LEARNING AND WORK INSTITUTE

Local People : Local Growth

Local People: Local Growth

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Local People : Local Growth

LEARNING AND WORK INSTITUTE

About Learning and Work Institute On 1 January 2016, the National Institute of Adult Continuing Education (NIACE) and the Centre for Economic and Social Inclusion joined together to become Learning and Work Institute. Building on the expertise of both organisations, Learning and Work Institute strives for a fair society in which lifelong learning, support and work help people realise their ambitions and potential throughout life. We do this by researching what works, influencing policy and implementing new ways to improve people’s experiences of learning and employment.

About our Policy Solutions series Our Policy Solution series brings fresh thinking and new ideas to key challenges in public policy. We focus on issues where learning, skills and employment can help achieve inclusive economic growth, better educational outcomes, higher employment, improvements in productivity, better health and well-being, social inclusion, tolerance and cohesion, and community and citizen engagement. Our overall aim is to generate interest and debate in how public policy can be improved and how policy can be implemented to help deliver a more inclusive, fairer and successful society.

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LEARNING AND WORK INSTITUTE

Local People : Local Growth

Introduction Since 2012, we have been at the forefront of calls for Government to devolve more resource and responsibility to cities and local areas. We argue that local areas should have a leading role in building better learning, employment and skills services for people and employers, to help deliver full employment, improved productivity and a fairer society. Local People : Local Growth argues for a step-change in devolution and sets out how local areas could use these powers in practice. We identify five priority areas:

1. Local leadership: we have argued the £1.5bn Adult Education Budget should be devolved, with cities responsible for overseeing learning, skills and employment services to ensure they are integrated and co-ordinated, and tailored to local needs. 2. Full employment: employment boosted by co-commissioning new employment support programmes, enabling local areas to ensure integrated back-to-work support with a particular focus on people with health conditions and disabilities. 3. Life skills: all adults to have achieved key life skills by 2030, through a new Citizens’ Curriculum, doubling efforts to improve functional literacy and numeracy. 4. Apprenticeships: local responsibility for raising apprenticeship numbers and quality, by working with local employers and training providers. 5. Low pay and productivity: boosting demand for Advanced Learner Loans to increase intermediate skills and building a Career Advancement Service for low paid workers. Local areas should share in the extra revenue that boosting progression brings.

The size of the prize is huge: our analysis shows that within existing resources local areas could help an extra 250,000 people into work, £200 million boost to earnings and the economy, and help the Government meet its target of 3 million apprenticeships by 2020. Local leadership has the power to ensure learning, employment and skills services work for people, employers and the local economy. 

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Local People : Local Growth

LEARNING AND WORK INSTITUTE

Priority 1

Local leadership People’s lives are complex and diverse, and local economies differ across the UK. So achieving fairer and more prosperous local areas requires a range of services to work together and tailor support – a one size fits all approach doesn’t work. We believe that cities and local areas are often best placed to integrate support, tailor it to local circumstance and deliver better outcomes and value for money. Adult Skills Funding by Local Enterprise Partnership (for more information see table on page 5)

25 34

7

39

19

22

20

3

32

8

12

14

6

1

36

18

28

15

21

38 31 11

27 35

37 33

5

24

17

2

16

13

26

23 10

30 4

9 29

Our devolution ask We argue that cities and local areas should have a formal role in overseeing learning, skills and employment services as a whole. This could include services reporting their overall performance and how they are integrating with other support to their Local Enterprise Partnerships (LEP) or combined authority. We have long argued for the £1.5bn Adult Education Budget to be devolved to cities and local areas. This should be underpinned by Government reaching Outcome Agreements with local areas, showing the increased employment and productivity that local areas will deliver through devolution. These could be modelled on Canada’s Labour Market Development Agreements, and set out a path to further devolution. In addition, cities and local areas should also have a role in co-commissioning and overseeing employment services, with more detail in Priority 2. 4

LEARNING AND WORK INSTITUTE

Local People : Local Growth

Adult Skills Funding by Local Enterprise Partnership (*not including apprenticeships, ESF, OLASS, AGE, 19+ discretionary support etc) Local Enterprise Partnership

2. Buckinghamshire Thames Valley 38. Worcestershire 7. Cumbria 26. Northamptonshire 11. Gloucestershire 33. Swindon and Wiltshire 5. Cornwall and Isles of Scilly 27. Oxfordshire 39. York, North Yorkshire and East Riding 35. Thames Valley Berkshire 3. Cheshire and Warrington 9. Dorset 36. The Marches 32. Stoke-on-Trent and Staffordshire 34. Tees Valley 6. Coventry and Warwickshire 14. Greater Lincolnshire 24. New Anglia 17. Hertfordshire 18. Humber 31. South East Midlands 10. Enterprise M3 13. Greater Cambridge and Greater Peterborough 21. Leicester and Leicestershire 1. Black Country 16. Heart of the South West 19. Lancashire 29. Solent 4. Coast to Capital 22. Liverpool City Region 37. West of England 20. Leeds City Region 12. Greater Birmingham and Solihull 8. D2N2 30. South East 15. Greater Manchester 25. North Eastern 28. Sheffield City Region 23. London

£10-30m

£30-50m

£50-70m

£70-100m

£100m-150m

£150m-200m £400-500m

Sources: Skills Funding Agency Allocations 2015/16 (September 2015) and Skills Funding Agency Allocations 2014/15 (May 2015)

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Local People : Local Growth

LEARNING AND WORK INSTITUTE

Priority 2

Full employment There are now more people in work than at any point in the past, with 73.9% of the ‘working age’ population in work. However, underneath this headline, employment is far lower for some groups and large gaps persist for the most disadvantaged. The government has set an ambitious goal to halve the gap in employment between disabled people and the population as a whole, which currently stands at over 30 percentage points. We support this aim and believe it can only be achieved through supporting larger numbers of Employment and Support Allowance claimants and radical reforms to how organisations work together. This will be even more important given significant future reductions in the funding of employment programmes. Most of those out of work and on benefit have a health condition or disability, and are less likely to find work through current programmes. Total claimants of out-of-work benefits Incapacity benefits

Lone parent benefits

Unemployment benefits

Job outcomes as a proportion of referrals by participant characterics (Dec 2015) 26.3%

Men

6,000

27.4%

Women

16.6%

Disabled people

5,000

35.1%

Lone parents

4,000

26.8%

Ethnicity: White

28.1%

Ethnicity: BAME

3,000

34.2%

Age: 18-24

2,000

26.6%

Age: 25-49

17.9%

Age: 50+

1,000

27.0%

London

0 1979

1985

1991

1997

2003

2009

2015

0%

5%

10%

15%

20%

25%

30%

Learning and Work Institute analysis of ONS (Crown copyright) data

Our devolution ask The new Work and Health Programme, announced at the Spending Review, should be co-designed with local areas. Local areas should be able to influence its design and commissioning to integrate and align other provision alongside it – including health, social care, skills and European Social Fund support. The recent Growth Deal for Greater Manchester will lead to a fuller and deeper joint commissioning of their Work and Health Programme, with aligned budgets and an integrated approach. We welcome this innovation, which is in line with what we called for in our ‘Fit for Purpose’ report in 2014. We would like this approach extended to other areas that have the capacity and capability to deliver. We should also be incentivising local areas to do more for disadvantaged claimants and where they are successful they should share in the financial benefits. We are also calling for a ‘What Works Centre’ for employment to be established – alongside the proposed Work and Health innovation fund, to support and enable local areas to learn, innovate and test new approaches to support those furthest from work. 6

35%

40%

LEARNING AND WORK INSTITUTE

Local People : Local Growth

Priority 3

Life skills Over five million adults lack functional literacy and numeracy skills, and 11 million don’t have basic digital skills. This restricts career and job opportunities, it reduces business success by limiting the skills base needed, and damages society by limiting active participation and access to public services that are increasingly digital-by-default. Across England, around £230m was spent on improving literacy and numeracy for adults in 2014/15. But the proportion of adults lacking these essential life skills saw little change compared to ten years ago. Even at the current rate of enrolment in learning, it would take 20 years to support all the adults that would benefit from help.

Our devolution ask We need a new approach, focused on genuine improvements in people’s capabilities rather than primarily on qualifications, and focusing on outcomes that people want and need to achieve. Local areas should invest in a Citizens’ Curriculum to ensure that people gain essential life skills - including literacy, numeracy, language, digital, financial, health and citizenship. The Citizens’ Curriculum: Impact NIACE worked with 13 organisations to pilot the Citizen’s Curriculum. Over 160 learners took part.

59% 48% more positive about numeracy

35%

better able to access support and information about health

more positive about literacy

35% improved confidence to access public services online

92% more motivated to progress to other learning

55% improved confidence to manage money

53% more motivated to look for work

87% increased self-esteem

Rochdale Borough Council used their pilot to engage local residents of the individuals and families in the target group...

100% registered with a dentist

67% accessed drug and alcohol support

14% reduction in incidents of domestic abuse

% 9 5 improved ability to use local services

We want to see a commitment to ensure everyone has these skills by 2030. Based on current course enrolment rates, this would require doubling current investment in adult literacy and numeracy. This could be achieved by aligning funding from the devolved Adult Education Budget with European Social Fund investment and other local services. It could boost employment by around 250,000, based on studies showing the increased likelihood of being in work as a result of having basic skills and the additional 2.5m people that would gain these skills by doubling enrolment rates in such training. 7

Local People : Local Growth

LEARNING AND WORK INSTITUTE

Priority 4

Apprenticeships Apprenticeships are a great way for people to build a career and employers to find the skills they need. To capitalise on their benefits, the Government has committed to creating 3 million apprenticeships by 2020 and is establishing an Apprenticeship Levy on employers to pay for this expansion. This is an ambitious expansion of apprenticeships and will require a big shake up in how they’re delivered. The Government’s target of 3 million can be delivered by increasing apprenticeships within sectors and regions where it is lowest. Currently, apprenticeship take-up varies significantly by local authority and LEP. Raising take-up in all areas to that of the highest would deliver 4 million apprentices by 2020. Raising apprenticeship starts in all areas to the levels of the highest performing LEP area - York and North Yorkshire - would deliver 4 million apprentices by 2020

250,000 apprentices

2.2m

3.0m

4.0m

Current trends

Government target

If we match performance of York and North Yorkshire

Our devolution ask Cities and local areas should commit to boosting apprenticeship numbers by: taking on more apprentices in their workforce; requiring contractors to take on apprenticeships through public procurement clauses; and working with local employers to encourage take-up. The quality of apprenticeships is at least as important as their quantity. We have argued for and are now piloting an Apprentice Charter, a quality mark co-designed by employers and apprentices. This will set out the key features of a quality apprenticeship, such as a mentor from another part of the business, work shadowing in different roles, and employment and earnings outcomes once an apprenticeship is complete. Traineeships are a critical pathway to apprenticeships and crucial in helping Government meet its ambitious target. We have worked closely with a number of Local Enterprise Partnerships, using the traineeships programme to get more young people in to careers locally through a sector-based approach. These pilots, in Science, Technology, Engineering and Mathematics, have demonstrated the critical role that traineeships can make in reducing the number of young people Not in Education, Employment or Training, whilst also filling key skills gaps in the local economy. We are keen to work with more local areas to unlock these benefits. 8

LEARNING AND WORK INSTITUTE

Local People : Local Growth

Priority 5

Low pay and productivity Five million adults are in low paid work, one million more than the OECD average and three in four people in low paid work ten years ago are still low paid today. This is in part a consequence of low productivity: our output per hour is 31% lower than in the US. The proportion of people in low paid work varies across the country, and as the graph shows, within regions. It also varies significantly by group (young people and part-time workers are far more likely to be low paid) and sector (both low pay and low productivity are more prevalent in retail and hospitality for example). Prevelance of low pay by region and core city All employees

Region

City

30%

25%

20%

15%

10%

5%

London

South East

East

Bristol

South West

Newcastle

North East

Manchester

North West

Leeds

Yorkshire & the Humber

Birmingham

West Midlands

Nottingham

East Midlands

All employees

0%

Resolution Foundation analysis of ASHE 2014, ONS Crown Copyright. Produced with kind permission from Resolution Foundation

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Local People : Local Growth

LEARNING AND WORK INSTITUTE

Low pay and productivity

Under Universal Credit, more people in low paid work will be required to undertake activity to increase their earnings. Evidence on what works in supporting them to do this is currently limited. Evidence clearly shows that skills acquisition and use can help to boost productivity and progression from low pay. Yet the UK is 24th out of 33 OECD countries for intermediate skills. People aged 24 and over have access to Advanced Learner Loans for learning at this level, soon to be extended to people aged 19 and over. However, the system has so far fallen short of expectations, with £250m of potential learning opportunities lost in 2014/15 alone. Increasing take-up and use of intermediate skills and Advanced Learner Loans could therefore be a key element of support for people in low paid work and in receipt of Universal Credit. This will require work with employers to ensure learning meets their needs and improves productivity, and with individuals to support them to translate their learning into greater earning and career progression.

Our devolution ask a. Increasing demand for intermediate skills. We think cities and local areas should have a lead role in driving up demand for Advanced Learner Loans and supporting individuals and employers to translate this learning into higher pay and productivity. At present the Government estimates that 50% of the money loaned to people through Advanced Learning Loans will not be repaid, mostly because learners will not earn enough money after their course to do so. Cities and local areas should be able to keep a share of the increased revenue if they are able to boost repayment rates above this level by helping people progress and employers grow. b. Building a Career Advancement Service. Cities and local areas should work with colleges and providers to build a Career Advancement Service using their devolved skills budget and to support in-work Universal Credit claimants. This would involve providing a Career Coach and wraparound support for learners, helping them to convert their learning into greater earning. In practice, this could involve including earnings progression as a key measure in outcome agreements, and designing structured pilots with employers and providers. Learning and Work Institute’s Ambition London pilot will trial new ways of increasing take-up of Advanced Learner Loans and working with employers and individuals to ensure this drives growth in productivity and earnings. Based on the increased earnings that participants in successful US trials of advancement support gained, and assuming that over the next five years 500,000 low paid workers participate in the scheme, this could boost total earnings and the economy by around £200m per year. 10

LEARNING AND WORK INSTITUTE

Local People : Local Growth

Learning and Work Institute can support local areas We have a long track record of supporting local areas to develop learning, skills and employment interventions, as well as monitor and maximise performance of employment services, including: first. We have mapped local authority services for the Local • Customers Government Association, and the impact of welfare reform for individual areas such as Brighton. on outcomes. We have longstanding experience in evaluating programmes, • Focus such as the implementation of the Work Programme, the SFA Innovation Code and London’s ESF programme. We have proposed practical changes to how the success of apprenticeships and employment programmes are measured to focus more on how they improve people’s job and career prospects market information. Learning and Work Institute provides local labour • Labour market information analysis, allowing local areas to map their jobs and skills needs. This includes running the London Employment and Skills Observatory. works and programme design. We are experts in understanding • What what works and how effective labour market programmes are designed and commissioned. This has recently included detailed work for the Republic of Ireland’s new national programme for the long-term unemployed. We also have extensive experience in supporting local areas to get people out of unemployment and into better jobs: access to apprenticeships. We trained 200 Jobcentre Plus Work Coaches • toWidening help the Government hit its target of 20,000 referrals to traineeships in 2014/15. Progression Pathways. We have worked with a number of • Developing local authorities and LEPs to increase take-up of traineeships as a route to apprenticeships to meet skills gaps. take-up by linking employers and providers. We worked with • Increasing the Humber LEP to engage employers and training providers in how to increase take-up of traineeships in STEM sectors.

With our flagship projects, we have been working with local areas and organisations to support people to develop basic skills for the 21st century, improve the quality of apprenticeships and help move people into employment, and to progress in the workplace. If you are keen to find out more please contact [email protected] 11

Local People : Local Growth

Patron: HRH The Princess Royal President: Nick Stuart Chair of Company Board: Maggie Galliers Chief Executive: David Hughes A company limited by guarantee Registered no. 2603322 Registered charity no. 1002775 Registered office: 21 De Montfort Street, Leicester, LE1 7GE

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