Sustainable Employment Through Skills | JHP Group strategy overview

1. Sustainable Employment Through Skills JHP Group Welcome! Jim Chambers, Chief Executive

2. JHP Group Overview • Established in 1983 • Heritage in vocational training and more recently welfare-to-work • National provider (including Wales & Scotland); deliver in all English regions • Now privately owned (MBO backed by LDC) • Turnover of circa £80m per annum – 60:40 Skills and welfare-to-work (W2W) • Grown by 300% over the past 4 years • 1,300 staff – over 1,000 delivery staff (trainers, tutors, coaches etc) • 120 business centres (mainly welfare-to-work provision) • Ofsted Grade 2 • Apprenticeship success rates above national averages: 78%

3. JHP Group Overview • Department for Work and Pensions (DWP) • Work Programme Prime Provider £70m • Work Programme subcontracts £20m • JCP Support Contract £30m • MWA £20m • Programmes for the Unemployed (PFU) £26m (12% of national allocation) • Others £10m • Skills Funding Agency (SFA) £40m • Skills Development Scotland (SDS) £4m • Welsh Assembly Government (WAG) £0.5m

4. Current landscape Employability and Skills Markets • Skills • Apprenticeships • Flexibilities • Workplace Learning • Job outcome payments • FE Loans (24+) • Focus on level 3 attainment • All-age careers service • Supply chain management Employability Payments by results Incentives for sustained job outcomes ‘Black box’ approach Universal Credit Single programme with differentiated payments for customer groups Supply chain management

5. Factors in sustainability Include: • Job availability • Employers’ skills needs • Transport • Housing • Childcare • Skills levels • Experience • Health • Motivation Increasing skills levels Increasing sustainability

6. What skills work? Skills that effectively support sustainability will: • Meet local labour market needs • Be designed with employers’ input and involvement • Provide generic employability skills, basic skills, technical skills and knowledge • Be accessible in work – so skills can be put into ‘practice’ and employed individuals can participate • Include work placements • Provide a wage return to the individual – Research by CESI states Apprenticeships in particular provide a higher return; namely 16% at level 2 and 18% at level 3

7. Skills & Sustainability in Practice The good…skills opportunities for Work Programme clients’ sustainability • Unit flexibilities (sector tasters) and short courses funded through new flexibilities; clients continue skills development and can complete the full Apprenticeship once in-work • Pre-employment training designed with employers • Underpinned by sustainability assessments, work transition reviews, work coaches and mentoring schemes As at November 2011, 86.6% Work Programme clients achieving sustainability However… a disjoin remains prevalent in other areas • Adverse affects for some client groups e.g. 26 year old recently employed wishing to sustain employment and access skills development do not attract similar funding levels as those 24 years and below

8. What next? JHP Group commissioned report with CESI, “Integrated employment and skills: maximising the contribution for sustainable employment” proposed 3 over-arching recommendations for consideration: (1) Sustainability and progression outcome payments There is a need to improve provider focus on IES through appropriate and aligned outcome payments for both welfare to work and skills providers. (2) Revised skills funding priority areas and mechanisms There is a need to revisit priority areas and introduce more sophisticated mechanisms to ensure funding is based on need and affordability. (3) Black box approach to delivery There is a need to allow providers the flexibility of a ‘black box’ approach to delivery and reduce funding, policy and institutional barriers to IES.

9. (1) Outcome payments There is a need to improve provider focus on IES through appropriate and aligned outcome payments for both welfare to work and skills providers. • Introduce outcome payments for skills providers for job outcomes and sustainability. • Introduce outcome payments for Work Programme providers for career progression. • Use a differential payments model for skills provider outcome payments.

10. (2) Skills priorities There is a need to revisit priority areas and introduce more sophisticated mechanisms to ensure funding is based on need and affordability. • Introduce a new priority group designation for those newly employed following a period of unemployment. • Refine current skills fee remissions relating to employer size. • Revise current skills fee remissions relating to age and previous qualifications. • Revisit changes to funding eligibility for those on inactive benefits.

11. (3) Delivery There is a need to allow providers the flexibility of a ‘black box’ approach to delivery and reduce funding, policy and institutional barriers to IES. • Extend the black box approach used within the Work Programme to skills providers. • Simplify funding structures. • Revise the minimum levels of performance mechanism. • Support efforts to offer and deliver flexible and innovative training. • Support efforts to co-locate services and share information. • Utilise IAG to create informed customers and employers.

12. Summary What works to help people sustain work and progress? • State of the nation: youth/rising unemployment, value for money, delivering more for less, UK competitiveness • Welfare to Work: payment by results, black box approach, single ‘Work Programme’, sustainability • Skills: outcome incentive payments, flexibilities, Apprenticeships • Skills levels the increasingly important factor in sustaining employment opportunities secured through provider support • Positive steps (e.g. single adult skills budget) welcome, however, the disproportionate effect on certain customer groups should be mitigated with focussing funding on those that need it most e.g. those with the lowest skills and experience levels • Further alignment of policy and funding streams needed to achieve the potential benefits to the customer, the employer, the Government and the taxpayer