Local authorities and employability - CPL (6) 2 Part II

Rapporteur: Sir John HARMAN (United Kingdom)

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EXPLANATORY MEMORANDUM

1. Origin

The decision to prepare a Recommendation on Local Authorities and Employability was taken at a meeting of the Bureau of the Chamber of Local Authorities on 29 September 1998.

The decision of the Bureau was motivated by a discussion upon a proposal by Sir John Harman in relation to the New Deal programme in the United Kingdom.

The Bureau readily accepted that the subject should be discussed in the Plenary Session of the Chamber of Local Authorities, given that the question of employment, particularly of young people, before they are allowed to drift into a prolonged period or even a lifetime of unemployment, was and is a major priority for local leaders in member countries and equally, a priority for governments.

2. Preparation

The Bureau, having designated Sir John Harman as Rapporteur, entrusted its Working Party on Policies for the Town to assume responsibility for the preparation of the Recommendation.

Some members of the Working Group have submitted material. In addition, the Secretariat, on two occasions, asked the Secretariat of Chamber National Delegations to provide relevant material from experience in their respective countries.

Documentation and specific replies have been received from Belgium, Finland, Germany, Netherlands, Sweden and Switzerland. In all cases, whether they be the Regional Job Centres in Switzerland; the close involvement of local authorities in Employment Office Boards in Sweden; the legislation on reintegration of the unemployed in the Netherlands; and the strong involvement of municipalities in employability programmes in Finland, they reveal very much the same priorities and approaches in employment and employability programmes. They portray a similar priority given to young people starting out on life, emphasise the revision of programmes to help ensure that the job skills correlate to demand; and underline the fundamental role of local authorities in wider partnerships.

Rather than attempt to pick out individual features from some material, the Rapporteur has preferred to have these national reports published as Addenda to this Explanatory Memorandum. They are available upon request from the Secretariat of the Chamber.

For the purposes of this Explanatory Memorandum, the Rapporteur has opted to draw illustrations principally from the New Deal programme in the United Kingdom, of which he has direct experience; but also make, where appropriate, some more general observations and formulate more general conclusions.

3. The Chamber of Regions and a report on "Regions and Employment".

In 1998, the Chamber of Regions prepared for its Plenary Session a report on this subject.

Its main conclusions appear in Recommendation 52 (1998) and Resolution 72 (1998).

An Opinion on these texts was prepared by Mr Burgeon (Belgium) for the Chamber of Local Authorities.

The texts highlighted the fundamental role of local and regional authorities in assisting employment programmes.

4. Specificity of the current Recommendation as against that of the Chamber of Regions.

The current Recommendation and the approach identified in the Bureau of the Chamber of Local Authorities differs from that of the Chamber of Regions in two major respects:-

a. It concentrates on the specific role of local as against regional authorities, albeit in partnership with other levels of administration and with the private sector;

b. It reflects the conviction that one of the main problems is not so much the shortage of jobs but the shortage of skills to enable people to take up available employment possibilities.

5. Changes in the job market require new approaches to unemployment

Demographic and social change; shifts in industrial production and in commercial practice; rapid increase in the service sector; extensive global economic interdependence; a widespread and intense application of information technology; rising average living standards and shorter working hours – all create new needs and aspirations and have a profound effect on the job market, calling for radical changes in approaches to professional and vocational training. It is no longer sufficient to provide facilities, without reference to such fundamental changes and "hope for the best".

Rather, what is required is a completely new strategy which aims to help into jobs young and long-term unemployed people, lone parents and disabled people who want to work and to improve their prospects of staying and progressing in employment, thereby making a positive contribution to sustainable levels of employment and to a reduction in social exclusion.

This means, in practice, encouraging employers to recruit unemployed people; improving work skills, experience, qualifications, motivation, self-esteem; and maintaining effective job search, tailored to individual needs in a professional, efficient and cost effective manner.

6. Involvement of different sectors

A policy for improving employability, by very definition, implies a full cooperation and partnership between different disciplines and professional categories, avoiding the hitherto sectoral distinctions and even rivalries. It means above all effective local partnerships.

7. European Union initiatives

The role of the European Union in employment policy is growing.

Of particular significance in this respect are the Territorial Employment Pacts, proposed in order to keep pace with the opportunities for increased prosperity and growth in Europe offered by the Single Market and Economic and Monetary Union. The local dimension in such strategy is fundamental.

The approach behind Territorial Pacts is that the labour market is unable to respond effectively to the needs of the market without assistance and that there is a consequent need to shift from passive to active labour market policies.

The key elements of the Territorial Employment pacts are the involvement of all the relevant partners within a specified area and the development of a coherent strategy for job creation. They represent a search for effectiveness which go beyond simply bringing together actors who are each responsible at their respective levels for implementing development policies. They should be founded on a diagnosis of each territory which identifies needs and its potential. The expected result is that the synergy created will be more effective than if individual actors operated in isolation one from another.

Specifically, 1998 guidelines proposed by the Commission mention:-

Improving employability, particularly in relation to youth unemployment and preventing long-term unemployment, building on the early identification of individual needs.

Each member state is asked within a period of five years to develop programmes which ensure that every unemployed young person is offered a new start before reaching six months of unemployment, in the form of training, retraining, work practice, a job or other employability measures. Unemployed adults are also to be offered a fresh start before reaching twelve months of unemployment by one of the aforementioned means or, more generally, by accompanying individual vocational guidance.

This implies that benefit and training systems must be reviewed and adapted to ensure that they actively support employability and provide real incentives for the unemployed to seek and take up work or training opportunities. Where the tax and benefit system combine to discourage young people from returning to work, employability policies can rarely succeed.

Part of the same guidelines concern the development of entrepreneurship and promoting self-employment; making the taxation system more employment-friendly and setting targets for gradually reducing the overall tax burden on businesses.

Also included are proposals for encouraging adaptability in businesses, strengthening the policies for equal opportunities.

Above all, what emerges from Commission proposals is the increasing responsibility of local government for employability policies.

8. The European Urban Charter

The European Urban Charter – a basic text of the CLRAE – constitutes a series of guidelines and principles for local authorities on a wide range of responsibilities and policies.

There is an extensive chapter relating to economic development in cities (see also below item 9) which also refers specifically to employment in the following terms:

"The opportunity for employment is the right of every person of working age in the community, in order that they can participate through their own endeavours in the fruits of what the urban area has to offer. With this expectation the urban users look to local authorities to facilitate and stimulate the provision of employment, particularly for young people seeking their first job, in association with other governmental bodies and the private sector."

The Chamber of Local Authorities, through its Working Group on Policies for the Town, has a continuing task of making better known the principles of the Charter and having them integrated into daily municipal policies.

9. Local Government, Economic Development and Employment of Young People

It is firmly accepted that local authorities, in addition to their traditional role of providers of services, have a significant and definable role in the development of the economic resources and stability of their municipalities.

The European Urban Charter recognised this when it asserted that " Local authorities have a role of economic enablers, assisting enterprises and creating conditions within a town which are favourable to economic development".

Municipalities can indeed be considered, at least partly, as economic organisations for production, distribution, exchange and consumption, in line with the principles of sustainable development.

Economic growth and development depends not only upon an infrastructure of transport, telecommunications, utility services, social and communal facilities but also the assistance and fostering of maximum levels of employment, particularly, though not exclusively for younger people as they start out on a life of work.

10. Other categories of unemployed

Whilst priority attention is given to young people, most countries are concerned by other categories of unemployed. Some have developed pilot schemes to test innovative approaches to getting people back to work and to review the relationship between the tax and benefits system.

Of particular interest may be elements in the United Kingdom contained in the New Deal programme which, although concentrating on younger persons, cover other categories of unemployed.

Over 25 years old

The New Deal for long-term unemployed people aged 25 and over was launched in June 1998 and aims to give these people a chance to look again at their position: the skills and experience they may already have and how these can be built upon. It is a chance to look at a new set of jobs and new ways of finding work, as well as offering a new training opportunity to gain the skills and qualifications employers are looking for.

People join New Deal as they reach two or more full years of unemployment. They meet their New Deal personal Adviser and begin a series of advisory interviews which aim to give intensive, personal help in finding work. The interviews focus on finding out what participants can offer, what they are aiming for and how to achieve it. Those who need it can have access to a range of existing employment and training programmes, provided by the Employment Service or Training and Enterprise Councils. The support from a Personal Adviser will continue after New Deal for those who have not yet found work.

There are also two new elements of provision. There is an employer subsidy of £75 per week payable for 6 months to employers taking on someone from this client group. People on New Deal also have the opportunity to re-train in skills they need while remaining on benefit. Most courses will be short in order to refresh skills or learn new ones, but some people will study or train for up to a year.

The Government believes that New Deal must be flexible and innovative in order to respond to the diverse needs of long-term unemployed people. It has therefore made nearly £130 million available for a series of pilot schemes, beginning in November 1998, to try out innovative approaches to helping people back into work.

New Deal for lone parents

The Government has committed £190 million to New Deal for lone parents over the lifetime of the Parliament. It has been introduced in 3 stages, with the programme becoming fully operational in October 1998. The aim is to ensure that all lone parents who want to work are given help and encouragement to do so.

This is a voluntary programme. All lone parents receiving Income Support benefit, whose youngest child is in their second term of full-time education, are automatically invited to meet with a Personal Adviser who will be able to offer advice and guidance on job search, training, childcare and in-work benefits. Lone parents with younger children are able to join the programme if they put themselves forward.

The programme is being delivered by the Employment Service with support from the Benefits Agency and Child Support Agency. In addition to the main programme, the Employment Service has invited bids from external organisations to run innovative programmes which will provide further assistance to lone parents in their search for work. These are likely to commence in February or march 1999.

New Deal for disabled people

The New Deal for disabled people is intended to find better ways to support those many people on sickness and disability benefits who wish to work and could work given the right support. £ 195 million has been set aside from the Windfall Tax to help improve opportunities for them to move into and remain in work. There are three main elements to the programme:

- innovative schemes to explore how best to help people move into work or stay in work;

- personal advisers to help disabled people to overcome barriers to work;

- an information campaign to improve the knowledge of the existing help available to help people into work and to change attitudes of benefit recipients, employers and the public.The first ten successful bids for innovative schemes were announced in July 1998, and a second round of bids was completed in October 1998. The Personal Adviser Service will be piloted in 12 areas. 6 are being run by the Employment Service and they began in September. The other six have been put out to open tender and will start in Spring 1999.

New Deal for partners of unemployed people

In May the Chancellor announced that partners of unemployed people who are themselves out of work should have access to employment programmes on the same basis as unemployed jobseekers. £60 million has been set aside from the Windfall Tax to ensure that partners aged 25 and over have the option to receive the help they need to get back to work. Childless partners aged under 25 will be included in the New Deal for young people. The details of how this will work is still being developed.

11/12/13. High demand for labour; nonetheless significant levels of unemployment; consequential need for improving employability; and balancing supply and demand

A satisfactory and stable economy does not guarantee by itself full employment, if the skills of people are not geared to the job offer. Paradoxically, therefore, many countries have a high demand for labour co-existing with high levels of unemployment.

In order to combat such a mismatch and to ensure that skills correlate to the current or foreseeable offer, programmes for employability which are tailormade are essential. They must be devised as a result of a continuing dialogue and evaluation with all partners involved, including principally, prospective employers in the private and public sector.

14. Partnership for efficiency

Again, reference could be made to the New Deal arrangements from the United Kingdom where the success of the programme depends upon whole communities pulling together, with local people developing local solutions to local problems.

Local delivery, partnership and inclusivity are important features of the way in which New Deal is being delivered and which will help make it a success.

The first feature which marked it apart was the degree of consultation during the initial design of the programme in 1997. National partner organisations such as the Local Government Association (LGA) were involved closely in this consultative process, and played an important role in influencing the shape of the programme. There were a number of large national consultation events, followed by further opportunities to influence the design of the programme at local level. These consultation events enabled those with experience of dealing with young people and, crucially, employers who would be taking them on, to influence key features of the design. This process of listening to external feedback is continuing and will help the programme to evolve in the light of experience. The Government has also established a Task force with members drawn from major employers (including local authorities), trade unions and the further education, voluntary and environmental sectors, to provide advice both on the initial design and on how the programme might be improved over time.

Although the Employment Service was given the role of co-ordinating the implementation of New Deal, it is being delivered in partnership with other local organisations. Local partners are involved both at the strategic level, deciding what types of provision are required to meet the needs of their unemployed young people, and in the actual delivery of the different elements of the programme.

The delivery structures are different in different areas of the country. In many areas the Employment Service is in the lead, contracting with individual providers of services and taking advice from a group of local organisations with an interest. In some areas, there are more formal Joint Venture Partnerships with a number of key players, usually including the Employment Service, the Training and Enterprise Council and the Local Authority, taking joint responsibility for the successful delivery of New Deal. Other areas have developed different delivery models.

In the formation of partnerships and in the choosing of contractors, a great deal of effort was made to be inclusive. Rather than simply involving people who had historically be involved in the delivery of Government programmes, an effort was made to widen the net and bring in other local providers. The Government believed it was important that everyone had the opportunity to contribute to the success of New Deal.

In ten areas of the country, the decision was made that the delivery of New Deal should be led by private sector organisations, rather than by the Employment Service or other public sector partners. An open competition was mounted in each of these areas to select the organisations who would design and deliver New Deal. These private sector organisations are expected to work closely with other key local organisations.

15. Matching employment policy with skills; a key role of local authorities

Local authorities are in the best possible position (see also item 26 below) to identify the work which needs doing in order to benefit the community as a whole. As a consequence, they can assist in focussing employment and employability programmes which also serve the community as a whole in terms of wider benefits.

16. Involvement of a range of partners and publicity

Elsewhere in the Recommendation there is emphasis upon the involvement of a wide range of partners. Of particular importance is the involvement of the employers community.

As well as ensuring that the voice of employers is heard in the consultation process, there must be an extensive marketing and communications strategy to ensure that employers are aware of employability programmes and what they can offer their business. In the UK, there has been a national advertising campaign, using television, radio and the printed media and a variety of other activities involving individual employers and representative bodies. The success of this activity is demonstrated in the numbers of employers who have signed up to New Deal – almost 33,000 by the end of November 1998.

The communication with employers and representative bodies is continuing, so that lessons can be learnt from their early experience of the programme and issues which arise can be addressed, whether locally or nationally. A major consultation exercise with local partners was initiated in November 1998 by the Minister responsible for New Deal to seek views on how their contribution to the programme can be strengthened and monitoring of performance delivery enhanced. For large companies a structure of national account managers has been established, so that they have one point of contact with the Employment Service. This makes it easier to set up national arrangements for how their vacancies should be handled, and enables any issues to be addressed quickly.

17. RECOMMENDATONS TO NATIONAL AUTHORITIES

18. Consultation of local authorities

Given the vital role of local authorities it is essential that they be consulted by and represented on national bodies concerned with employment and employability schemes.

19. Local partnerships for employability

Hitherto, it was generally the case that cooperation between local authorities, the business community and those responsible for vocational training was poorly organised and, as a consequence, regional and municipal economic development programmes and strategies did not always coincide either with the plans of central government or reflect local needs.

Local partnerships, bringing together a wide range of individuals and institutions, structured around local authority and employment agencies, should be developed, with a legally independent status in terms of other local actors. They should have the right to consider and deal with additional national and EU funds and must have a degree of independence. 

20. Legal recognition and qualified personnel

Alongside legal recognition of such partnerships for employability must go a prestige and position which enables them to recruit and maintain a skilled and qualified personnel capable of developing, executing and evaluating employability programmes.

21. Priority target group

Choices in the use of private and public funds have to be made and priorities established. Inevitably, therefore, programmes of employability, without detriment to other categories of unemployed, will probably concentrate upon young people, for example, 18-24 years old and in order to give them a proper start in life.

22. Initial stages

It is important at the outset that programmes are clearly thought out and begin in a determined and coherent manner. Again, it may be useful to consider the experience of the New Deal programme in the United Kingdom.

New Deal for young unemployed people begins with a period of concentrated, individual help lasting up to 4 months, known as the Gateway. On entering the Gateway, the young person meets their Personal Adviser, someone who will help them throughout their time on New Deal and support their efforts to find a job. The will discuss the young person's needs, ambitions and options, and agree an individual action plan.

Many young people will already be equipped to work, with the necessary skills, abilities and motivation. They will receive intensive careers advice and help with finding and applying for vacancies, and this should help them move quickly into a job. There is further help within the Gateway for those who need it, provided by a range of outside Agencies. Such help includes: short skills courses; independent careers advice; extra training; confidence building.

During the Gateway period, the Personal Adviser will agree with the young person the best route out of unemployment. They will always concentrate first of all on find a suitable unsubsidised job.

Where the young person needs more help to improve their employability and become job ready, the Personal Adviser will help them to consider the opportunities available through the four New Deal options, which are described in greater detail below: a subsidised job (which can include self-employment); work with the Environment Task Force; work in the voluntary sector; and full-time education and training. By the end of the four month Gateway period, all those who have not found a job must take up one of these 4 options. Those who, without good cause, refuse all reasonable offers and choose to do nothing will be subject to whole or partial removal of their jobseeker's Allowance, depending on their circumstances.

Young people who have started an option continue to receive support form their Personal Adviser, who will always be ready to deal with any problems which arise and who will visit them in their place of work or training.

23. Outcome of employability schemes

The desired result of employability schemes should be envisaged from the outset.

In the United Kingdom there are a number of guaranteed results, as follows:

Subsidised employment

Voluntary Sector Option

Environment Task Force

Full-time education and training

24/25 Matching rights and obligations and review of benefits

In order to ensure that the young person can build upon the help received during the initial period, a follow-through strategy should provide continued help and support, with coordination by a personal adviser. Some persons may well require more extensive help.

However, there should be some means of disincentive against persons who refuse, after an employability programme, an acceptable job. There may be cases where a review of unemployment benefit with a gradual scaling down and even curtailing of benefit, may be necessary.

26. Specific role of local authorities

Role of local authorities

Local government is committed to working with central government and other partners to help young people move off benefit and into work. This general commitment is mirrored in the enthusiasm and commitment shown at the local level. Local authorities are involved, at a strategic level, in New Deal in all areas of the country. With their interests in regeneration and community development, they have an important role to play in ensuring that New Deal meets local needs and they are committed to its success.

A large number of local authorities are also involved in the direct delivery of New Deal provision, particularly of the voluntary sector and Environment Task Force options, where they are often working in partnership with other local bodies. An increasing number of local authorities are also taking on young people in subsidised employment.

The Local Government Association (LGA), which represents all local authorities in England and Wales, welcomed New Deal as a concept and has fostered a close and fruitful relationship with government Ministers and their officials.

The LGA, in partnership with other national representative bodies, played an important role in helping to influence the form which the New Deal took. In particular, it stressed the importance of local partnerships as agents for co-ordinating and delivering the programme at local level; the importance of the programme being of high quality, capable of meeting the particular needs of the most alienated and disenfranchised young people; and the important role that local authorities and other public sector organisations could play under the subsidised employment option.

The LGA continues to play an active role in reflecting to Government the experiences, views and concerns of local authorities in delivering New Deal. It is active in promoting the sharing of good practice and interesting ideas between authorities. The Association remains concerned to see that the programme evolves in the light of experience, and that New Deal as a whole is integrated effectively with other initiatives intended to address social and economic issues.

27. Progress and evaluation

It is important that employability programme are properly and regularly monitored and evaluated.

In respect of the New Deal in the UK, the Government publishes monthly statistics about its progress and it has also put in place an extensive programme of evaluation to assess whether objectives have been met. The evaluation will also look at the impact of New Deal on participants, employers, providers, the Employment Service and its partners involved in delivery. This will be achieved through qualitative and quantitative survey work with participants and employers and case studies with all the partners involved.

The evaluation will also examine the impact of New Deal on long-term and total youth employment and unemployment; the overall level of sustainable employment and structural unemployment, other economic variables such as wages, labour market participation, numbers on welfare, public expenditure and tax revenues.

The evaluation is planned to take place over the lifetime of the current parliament.At the time of writing, the results of the scheme are as follows:

1. Over 200,000 young people have joined the programme. The Government's manifesto target was 250,000 which will be reached during the coming 12 months.

2. The success of the scheme has to be viewed against the employment situation as a whole in the United Kingdom. The number of people employed is now at an all-time high at 27.3 m. The number of vacancies is at an historically high level – 226,000 new vacancies were notified to job centres during February of this year. The unemployment rate is at 4.6%, the lowest since May 1980. However, the labour market continues to grow and the ILO measure of unemployment stands at 1.84 m or 6.3%.

3. The statistics for New Deal outcomes are accurate up to the end of January 1999. The New Deal incorporates a "gateway" period lasting up to 4 months (in some cases longer) during which the client's needs and barriers to employment are addressed. Nearly half of all those who have joined New Deal are still in the gateway period.

4. 55,000 young people have moved into sustained New Deal jobs by the end of January 1999. A job is not regarded as "sustained" if the candidate leaves it within 13 weeks of commencement. Of this 55,000, around 80% have gone into unsubsidised work.

5. By the end of January, 51,000 young people had started on one of the other options and are getting training and work experience. Of these, 32,400 have taken up full time education and training; 9,500 have started work in the voluntary sector; and 9,000 have started work on the environment task force.

6. More than 44,000 employers have now signed up to the New Deal. This means that they have undertaking their commitment to make positions available for New Dealers, and where appropriate to maintain the young person in employment beyond the sixth month subsidised period. Only a minority of these employers has yet taken on a New Dealer, so there is still substantial capacity for young people coming onto the scheme.

28. Financial resources

It can be seen from other parts of the Explanatory Memorandum that the government has set aside considerable funding for employability programmes, in the conviction that such an investment makes, in the longer term, economic sense, in the reduction of welfare benefits and the additional stimulus to the economy.

Without such additional funding, employability programmes would be unsuccessful, despite any amount of readjustments and rejuggling of social security and welfare finance. It is essential that national and local authorities are prepared to commit such finance to what virtually all national authorities admit to be one of their priority problems.

29. Positive economic results and benefits for local communities

Not only do employability programmes have direct and indirect positive effects on the economy, but they have wider social benefits in improving the social and physical environment within municipalities, fostering social integration and reducing the tension and petty crime which is often, sadly, the legacy of being without a decent job.

30. Committee of Ministers

31. Development of local partnerships for employability in member countries

Although the Council of Europe is not an international organisation with a specific economic vocation, there is nonetheless scope for the encouragement in member countries of partnerships of employability, because of the evident contribution of maximum levels of employment to the securing of a stable and enriching social and human environment.

Every encouragement is, therefore, given by the Chamber of Local Authorities to the Committee of Ministers to encourage the wider development in all member countries of programmes similar to the New Deal in the United Kingdom and to those being developed elsewhere in a number of countries.

32. Work of the European Committee for Social Cohesion

The Chamber of Local Authorities also suggest that the European Committee for Social Cohesion embarks upon a survey of current and likely future programmes in member countries, with a view to highlighting the principle features of such programmes and their benefits for social cohesion.

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DRAFT RESOLUTION ON LOCAL AUTHORITIES AND EMPLOYABILITY
CPL (6) 2 Resolution