Learning from what works: How Mayoral Combined Authorities are tackling long-term unemployment

Posted on: 4 December 2020 by Sue Jarvis in Blog

In this blog, Heseltine Institute Co-Director Sue Jarvis, considers how Mayoral Combined Authorities are tackling long-term unemployment.

One of the headline announcements from last week’s Spending Review was a new 3-year £2.9 billion Restart programme to provide intensive and tailored support to over 1 million unemployed people as part of a wider package of employment and skills measures. Whilst the Chancellor’s announcement is to be welcomed, questions remain on how a large-scale national offer of support for the long-term unemployed will play out at the local level, not least because to be effective interventions must align with local services that the unemployed rely on and be integrated where cross cutting support is required.

The Spending Review did not specify how Government will engage and work with devolved authorities in England, including Mayoral Combined Authorities (MCAs). However, strategic leadership of employment and skills is an important policy priority for MCAs and an area where many have secured devolved powers and funding to support groups of people back into work.

Having recently undertaken a what works review of employment innovation pilots in five MCA areas (Greater Manchester’s devolved Work and Health Programme - Working Well; Liverpool City Region’s Households into Work; Tees Valley’s Routes to Work; West of England’s Future Bright; and Connecting Communities in the West Midlands) plus London’s locally commissioned Work and Health Programme, I believe there are four key lessons to inform the Department for Work and Pension’s approach to the design and delivery of the Restart programme.

Proximity matters

Firstly, proximity matters. MCAs are closer to, and have a better understanding of, local labour market challenges/needs/opportunities and so can design and deliver programmes that make sense for the communities they serve. In all cases, the MCA pilots used their local knowledge and experience of previous employment programmes to design a distinctive package of support to address perceived gaps in mainstream employment programmes, meet employer needs and importantly, ensure this activity was aligned with other place-based services such as health and well-being, housing and skills. In comparison, the large contracting footprints used for national employment programmes make integration and local prioritisation difficult, can result in capacity issues for providers covering large spatial areas and are a missed opportunity to use existing local resources and networks to augment the long-term unemployed offer. The nuanced and granular approach to delivery evident from the MCA employment pilots was credited with optimising programme performance and generating wider benefits including access to additional local match funding to enhance the programme’s offer and reach.

Flexible and responsive provision

Secondly, having devolved governance arrangements meant the pilots could operate flexibly and were responsive to the changing needs of individuals with complex needs as well as to the needs of local employers. Most MCA pilots adopted a flexible, person-centred approach to take account and respond to the multiple employment barriers that many people faced, ranging from skills assessment, community engagement, debt and finance advice, mental health support, drugs and alcohol and housing services. They also provided access to “wrap-around” support to ensure individuals got the best from their involvement in the programme and some provided a flexible fund to facilitate access to tailored employment and in-work support for up to 12 months. In comparison, nationally commissioned or silo based service models are less able to offer a programme of personalised and holistic support and can be ineffective as they often fail to adequately address the issues that stem from people’s complex needs.

Being adaptable and fluid meant jobseekers were able to move from one support offer to another without having to repeat or start an assessment again from the beginning. This approach also provided a safety net for more vulnerable clients, enabling them to re-engage quickly if circumstances changed due to personal barriers/challenges taking priority over job search activity. In addition, the operational flexibility enabled MCA programmes to flex their delivery offer in response to the COVID-19 pandemic and changing labour market circumstances. Liverpool City Region’s Households into Work programme, for example, was able to mobilise a new delivery option to help clients deal with the challenges of the COVID-19 pandemic within a matter of weeks, which proved to be a crucial and timely intervention. Acting at pace to reshape service provision would have been more difficult to achieve if the programme had been part of a centralised and more restrictive contracting model.

Locally connected and integrated

Thirdly, the MCA pilots were locally connected and integrated with other programmes in their area. All of the MCAs and the four sub-regional partnerships in London had involved their constituent local authorities in the design, delivery and performance management of these employment programmes. This ensured local accountability and buy-in and helped to embed the pilot locally, achieving integration with local support services. For example, in Greater Manchester the Working Well programme meets an individual’s employment needs by drawing on the resources across Greater Manchester’s support ecosystem (such as skills providers, community health specialists) to offer an integrated approach. The use of co-location and outreach locations has helped to forge good relationships with external services while enhancing the offer for individuals accessing the programme. Similarly, the Connecting Communities programme has worked effectively with a range of partners, tailored to the needs of local communities in the West Midlands. This has included working with and through community organisations, Council services, libraries, places of worship, food banks and training/employment service sites – both to reach participants and deliver wider support.

Return on investment

Finally, although too early in the lifecycle to quantify the return on investment for most pilots, evidence from the Working Well programme (2019 Annual Report) suggests that nearly two-thirds (£7.3m) of the cost base of the programme is accounted for by payments of client attachments and job outcomes. Most of the rest of the cost is associated with referrals of Working Well clients by the providers to external agencies. Whilst cash payments are not made to these agencies it is important to note that the support they provide is an important input to include in the Cost Benefit Analysis due the benefits of the support delivered. The benefits modelling found the core outcomes: increased employment, resulting in reduced worklessness and other benefit payments to government; improved skills levels, which contribute to increased earnings and commensurate tax receipts; and benefits to health partners from improved mental health and drug and alcohol dependency. The gross fiscal benefit of the programme after ten years is estimated to be £17.5 million, with the gross fiscal return over the ten years modelling period being 1:1.31, indicating that for every £1 invested, an estimated £1.31 in fiscal savings will be generated.

Operating on a much smaller scale to the Working Well programme and focused on people in precarious employment, West of England’s Future Bright programme recorded improvements for clients across a range of life issues, including health and wellbeing, with this factor alone contributing to a social return on investment of c.£400,000 (April 2018 - March 2019). In addition, median monthly wage increases of £613 were reported for 67 participants.

So what are the lessons for Government?

The issues highlighted in this blog are timely, for policy makers, service commissioners and practitioners engaged in labour activation programmes and public services, not least in terms of determining the right spatial level for service delivery. The economic impacts of COVID-19 risk widening inequalities across the UK and especially in those areas where there are high numbers of socially and economically vulnerable people. Those residents already seeking work prior to the pandemic now face increased competition for limited jobs and risk being pushed further away from the prospect of employment. Also, the kinds of jobs that often provide the first step on the ladder for those entering the labour market, or that “mop up” a lot of the unemployment that occurs during recessions (for example hospitality and retail) are those that are being hardest hit by the pandemic. MCAs with their distinctive place shaping role and focus on functional local labour markets are uniquely placed to lead complex employability programmes which are capable of aligning supply with demand. Investment in locally tailored solutions is crucial for an effective economic recovery and will contribute to the Government’s intentions to “level up” underperforming and left behind parts of the UK.