to reach groups and to ensure that employment is presented as a realistic option to their service users and that access to appropriate support services is facilitated; insufficient customised pre-employment preparation for specific job and apprenticeship opportunities (including support to develop the skills needed and to enable the candidates to sustain employment); a lack of in-work support to assist job retention and progression (including business mentoring); and limited awareness of the employability support available. 14

17 The development of a new approach to address the above issues, weaknesses and gaps is necessary if outcomes, particularly for the most disadvantaged residents are to be improved. An integrated service is required that focuses on meeting individual needs and providing clear routeways to jobs. Such a development is timely particularly given the introduction of Universal Credit (UC). This will present a significant challenge but also provides a real opportunity to redesign employment and support services for the most vulnerable claimants in Central London. Linking assessment for benefits with an employment offer developed jointly by local partners (and with wider local authority and health services) will result in an integrated service that improves the claimant journey towards work. UC offers a unique opportunity to reshape the welfare to work offer by integrating local support services with local and regional employment offers based on a common assessment of claimants needs. 4 A new collaborative approach 4.1 Overview In response to the issues and weaknesses identified with current provision, the following key principles will underpin the proposed new approach and its constituent parts designed to improve performance and employment outcomes for residents within Central London Interventions will be: person-centred - intensive, tailored support packages for individuals with a key worker that will stay with the individual to ensure progression into employment; employer-led - interventions that are designed to meet employers needs (and fill skills gaps) and are opportunity (i.e. job) led; targeted focused on specific hard to help groups; integrated into the provision of pathways of support which tackle key barriers to employment and focus on progression; additional to mainstream and other employment support programmes, to complement and add value to existing activity; partnership delivery and oversight exploring opportunities to pool resources for more effective delivery (including the potential of a single pot of mainstream employment funding for long term unemployed people); delivered at the most appropriate spatial scale in the case of job-seekers support, this will generally be at a borough or sub-borough level reflecting a need for effective engagement and tailoring to local needs; in the case of employer engagement, this will generally be at a central London labour market level; and monitored and reviewed including development of a common outcomes and payment framework including measures to assess distance travelled and intermediate outcomes for individuals. 15

18 In order to move towards this new delivery framework, CLF and its partners wish to utilise the Growth Deal to develop the following collaborative activities: a wrap around employment support service for the most disadvantaged residents; joint commissioning of provision; a sub-regional jobs brokerage service for employers; and joined up information and intelligence. These are seen as central to the establishment of a new, better-coordinated and more effective approach to employment support in Central London. Figure 5 below provides a diagrammatic overview and shows how the activities relate to two pilot projects that will be used to test the effectiveness of the new approach and provide the basis for its subsequent roll-out and development. The remainder of this section outlines each element and the two proposed pilots. Figure 5: Key components of the approach 4.2 A wrap-around employment support service for the most disadvantaged residents Across Central London there are a range of providers already engaged in the delivery of employment support programmes. However there are substantial numbers of people with whom the existing system is failing to engage effectively. Moreover, as highlighted in the previous section, a more standardised approach is required to provide a consistent quality of 16

19 relevant support. Consequently CLF and its partners propose to ensure that job seekers have access to the following, regardless of where they enter the system: a key case worker/employment advisor; a single assessment process with the production of a personal action plan; and access to a common menu of provision designed to overcome barriers to employment and regularly reviewed to ensure quality and relevance. JCP have a critical role to play not least because they provide access to the system for benefit claimants. However, referral mechanisms will be extended to a network of community-based provision and other agencies (including, for example, GPs and Children s Centres) to facilitate engagement of hard to reach groups and non-benefit claimants. The service will initially focus on the most disadvantaged groups and those facing multiple barriers to accessing work. This will include Work Programme leavers and NEETs. Figure 6 summarises the key stages in the support pathway. It will be delivered at the borough level in accordance with a framework that sets out common delivery and operating principles and procedures. Figure 6: Stages in the pathway to employment Information, advice and guidance Local targeting, outreach and engagement Information, assessment and diagnosis Employability and preemployment support Transition to work Sustainability and retention Skill building and progression The range of support that will be available through the service will comprise: The engagement of individuals through JCP and, in order to engage with those most detached from the labour market, a network of local community organisations and other service providers. The approaches adopted will recognise that many disengaged people have low expectations and aspirations (e.g. NEETs; those who have been claiming benefits for many years; people with health conditions, ex-offenders; older people) while others want to engage but are unsure where to go and what to ask for (e.g. young people, lone parents). Thereafter, the assessment process and working with someone who understands the potential barriers, will be critical to ensuring that the individual s programme of support is relevant and appropriate to their needs, circumstances and aspirations. This programme will be defined within a personal plan. The employability element captures a broad range of intervention types that vary in terms of intensity of support, duration, capacity and cost. While its primary aim is to give those furthest from the labour market access to the right training and skills that will enable them to compete for jobs (including skills such as team working, time management, personal development and vocational skills), individuals may also require up front support or 17

20 additional support alongside more generic training to overcome issues such as drug or alcohol abuse, mental health problems or lack of basic skills including literacy and numeracy. Transition to work provides the necessary support to assist individuals through the interview stage and into a job. This can include relatively low cost interventions - such as improving interview techniques; grants to purchase work clothes or equipment; or assistance with travel or other associated costs as well as more expensive and intensive longer-term support such as transitional employment and wage subsidy schemes. After entering employment some individuals will require additional support to assist them to retain the job, including for example mentoring, assistance with managing their finances and working with the employer to resolve any issues. How will the service be different/add value? multiple points of access with common assessment and triage processes a framework/menu of services that address barriers and provide relevant effective employability support agreed protocols across all authorities and partner agencies for assisting people into employment 4.3 Joint commissioning of provision common outcomes and payment framework At present there is estimated to be at least 120m of mainstream employment support funding spent per annum in assisting long term unemployed people back into employment across the whole of London. A rough estimate would suggest that the equivalent figure for Central London would be at least 25m. In order to tailor provision more effectively to the needs of residents in a particular area, there is a strong case for devolving a single pot of funding to Functional Economic Areas (FEAs) such as Central London. As the majority of the current contracts (e.g. work programme, youth contract, work choice) are part way through being delivered and not due to conclude until , it is envisaged that the development and local commissioning of a single pot will need to be phased in. As a first step, the Central London Forward boroughs will work together to develop a common outcomes and payment framework (for discussion and agreement with DWP) that can be adopted by the partners to commission provision as new programmes come on stream. In the intervening period, the boroughs within Central London will explore other opportunities to pool funding and commission delivery at a local level based on an agreed outcomes framework. Such provision could include, for example, the delivery of specialist support (to address drug and alcohol issues for instance) as part of the proposed wrap around employment support menu. 18

21 It will be important that the new outcomes framework includes measures that recognise and reward intermediate outcomes - or distance travelled - to capture progression towards employment. How will the service be different/add value? Longer term, a single pot of funding less confusion for job seekers and employers; Greater flexibility to target resources more effectively to the needs of particular residents; and Reduced bureaucracy and administrative costs. 4.4 Provision of a sub-regional jobs brokerage service The Central London boroughs are committed to the establishment of a sub-regional jobs brokerage service. This will serve as the focus for capturing and providing opportunities for participants of the wrap-around service and other workless residents. It will also provide a first class recruitment and training service for Central London employers by maximising access to the skills of local people, funding, and products and services that will meet their needs, through a co-ordinated partnership approach. It will operate at the Central London level (reflecting the local labour market area) and will build on, and learn lessons from, previous experience in the area - such as the approach to vacancy handling for the Olympic Park development. In particular, the jobs brokerage service will: provide a comprehensive, partnership-based approach to working with employers in order to meet their recruitment and training needs; use innovative mechanisms to improve job capture. These will include use of conditions within relevant procurement contracts and the use of Section 106 and Community Infrastructure Levy (CIL) linked to the planning system; increase job vacancy capture and circulation in order to supply appropriately-skilled people to fill employers vacancies; work jointly with the boroughs and community providers to support local people particularly those who are from disadvantaged backgrounds - to access and retain jobs in Central London; work with sector representative bodies to identify skills gaps/training needs, particularly within the identified growth sectors in the sub-region namely, construction, professional and financial services, hospitality, and health and social care; work with key businesses in the growth sectors to design sector specific training and progression routes; work closely with the information and analysis team to ensure labour market information and opportunities are disseminated effectively to the LEP, training providers, and job seekers; 19

22 20 Employment Business Case work with other agencies involved in recruitment, training and post-recruitment support (through agreed Joint Working Protocols) to avoid duplication and ensure employers aren t bombarded by public sector agencies; and develop and deliver innovative projects designed to match work-seekers skills and abilities with employers needs. The initial focus will be on the construction sector given the scale of forecast activity in the area, the nature of the jobs involved and the opportunities it affords to pilot job capture mechanisms e.g. through use of the planning system. In addition to the ongoing development of Crossrail - one of the most significant infrastructure projects ever undertaken in the UK which started in 2009, and will peak in terms of construction activity over the next two years, and the proposed HS2, there a number of other major developments in the area including: Kings Cross which is being developed by Argent at a cost of 2bn; London Bridge Quarter which is being developed by Sellar at a cost of 2bn; and Vauxhall Nine Elms a 15bn Regeneration Programme that will be delivered by various developers over the lifetime of the programme. In the longer term, recruitment advisers with particular sector specialisms will be required to ensure that they can offer a tailored service to employers in their sector on recruitment and retention issues. In addition to construction, it is envisaged that key sectors will include professional and financial services, hospitality and retail, and health and social care. The advisors will: offer employers an account management approach for the co-ordination of recruitmentrelated activity; provide business support for recruitment, training and workforce development; act as the business interface with other key public sector agencies including training providers, JCP, the boroughs, and other community providers and provide early stage notification of potential employment opportunities; maximise funding available to employers who are recruiting by assisting them to access mainstream programmes (e.g. youth contract) and other discretionary funding available for local recruitment subsidies linked to specific client groups; improve recruitment practices by developing specific pre-recruitment training and employer-led initiatives in order to meet employer needs; and improve access to the residents and potential recruits within Central London by marketing employment and training opportunities to local people and in particular to clients. How will the service be different/add value? Sub regional joined up approach offering a streamlined service for employers Enhanced job capture mechanisms use of contract clauses and procurement routes Economies of scale through joining services up

23 Shared intelligence on skills needs - will assist in providing demand led training Employer involvement in the design and delivery of training 4.5 Information and analysis The sub-regional collation of information and its analysis will be essential to ensuring effective planning of provision and will underpin the delivery of relevant jobseeker and employer support. Two primary roles will be involved: collation, analysis and dissemination of labour market intelligence this will involve gathering information (some of which will need to be standardised to facilitate analysis and comparability of data) from employers about skills gaps, the type of employment opportunities arising, growth sectors and future trends. Procedures will be necessary to share this information with other employers, partner agencies (including community organisations) and training providers to inform and tailor programmes accordingly; and ensuring effective monitoring and evaluation processes are in place to assess the performance of support providers and identify employment and other intermediate outcomes being achieved by client groups. The monitoring information will also be used to identify and address under performance at an early stage and ensure provision continues to respond to business needs. Best practice will be shared, including with other boroughs across London, and regular reports submitted to the LEP. How will the service be different/ add value? Intelligence will assist the design of more responsive employment and skills programmes Monitoring and evaluation of providers strengthens accountability to the LEP and enables quick responses to changing circumstances 4.6 Delivering the new approach It is proposed that the new approach described above will initially be targeted on: (a) a specific cohort of residents who are furthest away from the labour market. It is proposed that these should be Work Programme leavers and NEETs; and (b) a specific sector. It is proposed that the construction sector is used to test the approach, to build on existing activity, established linkages with the private sector and provide a focus on a sector which is forecast to grow and therefore provide accessible work and training opportunities. The two projects will not be mutually exclusive. For example, clients from the wrap around service will be signposted and matched with opportunities arising in the construction sector, as well as being assisted to access opportunities in other sectors. The proposals will be delivered over a three year period and will be rolled out to a cohort of ESA/IB Work Programme Leavers in the second year. Performance information and evidence will be collated on the effectiveness of 21

24 22 Employment Business Case the models with a view to rolling them out further to other sectors and client groups. A summary of each project is set out in the tables that follow. The wrap around service This proposal will involve testing the delivery of the wrap around service approach by targeting two key groups initially: Work Programme leavers - in particular those that would be referred by JCP to the Mandatory Intervention Regime (MIR), although the service will also be available to provide additional support for those individuals referred on to community work placements to assist them progress into more sustainable employment positions; and Young people who are NEET. The service will build on best practice and work already underway within Central London such as that in relation to the Whole Place Community, and the customer journey mapping work being carried out by the Public Service Transformation Network and Southwark, Lambeth and Lewisham. At the heart of the wrap around service is: triage of clients based on need and a single case worker that co-ordinates access to support and different types of provision; ensuring that effective back to work support is embedded into other intensive support mechanisms such as the Troubled Family approach so that clients achieve a range of additional positive outcomes that move them closer to the labour market including volunteering and training; and joining up services for hard to help groups with multiple barriers. This includes integrating national and local employment support and other public services e.g. health. An illustrative customer journey is set out below which highlights the stages from initial referral through to monitoring and performance review. The framework will be developed across all boroughs to ensure that clients follow a standard assessment and diagnostic process. The action plans will be tailored according to individual needs and will incorporate both details of the support pathway and claimant commitments. Where possible, clients will be signposted to existing service provision. Where gaps exist, funding, or flexibilities with existing sources, will be sought to commission the provision of services required. Indicative targets have been set for Central London using baseline data and a review of existing employment support projects in the area. A summary of the targets and projected success rates are set out in Section 6 which describes the costs and benefits expected from implementing this new approach and the assumptions underpinning them. A more thorough analysis of on /off flows of potential beneficiaries is needed to inform the detailed design, phasing and delivery of the project in addition to the early stage development of the protocols for the approach and development of the menu of support. This will be carried out in conjunction with the boroughs and partner agencies including, in particular, JCP.