Steps to Work – New Deal
Recontracting Seminar:
Limavady, 24 January 2008
The Northern Ireland Labour Market
Dave Rogers, Analytical Services, DEL
What I am going to cover
1. Northern Ireland Labour Market in Context
2. What matters – employment,
unemployment, inactivity
3. Reconnecting people with the labour
market – DEL’s Skills Strategy
4. What Research tells us
The NI Labour Market - GOOD NEWS
 Fifteen Years ago - unemployment 100,000 plus: today
less than one third of that
 Fifteen Years ago - 50,000 long-term unemployed: today
less than one third of that
 Fifteen Years ago - 600,000 jobs in NI: now more than
770,00 - up by well over 150,000
 Most net expansion in private sector services
 GVA (formerly GDP) per head up by more than a third
(faster than UK as a whole)
Ire ly
la
n
Fr d
a
G nce
er
m
an
y
Ita
N
Ita
N
UK
Ja
pa
n
US
A
Unemployment
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Ire ly
la
n
Fr d
a
G nce
er
m
an
y
80%
70%
60%
50%
40%
30%
20%
10%
0%
UK
Ja
pa
n
US
A
Employment
NI has a relatively healthy labour market in an
international context
The NI Labour Market – Unemployment
 NI unemployment rate – 4.3%
 UK – 5.2%
 Austria – 4.3%
 Italy – 5.9%
 France – 8.1%
 Poland – 8.8%
 Republic of Ireland – 4.4%
 EU27 – 7.0%; Eurozone – 7.2%
Data at Autumn 2007
Source: DETI
Claimant Unemployment – Limavady
Northern Ireland
7.0%
Limavady DC
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
1998
1999
2000
2001
2002
2003
2004
2005
The NI Labour Market - Employment
 NI employment rate 67% (Eurostat definition)
 UK – 71%
 Austria – 72%
 Italy - 59%
 Germany – 69%
 France - 64%
 Poland – 57%
 Republic of Ireland – 69%
 EU27 – 65%; Eurozone – 66%
Lisbon Target – 70% (2010)
Data at Apr-Jun 2007.
Source: DETI
The NI Labour Market – NOT SO GOOD NEWS
 NI still has lowest employment rate in UK (70% vs 75%)
 This means we have proportionately fewer people in work
than the rest of the UK: if we matched the average, we
would have 60,000 more people in jobs
 The employment rate is a key government target – high
employment rates are a sign of a healthy economy – and
the UK has an aspiration of an 80% employment rate
 NI Programme for Government has target of 75% by 2020
 Unemployment is low – but many of those who are
unemployed have either never worked or have not had
sustained employment for a long time and have been on
programmes such as New Deal two or more times
NI Labour Market – Challenges
 Unemployment is low, and therefore increasing the labour force
must look to other sources.
 Unemployment in other UK regions has begun to rise: could this
happen here?
 High level of economic inactivity
 Sickness-related benefit claimants up by 14,000 since 1999
 Low wages (= benefit trap)
 Still high dependence on public sector (c 32% of employment cf
20% in UK as a whole)
 Still relatively weak Private Sector. Median private sector wages
only 83% of UK. Risen faster than rest of UK in recent years – but
slowdown last year – possibly suggesting weaker demand side?
 Some evidence of buoyancy (house prices) but many economists
beginning to be more pessimistic at global, UK, RoI, and NI level
 Recession??
Issue - Economic Inactivity
 The economically inactive comprise those who are out of
the labour market altogether – not working and not
looking for work
 NI has the highest Economic Inactivity rate in the UK –
27% of our working age population is inactive (cf UK 21%)
 We have nearly 300,000 people of working age who are
inactive
 Thus we have ten times more inactive people than we
have unemployed
JSA and IB Claimants; 1971-2007
140
120
100
80
60
40
20
0
71
73
75
77
79
81
83
85
87
89
JSA Claimants
91
93
95
IB Claimants
97
99
'01 '03
'05 '07
Reasons for Economic Inactivity, Spring 2005
Other, 13,000, 4%
Retired, 14,000, 5%
Student, 84,000,
28%
Sick/disabled,
101,000, 34%
Family/home,
87,000, 29%
The big problem is inactivity, not unemployment
70%
ILO unemployment
60%
Inactivity
50%
40%
30%
20%
10%
0%
Disabled
No Qualifications
Lone Parents
Older Workers
Total
TL
ER
EA
CA
RR A G H
IC NT
K
R
BA FE IM
LL RG
YM U
S
O
NE
Y
NE BA LAR
W L LY N E
TO
M
W EN
NA A
BB
LI EY
SB
U
AR RN
M
AG
NO
H
RT AR
H DS
CR DO
AI W
N
G
AV
O
DO N
W
M
AG OM N
HE AG
RA H
FE
LT
BA
N
BR NI
NE
C
W
O ID G
LE
R
E
Y
& RA
I
M
O NE
U
RN
B
DU EL E
NG FAS
AN T
N
O
DE N
ST R
R
Y
CO RA
B
AN
O
KS
E
T
LI OW
M
FE AV N
RM AD
AN Y
AG
H
CA
S
Economic Inactivity Rate
Economic Inactivity by District Council, 2006
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
No data for Moyle DC due to small sample size
Persistence of Economic Inactivity (?)
50. 0%
Inactivity Rate
40. 0%
30. 0%
Total
Male
20. 0%
10. 0%
0. 0%
84 85 9 86 9 87 9 88 9 89 9 90 9 91 9 92 9 93 9 94 9 95 9 96 9 97 9 98 9 99 0 00 0 01 0 02 0 03 0 04 0 05 0 06
19 19
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
2
2
2
2
2
2
Female
Focus on Inactive
 These figures explain why there is increased focus on the
inactive, especially (but not entirely) those on benefit
 This translates in policy terms largely to those claiming
Incapacity Benefit – of whom there are more than
110,000 in Northern Ireland
 UK target – to reduce IB claimants by 1 million (long term
goal)
 The NI equivalent to this target would be to reduce IB
claimant numbers by around 45,000 to about 65,000
Other Factors




Economic Inactivity is not always “bad” eg students
Many people are inactive by choice or decision
Around 10-15% of the inactive would like to work
Many inactive have been out of the labour market for a
long time, have no or poor qualifications and are
operating at low levels of literacy and numeracy
 but not all of them – the inactive also contain a
proportion of well qualified people
Action is more important than desire: it’s more
important to look for work than to want it
Percent
Flows from inactivity in one quarter into employment in the next quarter
40
35
ILO unemployed
Inactive; not seeking, wanting work
Inactive; actively seeking
Inactive; not seeking, not wanting work
30
25
20
15
10
5
ws
93
sa
93
ws
94
sa
94
ws
95
sa
95
ws
96
sa
96
ws
97
sa
97
ws
98
sa
98
ws
99
sa
99
ws
00
sa
00
ws
01
sa
01
ws
02
sa
02
ws
03
0
DEL’s Skills Strategy:
“Success Through Skills”
Aim
To help people progress up the skills ladder in order to:
lift the skills levels of the whole workforce;
raise productivity;
improve competitiveness; and
enhance the employability of those currently excluded
from the labour market.
DEL’s Skills Strategy
Target Groups
 New entrants to the labour force;
 Those already in the workforce; and
 Those who are inactive but could
be re-engaged.
Future Employment Trends - Summary
 Sectors: services will continue to increase –
manufacturing to decrease
 Occupations: managerial/supervisory occupations will
increase – elementary occupations to decrease
 There will be increasing demand for workers with high
levels of skills and qualifications
 On the other hand, the demand for workers with few or
no skills and low levels of qualifications will fall
 This understanding is one of the drivers of the new NI
Skills Strategy: hence importance of re-engaging
those who are disconnected from labour market
Future Employment Trends:
Projected Employment Change by Qualification, 2002-2012
Issue – Literacy and Numeracy
 One key issue for many of those out of the labour market is lack of
essential skills of literacy and numeracy
 We know from the Adult Literacy Survey (dated – 1996 – but still
likely to be indicatively correct)
 18% of those employed are operating at lowest literacy level
 30% of those unemployed
 41% of those economically inactive
 21% of those with some sort of qualifications are at the lowest
literacy level compared to
 46% of those with no qualifications
Research
 DEL has carried out a considerable programme of
research into JSA and IB claimants and the effectiveness
of interventions in this area
 There also exists a considerable body of evidence from
elsewhere
 This has been used in order to shape the design of
Steps and also other, related programmes
 Research projects in NI include a study of New Deal
Returners; a New Deal Leavers Survey; and research
into IB claimants
 Summaries will be published shortly in DEL’s Labour
Market Bulletin
Some Findings
 Reality check – research confirms that many clients in this group
will be very difficult to help…
 … but not all. Significant minority really want to work and also
think that they will work at some time in the future
 Many differences between clients (especially in older age group)
suggesting a more tailored approach needed (“Anna Karenina”
syndrome - "All happy families are alike; each unhappy family is
unhappy in its own way.“)
 Fairly high levels of satisfaction with New Deal (eg in 25+, 63%
either very or fairly satisfied ) – so need to build on this “goodwill”
 Perceptions of the labour market are very important – and tend to
be negative (arguably, too negative). This is an important area for
clients – and for those trying to help them
Overview
 Background
 Customer Base
 Approach
 Provision
Background
 NEW DEAL - Introduced 1998
 Mainstream New Deals
18 to 24
25+
 Voluntary New Deals
Lone Parents
Partners
Disabled Persons
50+
New Approach
 Building on New Deal (BoND)
Local solutions meeting individual needs
 Delayed until 2009
Steps to Work (Pilot)
Aim
To test a Flexible Menu-based approach with
existing and extended customer base
Steps to Work (Pilot)
 Pilot commenced 2 April 2007
 Introduced Menu-based approach
 Extended Customer Base
Economically Inactive -(Incapacity Benefit, Income Support
clients and those on other benefits or none)
 Open to customers aged 25 or over
Trends
 Increase in Voluntary participation
 Increase in Economically Inactive participation
 Increase in numbers entering Employment
Steps to Work (Roll out)
Replaces New Deals
18 to 24
25+
Lone Parents
Partners
Musicians
Self-Employed
Steps to Work (Roll-out)
 Fresh approach to delivery of Provision
 Available to all age groups (18+)
 Flexibility central to success with both Advisers and
Providers key players in assessing and identifying
client’s barriers to employment
Steps to Work – Key Features
 Modular based provision
 Tailored to individual needs using a “pick ‘n mix” and
variable length approach
 Voluntary participation (non-sanctionable)
Steps to Work – Key Features (cont’d)
 Mandatory clients must participate or risk benefit
sanctions
 IB/IS participants remain on benefit
 Training Premium for all participants
 Focus on Employment Outcome
Structure
Step 1
Short duration intervention aimed at those closest to
the labour market
Step 2
Relevant to those who are further from the labour
market who require additional help in finding work
Step 3
Follow-up support and advice for those who have not
found work after participating in Step Two provision
Eligibility
 Step 1
- day one of unemployment/economic inactivity
 Step 2
- unemployed in receipt of benefit for 13 weeks
- in receipt of benefit (IB/IS)
- economically inactive and out of work for 6 months
Step 1
Provision
Gateway
 Short Accredited Courses
 Basic Self Employment Awareness
 Start a Business Programme
 Music Industry Adviser
Step 1 (cont’d)
Core Gateway Course
 Essential Skills Assessment
 CV Building
 Employability Skills
 Interview Skills
 Jobsearch Skills
 Intensive Jobsearch for Returners (mandatory 3 days)
 Confidence/Motivation Building
Step 2
Provision
 Back to Work (inc Work Exp., VRQs)
 Essential Skills
 Qualifications
NVQs (26 wks to complete)
NVQs (52 wks Full)
 Self-employment Test Trading
 Subsidised Employment (up to £100 p.w.)
 Enhanced Support
Enhanced Support
 Mentoring
 one-to-one support
 improve prospects of gaining and sustaining
employment
 Pre employment (12 weeks)
 In-Work settings (12 weeks)
 Only available in conjunction with provision
Step 3
Follow-up
 Adviser review Interview/s
 6 weeks duration
 Avail of Step 1 provision not accessed
during the Gateway process (e.g. Short
Accredited Courses, Core Gateway modules)
Summary
 Builds on New Deal (Delivered under New Deal legislation)
 Accessible to a wider customer group
 Introduces greater flexibility
 Single menu approach
Steps to Work Delivery
Arrangements
Brian McVey
Programme Management and Development Branch
Overview
 Model of Delivery
– How will provision be delivered?
 Contractual Areas
– Number and scale of contract areas
 Tendering Arrangements
– Planning and Timescales
Background to the Re-contracting process
 Expiry of existing contracts
 Stakeholder feedback
 Approval and extensions
 Mitigating Factors
Review Process
 Composition of Working group
 Wider considerations
 Ministerial Clearances
DELIVERY MODEL
 Existing model
– Consortium based
 Issues
• Historical influence
• Management of consortia
• Membership
• Referrals
• Clarity of roles
• Legal dimension
Developing a Delivery Model
 Options considered
– Consortia Model
– Single Contractor Model
– Prime Contractor Model
– Hybrid Model
Option Chosen
Prime Contractor
• Single Contract Provider
or
• Partnership with a nominated Prime
Contractor
PRIME CONTRACTOR MODEL
“Prime Contractor” describes an arrangement where DEL
contracts with a single service provider:
(a) to provide directly a substantial proportion of
services
(b) to sub-contract some service delivery; and
(c) to manage the performance of the subcontractors.
The prime contractor model can also include an
arrangement where one organisation acts as lead
contractor on behalf of a number of providers in
partnership / consortium
Contracting Areas Review
OBJECTIVES
 Reduce the Number of Contract Areas.
 Reduce the Administration burden.
 Create a viable package for the delivery and maintenance of
services.
 Ensure longer term sustainability of the contracts.
Existing Contracting Environment




26 Consortia
A Number of Core Gateway Providers
NDSE, NDLP, NDP and NDfM contract holders
Review of Public Administration
– 26 District councils reducing to “Super Councils”
– 12 HSS Trusts reducing to 7 Local Commissioning Groups
– 16 F.E. Colleges merging into 6 “Super Colleges”
Options available








26 District Councils
18 Parliamentary Constituencies
35 Jobs and Benefits Offices / JobCentres
7 DEL Districts
3 DEL Regions
6 Social Security Agency Districts
6 Counties
5 Cities
Considerations
 New Local Government Boundaries
 Financially viable
 Retain a strong local identity
 Equitable spread of numbers
 Mapping Processes
Decision
 Parliamentary Constituencies
 10 Contract Areas
 Issue
– Contract Areas do not always coincide with DEL
office catchment areas
Parliamentary Constituencies
Contract Areas
Re-Contracting Timeline






Mid January - Information Sessions
Early March – Issue Invitation to Tender
Late April – Deadline for return of Tenders
May – Evaluation of Tenders
June – Award of contracts
1st September - Contract renewal date
Steps to Work – Funding
 Increased focus on job outcomes.
 Steps to Work is not about putting numbers through a Welfare to
Work programme.
 Streamlined funding model.
 Unified funding model.
 Shift balance of funding towards results.
 Subject to DFP approval.
Steps to Work – Gateway Funding
 Core Gateway
£40 per day (maximum 10 days)
 Short Accredited
Training Courses
£30 per day plus actual travel costs
(maximum 10 days)
 Self-employment support
Basic awareness session
£25
Additional Support on SABP £150
 Advice and guidance –
music industry employment
£150
Steps to Work – Funding
Back to Work Provision
3/4 weeks
5/6 weeks
7/8 weeks
9/10 weeks
11/12/13 weeks
£
£
£
£
£
420
550
550
550
550
-
-
140
320
550
420
550
690
870
1,100
ORF – Job (13
weeks)
1,000
1,000
1,000
1,000
1,000
ORF – Job (26
weeks)
500
500
500
500
500
Total Funding
Available
1,920
2,050
2,190
2,370
2,600
Start Fee *
Week 6 ** Fee
* payable subject to minimum of 2 weeks attendance.
** payable following 6 weeks attendance.
Note: No further funding where participation extends beyond 13 weeks (up to a maximum of 13 weeks).
Participant continues to receive BBTA and Provider remains responsible for ongoing
review/management.
Steps to Work – Funding
NVQ Units **
(up to 26 weeks)
Essential Skills
(up to 26 weeks)
NVQs
(up to 52 weeks)
£
£
£
1,100
1,100
1,100
Week 13 Fee
500
750
Week 20 Fee
-
-
1,000
1,600
1,850
2,100
400
500
600
2,000
2,350
2,700
ORF – Job (13 weeks)
1,000
1,000
1,000
ORF – Job (26 weeks)
500
500
500
3,500
3,850
4,200
Start Fee *
ORF – Qualification
Total Funding Available
-
* payable subject to minimum of 4 weeks attendance.
** also payable for support with self-employment (excluding qualification ORF element of £400).
Steps to Work – Funding
 Enhanced Support on provision (pre-employment)
Start fee on production of LDP
£300
Week 6 Fee
Payable after 6 weeks attendance on provision.
Week 12 Fee
Payable after 12 weeks attendance on provision.
£150
£150
 Above funding model also applicable for specialist support to participants
interested in music industry employment opportunities.
Extension of up to 6 weeks (where appropriate)
£150
Not applicable to music industry support element.
 Enhanced Support (in employment) fees from
£150 to £600
Quality Improvement
Department for Employment and Learning
Quality Improvement Strategy
Background and Scope
 Department seeks to ensure funded provision is of
excellent quality;
 Provision incorporates all providers within the NI
further education and training system;
 Department is committed to improved strategic
approach to quality and performance; and
 Enhanced emphasis and priority given to its role
relating to monitoring of funding and contracting.
The Vision
An excellent further education and training system that is:
 Responsive to meeting the needs of learners,
employers, the wider community and ultimately
providers;
 Committed to continuous self-improvement through
well-embedded, and rigorous self-assessment and
development planning; and
 Able to access easily a coherent framework of support
and guidance that focuses on self-improvement, high
quality leadership and management, and continuous
professional development (CPD).
Principles
• Develop and embed culture of self-improvement (continuous selfdevelopment and excellence);
• Development of clear and coherent systems of support to ensure that
inspection findings are addressed effectively and efficiently;
• Ensure that the national standards for lifelong learning meet the needs
of teachers, trainers, and tutors;
• Develop strong, innovative and creative leadership and
management;
• Align the programmes of work, protocols, procedures and standards of
key partners (ETI, LSDA(NI) and LLUK); and
 Establish a Quality and Performance Branch. The branch will provide
advice to the funding divisions of the Department’s business areas on
how to improve or remove poor quality provision.
Contract Management Function
 Quality and Performance Branch – ensure consistent
and centralised approach to management and
monitoring of contracts focusing on high quality and
improved performance
 Holistic vieof quality improvement and contract
management – advice to business areas regarding
improving or removing poor quality provision
 Take appropriate follow-up action in line with ETI &
FAST findings and recommendations
Conclusion
 Improving quality and performance is Department’s top priority.
 Strategy is aimed at developing capacity for all providers to become
successful self-improving organisations.
 Quality Improvement cannot be imposed.
 The Strategy outlines the key actions that need to be achieved by all key
partners including the Department to ensure its success.
 Focus on the best processes, programmes of support and resources that
will improve teaching, training and learning, and leadership and
management, and provide professional development opportunities for all
staff.