Scottish Government

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The contents of this report form the evidence for, and recommendations to, the Scottish Executive on what the Employability Framework should contain. Publication is not an undertaking that the Scottish Executive will implement its recommendations. The findings of this report will be addressed by the Framework document when it is published later in the year

Summary

This Report sets out the findings and recommendations of the Interventions Workstream of the Scottish Employability Framework. Its purpose is to inform the development of a Framework that will make a significant difference to the quality, relevance and impact of services to enhance the employability of people in Scotland.

Employability is a new concept. It is first and foremost about helping people gain and keep work, but it is about more than sustainable employment. 'Employability' differs from 'welfare to work' in three main ways:

• It shares the same focus on enabling people to get a job but it is placed in the context of giving them the skills, attitudes and confidence needed to maintain their employment in the long term
• The task of enhancing employability applies to those in work as well as those seeking work. It is focused on reducing the risks of job loss, encouraging progression where appropriate and helping individuals gain the skills and insights that they need to plan for and respond to change
• The employability approach is strongly (though not necessarily) associated with the shift of focus from those who are registered unemployed to those who are on non- JSA benefits, especially Incapacity Benefit. This group typically face multiple barriers to work and will need support from a number of specialist sources if they are to maintain their progress into employment. Most are 'hard to reach' and many will be 'hard to deal with', but it is important to appreciate that effective engagement with the 'hard to reach' can sometimes lead to rapid employment outcomes.

These features mean that there is a strong emphasis on comprehensive assessment of individual needs and on sustaining progress as clients tackle their barriers to work, find a job and then become established in work. Successful employability services will therefore need to have a strong focus on the case management of individuals' progress.

Employability is therefore a core, permanent, universal, and positive aspect of economic and social policy, rather than just a way of fixing things for individuals when they go wrong. The overarching concept of employability provides a powerful way of connecting the concepts of welfare to work, lifelong learning, career planning, guidance and workforce development.

For some in the non-Jobseekers Allowance group, conventional work may not be a realistic destination in the short term. Stepping stones - for example, Intermediate Labour Markets or Supported Employment projects - may be needed to help people move into more conventional work. For others, a conventional job may never be a realistic destination and an appropriate outcome may be employment in a social firm or a sheltered workspace.

This appreciation is particularly important in the light of the emphasis we place on outcome based procurement, with the gaining and sustaining of appropriate work outcomes as a key driver of the procurement process. This emphasis on 'appropriate work outcomes' rather than substitute or surrogate activity (for example, being 'parked' with no real progress towards work in prospect) as being vital to the development of an effective employability approach.

Our recommendations focus on actions that will help to develop an effective 'employability service' in Scotland over the next three years. By 'employability service' we don't mean a new service and certainly not a new organisation or layer of bureaucracy. We mean instead a better joining up of current funding and services to provide clients with a much more coherent and progressive experience that leads them into and through work.

However, we are conscious that there is a more radical longer term agenda that this shorter term action should work towards. In our Report we suggest what this longer term agenda might look like - because clarity on the longer term goals means that short term action can be designed with an eye on more ambitious longer term change.

Well over £500m is spent in Scotland each year on services designed to help people find work. Most of the services help less than 40% of their clients find a job - in relatively tight labour markets. Many of these clients subsequently lose this job. This level of performance, and the current variety and complexity of local delivery means that we are confident that a significant improvement in the outcomes achieved with this spend should be expected and can be achieved. However, our key recommendation for the creation of effective local collaboration will need financial incentives to achieve the desired change.

Finally, a word about language. In terms of local coherence between the different funders and service providers we don't have an 'employability service' in Scotland. Indeed, some would say we have a competitive free-for-all that provides clients with a disjointed and complicated service, and funders with poor value for money. We do have many of the components that are needed to create coherence. And there are examples where such an approach is being developed: Joined up for Jobs in Edinburgh and the Equal Access to Employment Strategy in Glasgow provide the closest approaches we have to a local employability service.

In particular we lack common in-depth and in the round assessment approaches and the systems and intelligence to case manage clients through the array of services needed to enable someone facing multiple barriers to working to get a job and stay in employment. We do have employment services which work with individuals and employers and focus on enabling people to find a job (and, sometimes, to stay in employment). And we have a range of specialist services which provide the support and experience that clients need to tackle specific issues such as mental health, disabilities, homelessness, drug dependency, childcare, literacy and numeracy and career planning.

In this Report we therefore use the term 'employment services' to refer to existing work-focused services (such as Jobcentre Plus and local labour market intermediaries) and 'specialist services' to refer to the array of services available to help clients deal with more specific issues which are relevant to but not always directly related to work.

The education sector - schools, Colleges and Universities - contains both kinds of service and it has key roles to play in developing people's skills, knowledge and attributes, and, together with Careers Scotland, supporting their career planning. It is important that these sectors continue to develop their services to support people's employability.

We have identified three key areas for action:

• The creation of local collaborative frameworks for employability in each labour market area
• The promotion of more effective procurement by using outcome based funding wherever possible
• The development of a stronger, higher performing infrastructure

Our most fundamental recommendation is that the key funding agencies work together both nationally and locally to create an 'employability service' in Scotland. This should not be a new organisation or a new layer of bureaucracy, rather it is a framework for the existing providers of both employment and specialist services and it needs to have four key components:

• The joining up of funding at the national level and the creation of a framework which helps all the key agencies and Departments to be clear about their roles and relationships. What this would mean in practice is the recognition of common objectives and the avoidance of competing or contradictory targets.
• Collective local action to produce coherent local frameworks for funding, delivery, support systems and staff development (more detailed recommendations are set out below).
• Procurement by the collaborating funders should be driven by a clear focus on the outcome of sustained work.
• Investment in the local infrastructure for employability.

Mapping exercises in a number of areas in Scotland have revealed a huge number of providers delivering a wide range of employment services in ways that at best lack coherence and coordination and at worst hide significant under-performance. To create effective local collaborations we recommend that:

• The key funders of employment and specialist services in each locality should get together and manage collectively the delivery infrastructure they fund, while retaining responsibility for commissioning and managing their own contracts. These funders could include Scottish Executive, Jobcentre Plus, Scottish Enterprise/Highlands and Islands Enterprise, NHS, Communities Scotland, Objective 3 Partnerships (where relevant), and Local Authorities.
• The group should only include funders but it should develop ways of consulting effectively with other stakeholders in the development of an effective local employability service.
• This collective action should use existing structures where possible (for example, Community Planning Partnerships and their Local Economic Forums, Welfare to Work Forums) but the principles that should guide its design may require a new structure, particularly in terms of the issue of co-terminus boundaries:

• It should involve all the key agencies who need to be involved to fund an effective local employability service
• It needs to operate at a level at which funding decisions can be made and implemented - in other words, organisational representation needs to be at a senior decision making level
• It needs to cover an area which makes sense as a labour market
• It needs to be able to act swiftly and decisively
• It needs to be able to receive and respond to management information which records the performance of the local service
• It needs to be accountable both locally and to the Scottish Executive and the Department for Work and Pensions for the performance of the service

• With a small group of key funders, the management should be essentially collective, but there should be local agreements about roles and responsibilitiesincluding local leadership and clear accountabilityfor the performance of the local employability service in terms of overall performance and value for money.
• This should involve a number of tasks:

• Service delivery (for example, in specific areas or for specific groups) needs to be analysed in depth by sharing information on who funds what, and what it delivers. Mapping studies can provide a starting point by identifying projects and services funded by more than one agency.
• Service planning should be built on this informationplanning should be built on this information, taking into account major external factors such as the impact of reduced EU funding post-2006.
• Funders should then develop a more co-ordinated approach to commissioning service delivery which might lead eventually to joint commissioning of some services.

• Local 3-year Action Plans should be produced which answer the following questions:

• What is the nature of the local labour market and the employment opportunities currently and in the foreseeable future?
• How can employers be reached and engaged in a coherent and coordinated way?
• What are we trying to achieve for jobless people - particularly those apparently furthest from the labour market - over the long term?
• What kind of delivery infrastructure do we need to raise the employability of jobless people and meet the demands of employers in the local labour market?
• How does the current delivery infrastructure need to change to match this requirement and how can we work together to build this capacity?
• What do the funders need to do in the short and the long term to create such a delivery infrastructure?
• What information do we need to manage effectively and describe performance persuasively?

• As part of the 3-year Action Plan the group should create a monitoring and evaluation framework that provides them with the management information and insights they need to manage the performance of the employability service
• All local providers should be required by their funders to come together regularly to share the learning and good practice that has been gained and to identify actions (and responsibility for making them happen) that will enhance service quality, relevance and impact. This requirement should also apply to those providers with contracts covering different local areas.
• The Scottish Executive should reward effective local collaboration through additional funding for activities identified by the local partners which enhance and underpin their local employability service.
• The specific issues raised by rurality means that the structure and focus of these local approaches should be flexible and not overly prescriptive.
• The Scottish Executive should identify a small number of labour market areas with partners willing to develop this new approach, or to build on existing approaches to take them to this next stage of effective collaboration.

• The key role of the public sector in implementing a successful approach needs to be recognised - in terms of their provision of employment and specialist services, the scale of their employment (are their recruitment practices accessible by the target client groups?) and as potential providers of a wide range of 'stepping stones' to jobs elsewhere.

Other recommendations

To drive the successful implementation of this employability service we have identified 6 areas for action:

1. Strengthening the focus on jobs and work
2. Driving successful engagement
3. Ensuring progression in work, not just on getting a job
4. Developing smarter procurement approaches, with a strong focus on employment outcomes
5. Investing in the capacity of services
6. Intervening early to reduce unemployment

In this section we present our other recommendations under each of these headings in more detail.

1 Strengthening the focus on jobs and work

There is a wide range of funders of the support that individuals may need to enhance their employability, and a much wider range of organisations providing services which focus on helping people get a job. There are also specialist organisations which help people overcome particular barriers to progress towards work, though their service is not explicitly about employability (for example, it may be about housing, drug abuse or mental health). We are clear that all these services can provide a better service for their clients by appreciating the role they can play as part of a local employability service, and helping their clients (wherever appropriate) to see themselves as progressing into work.

Our recommendations are that:

• As soon as possible work should be established as a tangible horizon for all clients who are capable of working
• Employment services should develop an even stronger focus on sustainable employment outcomes
• The respective roles of the different services should be made explicit at both a national (strategic) and a local (delivery) level.
• Employment services need to work closely together to ensure that they present employers with an accessible, coordinated and coherent recruitment and support service.

2 Driving successful engagement

There is a need to strengthen the emphasis on reaching out to and engaging those on non-Jobseekers Allowance ( JSA) benefits if we are to draw in significant numbers of this group. We recommend:

• The development of stronger working relationships between employment services and specialist services working with those on non- JSA benefits. This should include the production of agreed referral protocols and the development of a skilled case management capacity.
• The development on a pilot basis of more in-the-round services by co-locating ' specialist service' and 'employment service' staff, working together at the same place or in the same organisation to provide a holistic service for their clients.
• A greater and moreeffective use of community based personalised services (to provide more effective outreach) and resources such as Housing Associations and the Health Service as places where clients may be reached and engagement established.

• Basing service delivery and programmes on need rather than client category (eg age, status, benefit being received) and thinking carefully about the different effect policies and programmes have on women and men.

• Ensuring that services help individual clients gain a clear sense of control over their future and the service that they receive.

There is an important job to do to help some specialist service providers appreciate that employment could bring significant benefits to their clients. And some current contracts will encourage them to hang on to clients rather then refer them as soon as it is appropriate.

It may be that significant penetration of the non- JSA market may only happen by introducing mandatory attendance at specialist or employment services. But we feel strongly that this experience should be so positive and appealing that few are likely to regard it as coercion.

3 Ensuring progression in work, not just on getting a job

The return from the investment in enabling people to find a job is often short-lived because a significant proportion of the 'successful' clients of current employment services subsequently become unemployed again. In part this is because many clients are 'bumping along the bottom of the labour market' which is a place of low paid, insecure work. In part it is because the help and support is not there to help them make progress in work through enhanced personal and technical skills and experience. In part it appears to be related to a crude 'job-first' approach - in other words helping a client to gain 'a-job-any-job' rather than helping clients to gain a job which actually fits their skills and needs, potentially offering security with further progression.

We recommend:

• A stronger focus on continuing to enable clients to stay in work - making progress where appropriate and possible - and become embedded in employment, even when serious health issues arise.

• A stronger emphasis on the quality and sustainability of the job gained and on the robustness of the work area involved.
• Support provided to clients who find work must offer opportunities to adapt but also acknowledge that not everyone will want - or need - continued support.

• The timing of follow up support needs to be carefully considered and is likely to vary from client to client

• The development of pilot long term contracts to follow and support clients for a significant period (ie into a job and beyond in terms of progress in work).

4 Developing smarter procurement approaches, with a strong focus on employment outcomes

The ways that services are delivered and procured to enhance an individual's employability are currently disjointed and dysfunctional. However, the ways in which this can be improved are well understood. In addition, the predominance of short term funding needs to be tackled: it generates short term thinking and a reluctance to invest in the future effectiveness of delivery on the part of organisations funded in this way. 'Building on New Deal' has the potential to be a powerful tool for effective procurement but it needs to incorporate the features set out below if it is to realise this potential.

We recommend that:

• Effective collaborative procurement will depend on creating national and local mechanisms for drawing together and combining the currently dispersed expenditure for employability.
• Procurement should be strongly based on the outcome of a client embedded in work.
• 'Work' should include any appropriate work outcome, which for some may include sheltered workshops and other opportunities where more conventional work is not a realistic destination. It should not, however, include substitute or surrogate activity (being 'parked' with no real progress towards work in prospect) and we must beware the implications for individuals with hidden potential of assuming anyone is 'unemployable'.
• Contract funding should take into account:

• The length of time it may take for a client to get from engagement to being successfully embedded in work
• The frequent need to sub-contract to specialist providers
• The need for a relatively long contract period to allow a contractor to develop effective engagement and aftercare approaches, to keep and develop good staff and to learn and apply lessons from practice and to devote management time to delivery not funding
• The legal necessities of handling leases on premises
• The time required to cover set-up costs, including systems development
• The need for greater flexibility to create individualised solutions

• Contracts should specify the client group and the volume of successful outcomes to be achieved (based on market intelligence)

• Although spending may be prioritised by age or stage, programmes should be designed to respond to specific needs to enhance the flexibility of their use.

• Contracts should not specify how the outcome should be achieved in order to maximise the scope for local flexibility and innovation, as well as localisation or variation for individual clients.

• Emphasis should be placed on the quality of the relationship between procurer and provider. A mature procurement relationship will involve trust and continuing learning about process effectiveness and adjustment of contract terms to drive up quality and impact.
• Exceptionally, where the service is not yet fully developed (especially for the most disadvantaged clients), procurers and contractors should agree on some process-based contracts to drive up quality and develop the service components.

• The significance of effectivecontract management of services should be fully recognised, with skilled and well trained staff working with clear objectives and demanding performance indicators.
• There should be robust responses to poor performance based on accurate comparators of expectations and negotiated local targets. Funders should be clear that their loyalty should be to clients not to providers.
• The performance of all providers should be publicly (and easily) available and easy to use in terms of client group, outcomes achieved and cost.
• Performance indicators should include systematic feedback (on accessibility, relevance, quality, making a difference) from both individuals and employers.

Finally, the evidence shows that it is beneficial to help clients to see the removal of specific barriers as part of a progression to meaningful, fulfilling work. This means that it makes sense for employment services to be able to sub-contract to specialist services where these services are needed to help a client make progress. So we recommend:

• That the Scottish Executive and Jobcentre Plus explore ways of achieving a viable and productive working relationship between employment services and specialist services through both their funding and contracting processes. Specifically, this could include financial incentives to encourage specialist service providers to refer their clients to employment services (eg through a share of eventual outcome payments).

5 Investing in the capacity of services

Services will only be as good as the organisations and people delivering them. So there is a need to invest in great organisations and great people, but also to ensure that those which are failing clients improve their performance rapidly or are no longer used as providers (see 'Developing an infrastructure of quality providers' on page 38). Currently there are examples of poor performance but the lack of usable performance benchmarks, and local loyalty to organisations rather than clients, mean that too many clients are being failed. Enhanced capacity and performance needs to be built on evidence: high performance, the reasons for it and the elements of it that can be transferred to other organisations; innovation and its evaluation and scaling up; skills and their strengthening; systems and their use and effectiveness. We recommend:

• Investment in building the capacity of the service throughjoint staff development and driving up the quality of local labour market intermediaries.
• Investment in systems and structures to support the work of these organisations and their services, including the creation of common in-the-round assessment approaches, the development of web-based service mapping to ensure effective local referral, and investing in systems for sharing intelligence about client needs and progress between agencies involved in enhancing employability.
• The development of clear, transparent performance benchmarks with organisations in the field, focusing on the key elements of performance to help providers and suppliers be clearer about the levels of performance that are expected of them.

• The creation of a small support unit for the Employability Framework with dedicated staff focused on enhancing performance. They would do this through the identification, sharing and spread of good practice, the monitoring of performance and the development of effective forms of management information, the creation of performance benchmarks, and the promotion and use of systematic qualitative information from individual clients and their employers.

6 Early intervention and job retention

Any approach to employability needs to ensure intervention occurs at the earliest possible moment to avoid job loss or enhanced risks of long term unemployment with all the additional costs (financial and personal) that this can incur. In practice this means that:

• The potential role of key institutions where people spend time (such as schools, prisons and hospitals) in enhancing employability is fully realised
• Those at risk of sustained unemployment are quickly identified and supported.
• Those at risk of losing employment through health related issues gain the support and vocational rehabilitation they need to maintain employment.

The significance of early intervention cannot be exaggerated. There is evidence that the investments that bring the greatest return in terms of employability are those designed to ensure sustained employment and strengthen employability rather than tackling unemployment once it has occurred. The consistently highest areas of risk, where most people slip from inclusion to exclusion, are the points of transition - for example, from school to work or college, from university to independence, from prison to release, from hospital to home, from homelessness to settled accommodation. Once in work, employees are vulnerable where they face health issues that may lead to long term or problem sickness absence. Many of these transitions are not coherently or actively managed and there are weak and patchy systems for the retention of those in work who face issues of ill health.

We therefore recommend that:

• More coherent and connected school-work transitions are developed in each area to reduce the flow of young people into unemployment and identify young people who are likely to find it difficult to find and keep work.
• The enterprise focus of Determined to Succeed in Scotland's secondary schools should be placed within the wider context of employability, specifically in terms of employer's emphasis on soft skills.
• Jobcentre Plus should apply the learning from its early intervention pilots (ways of identifying those at risk of long term unemployment) for more widespread application in Scotland.
• Cooperation between Jobcentre Plus and the Scottish Prison Service to deliver a coherent and effective employability service should be further encouraged.

• The development of more effective workplace-based job retention services and the promotion of active engagement with these services by employers.