Skills for Work

1. Skills for Work Christopher Nunn DWP International Unit

2. UK Overview (i) UK estimated population 62 million. Public spending by the UK's central government departments, 2011-2012 - Approx £695bn. Department for Work and Pensions £167bn. Benefit Spending £159bn.

3. UK Overview (ii)- Main Working Age Benefits Jobseekers Allowance (JSA) – Both income and Contribution based Employment and Support Allowance (ESA) - Both income and Contribution based (limited to 365 days)

4. UK Overview (iii)- Main Working Age Benefits Contributions through National Insurance. Not hypothecated. JSA Payment fixed, not based on former salary. €368 Per Month Approx.

5. Statistics March Labour Market Statistics (May 2013)

6. DWP and Jobcentre Plus The Department for Work and Pensions is responsible for welfare and pension policy and is a key player in tackling child poverty. It is the biggest public service delivery department in the UK and serves over 20 million customers. Jobcentre Plus is part of the Department for Work and Pensions. It provides services that support people of working age from welfare into work, and helps employers to fill their vacancies.

7. DWP Policy Direction Reform of the benefit system and introduction of Universal Credit, to make work pay. People expected to take opportunities offered. A clear strategy for supporting people into work, whether they need short term or more intensive long term support. For people closer to the labour market, keeping them engaged in real work with employers and active in their job search. Giving more responsibility to advisers to assess individual needs and offer the right support. Giving more freedom to contracted providers, to make judgements about how best to support jobseekers who need extra help. Working with partners to find new ways to help people back to work.

8. Skills and Benefits Evidence shows that the lower the qualification someone has, the lower their chance of being employed. So some unemployed people on benefits are allowed free training. This is funded by the Government’s Skills Funding Agency. Claimants of Job Seekers Allowance and Employment Support Allowance (Work-Related Activities Group) are eligible for fully-funded training if an adviser decides it would help them get work. Claimants don’t usually do a full qualification; they do small units instead to improve their employability. The referral process: Adviser sends claimant to college College decide they can help Jobcentre Plus adviser decides claimant needs training College interviews claimant to assess need College puts claimant on a course. This includes employability skills and vocational education. Claimant stays on benefit and has to look for work

9. Contracted provision • Black box • Maximum 2 years • Cross benefit • Minimum standards Adviser support Support through flexible provision Claimant journey Before the Work Programme Work Programme After the Work Programme (Claim duration) Adviser support Flexible support Support through flexible provision Policy is under development for post-Work Programme support Condition Of being on Benefit - face to face contact Fortnightly signing Fortnightly signing Fortnightly signing

10. Before the Work Programme Jobcentre Plus managers and advisers given as much flexibility as possible. Advisers use their skills to give customers the help they need. Access to a £118m (€142m) Flexible Support Fund. Jobcentre Plus will be judged by its results not by its activity. A new way of supporting jobseekers consisting of Face to face meetings Flexible adviser support, and a menu of help for claimants.

11. Flexible menu of support Skills Basic Skills Support Occupational Training: Sector based work academies Peer Support Mentors Work Clubs Work Experience Internships Work Experience Mandatory Work Activity Apprenticeships Flexible Support Fund Discretionary funds Support partnership work to tackle disadvantage. Jobsearch Advisor Support Job vacancies database Online support Careers Advice JCP Group Sessions European Social Fund 25% IB, IS volunteers 75% disadvantaged families Volunteering Work Together Enterprise New Enterprise Allowance (including mentoring and financial support) Enterprise clubs Self-employment guidance

12. Skills Training helps people get jobs Employers have the job vacancies and say the type of skills they need from their prospective employees Jobcentre Plus has unemployed people who either have those skills or can be given training to get them Training providers deliver the training Careers advisers help the process along and in some places are based in Jobcentre plus offices We expect people who agree to training, to actually start the training and not to drop out.

13. Levels of Skills Training Higher Education Level 4 and above Higher Level Apprenticeship Level 4 and above Advanced Level Apprenticeship Level 3 In-work training Level 2 and above Intermediate Level Apprenticeship Level 2 Access to Apprenticeships (16-24 year-olds) for those below level 2 Pre-employment training Levels 1,2 or 3 Employability skills Level 1 Basic skills Entry Level

14. Skills Training Offer Basic literacy and numeracy. English for speakers of other languages; short job-focused training; and support for those who are newly redundant; first full NVQ Level Two (ESO) ; and a first full NVQ Level Three qualification (bachillerato) for young adults aged 19- to 24-years-old.

15. Skills Conditionality is a process based on mandatory referrals to encourage attendance and participation on skills provision. Skills Conditionality applies to claimants on Jobseekers Allowance (JSA) and Employment and Support Allowance (ESA) in the Work Related Activity Group (WRAG). Where a JSA/ESA WRAG claimant is identified as having a skills need which is the main barrier to them gaining employment they should be mandated to attend provision to address these skills needs. Failure to attend, take part or complete this provision may result in a sanction being applied to the claimant’s benefit. Skills Conditionality

16. The Work Programme A single programme for claimants. Contracted provision. £3-£5 million (€3.6 - €6 million) over life of contracts (7 years). ‘Black box’ design: providers have the freedom to provide support based on the needs of individuals. Payment largely through payments for keeping people in work for a sustained period of time. Providers will be given longer to work with customers (for 2 years) so that there is a real incentive to invest in customer support.

17. After the Work Programme For customers who require further support as they reach the end of the Work Programme. Aim: to have support in place by summer 2013 to when the first Work Programme claimants finish their 2 years with providers. Aim: to ensure that these claimants remain engaged in meaningful activity and continue to move closer to the labour market.

18. The £1billion (€1.2 billion) Youth Contract • 160,000 wage incentives - £2,275 (€2,730) to recruit a young person. • Extra 250,000 Work Experience or sector-based work academy places over the next three years, total of 100,000 or more a year. • 20,000 extra incentive payments worth £1,500 (€1,800) each for employers to take on young Apprentices, taking the total to 40,000. • Extra support through Jobcentre Plus for all 18-24 year olds. • Referral for a careers interview with the National Careers Service. • £150 million (€180 million) to support the most disengaged 16-17 year olds.

19. Skills – Strategic Conclusion Skills have become the global currency of 21st century economies. Improving skills is essential to building sustainable growth and stronger communities. A strong further education and skills system is fundamental to social mobility. Employers drive skills demand – they should be leading or heavily involved in the skills system.

20. Skills shortages Skills shortages can affect growth through their adverse effects on labour productivity. At the firm level, shortages can affect the hiring cost per skilled worker and hinder the adoption of new technologies. Identifying skills shortages is not easy - genuine skills shortages exist when vacancies remain unfilled despite attractive working conditions. Cyclical skills shortages: during growth, when unemployment is low and the pool of available workers is reduced to a minimum. Structural skills shortages: when certain skills are not immediately available in the labour market, even when unemployment is high (e.g. when new technology is adopted).

21. Skills Mismatch Over-skilling: a worker whose skills are under-used. May lead to skills loss and a waste of the resources used to acquire those skills Over-skilled workers are less satisfied, generating more staff turnover and affecting productivity. Under-skilled workers lack the skills needed for their job, and affect productivity. Skills policies should support employers in making better use of the skills available to them. Relevant adult education and employer-provided training can help tackle skills mismatch, especially under-skilling.

22. New and Emerging Skills Over the past 50 years there has been: a rise in the demand for non-routine cognitive & interpersonal skills; a decline in the demand for routine cognitive and craft skills, physical labour and repetitive physical tasks. Current projections see this continuing. Employment among low-skilled workers will decline, while employment among highly skilled workers is projected to increase, with a shift from manufacturing to service-based economies. Very difficult to forecast skills needs beyond general trends – so it’s crucial that education systems rapidly respond to new demands, which needs involvement from employers in forecasting skills needs.

24. Addressing Skills Shortages Education and training systems need to have access to information on the demand for skills and the drivers of changes in skills demand. Employers need to work with education and training systems to provide that information and design training that meets their demand. A long-term perspective on skills development, even during economic crisis, may reduce skills shortages and their impact on economic growth. Facilitating entrance for skilled migrants can also help deal with skills shortages in the short term if focused on occupations for which vacancies are hard to fill.

25. Public Employment Service (PES) Role Skills strategy needs to be a collaborate approach, from demand, through training design, to supply. PES can contribute to the overall strategy in various ways, depending on institutional configuration in each country. In many cases it will be supplying clients to appropriate training. Examples The PES can work with employers to understand what they are looking for in the labour market – both nationally and locally - and tailor their services to clients and the training offered/bought accordingly. The PES can work with individuals to understand their skills, understand what work they are looking for and whether they have the right skills for the job – especially basic employability skills for those furthest from the labour market. Effective co-operation with other Ministries (e.g. education, industry), training institutions and businesses is crucial.