Treasury and Resources
Ministerial Decision Report
Allocation of fiscal stimulus funding for advance to work (16 – 19) and new skills initiative for the 20+
1. Purpose of Report
This report summarises the recommendations from the FSSG to the Minister for Treasury and Resources in respect of additional funding for the Advance to Work scheme for 16 to 19 year olds to enable it to continue beyond August 2010, as well as the funding for a new skills and training initiative to support those aged 20+.
2. Background
The Advance to Work scheme for 16 to 19 year olds was established by the Department for Education, Sport and Culture (“ESC”) in the summer of 2009, enrolling its first participants in September 2009. The scheme was funded in the amount of £580,200, which enabled its operation for a maximum of 150 participants up until August 2010. ESC has put forward a request which demonstrates the achievements to date and requests additional funding to enable the scheme’s operation until September 2011, for a maximum of 175 participants.
Furthermore, the reported unemployment statistics have revealed a growing number of people actively seeking work in the 20 and over age group, particularly 20 – 25 year olds, and the length of time individuals are remaining unemployed is also growing. The lack of employment opportunities as a result of the economic downturn is evidenced in the number of vacancies at the end of April 2010, which was at a 10 year low. This gives rise to need to provide targeted training and guidance for those aged 20 and over who are not able to benefit from the Advance to Work scheme. ESC has together with the Skills Board, prepared a detailed bid submission to develop a new scheme which provides training and development opportunities for those aged 20 and above, on a short term basis aiming to get people into the available employment opportunities quickly.
Providing additional opportunities for training during an economic downturn should deliver long term economic benefits through a more highly educated and skilled workforce, as well as the stimulus benefits in the short term. This was recognised in the Proposition for the Economic Stimulus Plan (P55/2009), including the fact that any skills and training initiatives may are intended to provide longer term benefits despite potentially delivering weaker impacts initially than other types of project (such as construction or civil infrastructure projects).
3. Advance to Work for 16 to 19 year olds
In order to provide opportunities for individuals who in a different economic climate would probably have secured employment, additional funding was provided to ESC to enable the design and delivery of the Advance to Work scheme for 16 to 19 year olds until August 2010. Without this funding in the academic year 2009/2010 those young people may have been registered as actively seeking work for an extended period, making them longer term claimants of jobseeker allowance and potentially giving rise to other issues such as employability and self esteem.
This scheme is complemented by the other fiscal stimulus activities of the department, which includes additional full time places at Highlands College and a strengthened careers service with additional advisory capacity and other support.
Based on the data available on 20 May 2010, 172 young people had participated, or continue to participate, in the scheme, with 45 participants going on to obtain permanent paid employment, 26 of whom were offered paid employment with their Advance to Work placement employer.
This paper seeks green light approval for the funding of the Advance to Work scheme for 16 to 19 year olds from September 2010 to September 2011 as set out below, which will enable the scheme to increase it maximum number of participants to 175, in order to respond to the expected increase in demand arising when in September another cohort of 16 year olds leave school, together with leavers from Highlands.
| Year ended 31 December 2010 £ | Year ended 31 December 2011 £ | Total request for academic year 2010-2011 (13 months) £ |
Staff costs | 156,409 | 386,864 | 543,273 |
Supplies and services (includes training costs) |
78,750 |
151,250 |
230,000 |
Administrative expenses |
4,230 |
14,110 |
18,340 |
|
239,389 |
552,224 |
791,613 |
An increase in the number of temporary staff is also required to deliver the increased capacity and this is summarised in Section 4 below.
New training initiative targeted at those aged 20+
The scheme is intended to help unemployed adults (aged 20 and above) gain meaningful training and work experience to help them move into paid employment. The scheme will provide an integrated programme of training and mentor led support, with a focus on specific sectors where there are still job opportunities.
The proposal has been evaluated against the evaluation criteria set out for all fiscal stimulus projects and scores well against these. However, as with any new scheme there are assumptions about the number of participants which will not be known to be correct or incorrect until the scheme has been established and the individual courses planned. As such the FSSG is recommending to the Minister that funding is allocated to enable the project to be set up and operate as planned until December 2010 based on the cost estimates of ESC included in its bid as set out below. An increase in the number of temporary staff at ESC is also required and this is summarised in Section 4 below.
Later in 2010 the progress of the scheme will be reviewed and ESC will have the opportunity to request additional funding in the event that it is necessary.
| Year ended 31 December 2010 £ |
Staff costs | 68,488 |
Supplies and services (includes training costs) |
85,902 |
Administrative expenses |
20,610 |
|
175,000 |
4. Recommendation from the Fiscal Stimulus Steering Group
The Steering Group recommends that the Minister for Treasury and Resources allocates funding of £966,613 to the Department for Education, Sport and Culture (“ESC”) to enable delivery of the schemes. The budget allocation will be in the same amount and expected to arise across the financial years set out below.
| Year ended 31 December 2010 £ | Year ended 31 December 2011 £ | Total
£ |
Advance to work for 16 – 19 year olds |
239,389 |
552,224 |
791,613 |
New training initiative for those aged 20+ |
175,000 |
- |
175,000 |
Total |
414,389 |
552,224 |
966,613 |
ESC will also require the approval for further staff on a temporary basis as set out below. The Minister is recommended to approve the Education, Sport and Culture Department’s request to increase their established “business as usual” manpower for the two schemes as follows:
| Headcount | FTE | Dates |
Advance to work for 16 – 19 year olds1 |
17 |
15.25 | With effect from date of decision to 30 September 2011 |
New training initiative for those aged 20+ |
4 |
3.5 | With effect from date of decision to 31 December 2010 |
5. Reason for Decision
A discretionary fiscal stimulus allocation from the Stabilisation Fund of £44m has already been approved. The projects meet the key criteria for fiscal stimulus being timely, targeted and temporary. They will benefit local individuals and help achieve the third and fourth objectives of the fiscal stimulus; preparing the foundations for economic recovery through a more highly skilled workforce and achieving longer term economic benefits as well as fiscal stimulus benefits in the short term. The £966,613 allocation to the projects, together with the temporary manpower increase, will enable ESC to continue to help people of all ages improve their skills and gain qualifications during the recession when there are fewer employment opportunities available.
6. Resource Implications
No financial or manpower resource implications other than those explained above.
Report author : Acting Fiscal Stimulus Programme Manager | Document date : 9th June 2010 |
Quality Assurance / Review : Business Manager | File name and path: l:\treasury\sections\corporate finance\ministerial decisions\dss, wrs and sds\2010-0090 - fiscal stimulus allocation esc - skills & training initiatives - hmg\wr - fiscal stimulus funding esc for skills & training initiatives - slj.doc |
MD sponsor : Interim Treasurer of the States |
1 Note that total headcount and FTE numbers stated here includes the additional headcount and FTE already authorised and in effect until the end of December 2010 (which enabled the scheme to be established). The increased numbers here will be required with immediate effect to allow the scheme manager to appoint staff to gear the scheme up for an increased number of participants when appropriate.
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