In response to the pandemic, and in light of the community spirit exhibited by the British public during these difficult times, Danny Kruger MP laid out a series of policy proposals to the Prime Minister in his ‘Levelling up our communities’ September 2020 report. At the heart of these proposals are communities; Kruger highlights the regionally unequal reality of the United Kingdom and emphasises community power as the means to realign our economic and social model.
Kruger argues that the government “should do a deal with communities,” and create a “social covenant: a mutual commitment by citizens, civil society and the state, each to fulfil their discrete responsibilities and to work together for the common good of all.” As people have had to retreat into the local areas, now, more than ever, communities are needed to help us rebuild in the post-coronavirus world.
Central to Kruger’s proposals is the role of people, particularly young people who “face the greatest threat from the coming economic downturn.” He argues that, as part of the Opportunity Guarantee that the Prime Minister stated would be in place for all young people, the UK needs a programme that provides meaningful roles for young people to serve their local areas that will develop their skills and sense of public duty.
Kruger also highlights the need to expand the Kickstart scheme to include a programme that deploys 100,000 young people to work on a range of social and environmental projects, named Service Kickstart. Paid via the wider Kickstart scheme, these projects would work in collaboration with local authorities and businesses to help level up communities. The report lists examples of said projects: young people could go into local schools and help “children with mentoring, academic catch-up, sports or playtime.” Other examples include taking part in environmental and biodiversity development, helping out in hospitals and care homes, and restoring youth clubs and community centres. As emphasised by Kruger, the value of the programme would be threefold:
“It would directly help local communities and the environment. It would help individual young people gain the professional and interpersonal skills they will need for their careers, including a habit of service that should last the rest of their lives. And it would help bring our country together, as people from different backgrounds work collaboratively on social projects.”
Above all, Kruger states that this programme must be designed, implemented, and managed in close collaboration with young people with the expectation that “a new infrastructure of youth provision” would emerge. The NYC aims to be part of this new infrastructure.
Past Employment Intervention Schemes
Past schemes include the Futures Job Fund, the Work Programme, and the Creative Employment Programme. The current scheme, launched by Chancellor Rishi Sunak, is the Kickstart scheme.
In response to the massive post-lockdown unemployment crisis, Chancellor Rishi Sunak has devised ‘Kickstart Jobs’ which endeavours to help and support young adults, aged 16-24 years, into employment. The scheme provides government funding to employers to create 6-month job placements for young adults who are currently on Jobseeker’s Allowance and are at risk of long-term unemployment. A £2 billion pot is available to fund this scheme.
For each placement, the funding covers minimum wage for 25 hours a week, the employer National Insurance contributions, and employer minimum automatic enrolment contributions. Additional funding will be available to support young adults to build on their experience and assist them to secure sustained employment after completing the Kickstart scheme funded placement.
This is an admirable programme, but there are concerns about its implication in practical terms. The scheme could enable big corporations to have a portion of their payroll covered by the taxpayer, by simply rebranding existing roles for the scheme. Furthermore, there is the worry that a large section of school leavers and graduates, who will have been focused on applying for graduate schemes and building their CV’s rather than applying for Jobseeker’s Allowance, will be left out by this scheme. These are key issues that the NYC aim to solve.
The Creative Employment Programme
In response to youth unemployment and sector-specific entry access route concerns, the Creative Employment Programme (CEP) was an investment by Arts Council England of up to £15 million from 2013 to 2015. This investment intended to provide work, training, and support opportunities for young people aged 16-24 that have been disproportionately affected by unemployment levels.
This investment covered the creation of up to 6,500 new apprenticeship, traineeship, and paid internship opportunities for young adults. Arts and cultural employers within the Arts Council’s footprint were able to apply for funding towards the costs of employing new apprentices and paid interns.
In the London Job Market, 1 in 6 new jobs are now found within the creative economy which highlights the importance of investment in this sector. The CEP was a success in many ways, it leveraged entities to help young people find work and enabled businesses to expand their horizons regarding hiring creative apprentices and interns. For example, the CEP enabled the DWP to work with the arts sector and put in place a specific referral process to help young adults access opportunities available with the support of the CEP. With further sustained investment and government backing, more job opportunities could be created, and more young people can be helped.
The Work Programme (WP) was a UK government welfare-to-work scheme introduced in June 2011 by the 2010-2015 Coalition government. The WP was a government scheme focused on helping the long-term unemployed to find and retain jobs and move off benefits. The Work Programme has been the largest employment programme in the UK with 2 million referrals between 2011 and 2017.
In 2014, the National Audit Office (NAO) carried out a performance review of the WP. The NAO found that the WP was not performing to the levels expected of it, but that this was due in part to the unrealistic expectations of it. The review found that, after a slow start, the programme was performing at similar levels to previous programmes, like Labour’s Future Jobs Fund. Ultimately, the NAO review states that “if the Department can achieve the much higher rates of performance that it now expects for the remainder of the Programme, the Programme has the potential to offer value for money.”
An explanation for the underperformance of the WP compared with expectations is that it was underfunded, with the DWP spending only £1,290 per participant. Moreover, funding was distributed based on a ‘payment by results’ system, which often encouraged contractors to focus on participants who were easier to help. This neglected the participants who faced the most difficult barriers to employment, such as disabled people and people with mental health problems.
Last November, the Department for Work and Pensions (DWP) released a quantitative impact assessment of the final years of the WP. Its key finding was that the WP “had a number of features which align with the overall evidence base for providing effective employment provision.” But the report also confirmed the earlier findings that the programme provided insufficient support for those who had tougher barriers to employment.
The benefits, as well as the flaws and inefficiencies, of this programme provide a basis to learn and improve for the future, especially with regards to the NYC. Government-backed employment schemes require generous funding, especially given the paramount need to help people of all backgrounds and abilities.
Future Job Fund
The Future Job Fund (FJF) was a UK government initiative introduced in 2009. It was a budget of £1 billion set aside to create 150,000 jobs for young people who were receiving Jobseeker’s Allowance.
DWP produced a report in 2012 which evaluated the FJF. The report found that the scheme produced a net benefit through tax benefits and a reduced benefits bill. It produced a net benefit to society of approximately £7,750 per participant, an estimated net benefit to participants of £4,000 per participant, a net benefit to employers of approximately £6,850 per participant, and a net cost to the Exchequer of approximately £3,100 per participant.
These figures show the scheme to have been a relative success. There were also numerous case studies demonstrating the fund’s success, with many people finding and making use of opportunities.
However, the scheme was cut short a year early by the government in order to achieve savings of £290 million. The statistics shown in the DWP report show the tangible results of the fund. With sustained investment and higher ambition for the initiative, more jobs and opportunities can be created, an important lesson learnt for the future.
US RESPONSE TO YOUTH UNEMPLOYMENT
The US Department of Labor have employed several methods to deal with youth unemployment:
Job Corps is the largest and most comprehensive residential educational and job training program for 16-24 year olds in the US. It has a budget of $1.7 billion per year and provides free-of-charge training.
Private companies, state agencies, federal agencies, and unions recruit young people to participate in Job Corps, where they can train for and be placed in jobs.
Since its foundation in 1964, Job Corps has served more than 1.9 million young people and serves approximately 60,000 young people annually. In 2012, approximately 75% of Job Corps’ graduates were placed. The HUD evaluation report of Job Corps found that it had significant impacts on participants’ educational achievement and earnings, although it did not show an impact on employment rates. This shows that it may be more helpful for those wanting to progress within their careers, rather than helping the unemployed get their foot in the door.
YouthBuild is a non-profit organisation which provides construction education, training, and counselling to unemployed young people, primarily focusing on high school dropouts. YouthBuild programs provide at-risk young people aged 16-24 the opportunity to widen their opportunities by earning their high school diploma or state-recognised equivalency degree. The program combines hands-on-job training with time spent in the classroom.
There are 273 YouthBuild programs in the US, with a yearly total capacity of 10,000 students.
The YouthBuild program has 5 components: construction, education, counselling, leadership, and graduate opportunity. The benefit of the program is that it provides affordable housing for low-income families whilst training and educating young people who may have come from difficult situations.
The evaluation report provided by HUD concluded that participants showed limited improvement in employment rates, with only 36% of participants employed after leaving the program. It seems the program’s main intention is not to improve employment levels, rather it focuses on other factors such as housing, and education levels.
WIOA Youth Formula Programme
The Workforce Innovation and Opportunity Act (WIOA) of 2014 represented a comprehensive youth employment program for eligible youth, aged 14-24, facing barriers to education, training, and employment.
Funds for youth services are allocated to states and local areas based on a formula. The WIOA Youth Program focuses primarily on out-of-school youth, requiring local areas to expend a minimum of 75% of WIOA youth funds on them. The program includes 14 program elements that are required to be made available to youth participants. These include tutoring, paid and unpaid work experiences, occupational skills training, leadership development opportunities, and financial literacy education.
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