Fair Start Scotland: economic evaluation

Background

Background on Fair Start Scotland

In April 2018, the Scottish Government launched Fair Start Scotland, its first fully devolved service, built on Scottish Government values and principles of high-quality public services that are delivered with dignity and respect to individuals. Fair Start Scotland offers employability support as well as a range of other services to assist people based on their needs and circumstances related to finding and keeping a job. The services' aim is to reach out to and help people who are farther from the labour market.

Fair Start Scotland aims to take forward a uniquely Scottish approach to the delivery of employability services, including: a high-quality service that maximises delivery of real and sustained job outcomes for individuals, treating them with fairness, dignity and respect; a programme of service integration and alignment that seeks to join up public employability services; support for those farther removed from the labour market; voluntary participation, with people not driven to take part by fear of benefit sanctions; person-centred support not based on the type of benefit an individual receives; and national service standards providing a high-quality service and consistency of delivery across Scotland, meaning that no one is left without the support they need.

The Service aims to support individuals who have a disability or additional support need (with disability as defined in the Equality Act 2010), have been unemployed for a long time (those reaching 2 years on Job Seekers Allowance/ Universal Credit equivalent), or are currently in the Employment and Support Allowance Work Related Activity Group. It also aims to support people who have caring responsibilities, single parents, care leavers, minority ethnic communities, refugees, those with health problems, or persons with a conviction. It also aims to reach those who live in the 15% most deprived Scottish Index of Multiple Deprivation (SIMD) areas.

Providers can also make further specialist services available for participants who require more intense support. These include elements such as specialist support for specific physical or mental health conditions, for those recovering from substance misuse and support addressing barriers arising from convictions.

Fair Start Scotland received participants in 2018, 2019, and 2020. For performance management purposes, the service groups its participants into three categories, Core, Advanced, and Intense. The characteristic of each group is defined in Table 1.

Source: Fair Start Scotland business case.

Because of the complexity of individual circumstances, Fair Start Scotland is designed to take a long-term approach to people's needs, by increasing the length and intensity of the support. It is delivered across nine geographical areas (Lots) with the intention to customise the service according to each area's characteristics, while also ensuring it meets the national standard of service delivery. Service providers are financially rewarded when they support people to remain in work for 13 weeks within a 16-week period, 26 weeks within a 30-week period, and 52 weeks within a 60-week period.^[2] 30% of the contract value is paid as a service fee over a period of 48 months, with 70% paid based on the achievement of job outcomes. The proportion of total outcome fees is set at 15% for job outcome at 13 weeks, 35% for sustained job outcome at 26 weeks, and 50% for sustained job outcome at 52 weeks. Fees also differ based on participants' groups; providers are paid at a lesser rate for Core group than Advanced or Intense groups as detailed in Table 1.

Background on the economic evaluation

Alma Economics was commissioned by the Scottish Government to provide an independent evaluation of the delivery and outcomes of Fair Start Scotland that will be used to improve the effectiveness and efficiency of employability service provisions and to ensure that taxpayers receive value for money for these services. This economic evaluation relates to the first three years of the service, from April 2018 to March 2021.

The overall Fair Start Scotland evaluation includes three phases. This economic evaluation fits in Phase 2 of the overall evaluation, focusing on ongoing service delivery and participant outcomes. It will complement findings from Phase 1 on implementation and early delivery as well as set the stage for Phase 3 on the long-term outcomes and impact measures (to be published in 2022 at the earliest).

There are three broad objectives for this economic evaluation. The first is to understand the value for money of the service by comparing costs and benefits. This is accomplished by identifying and defining the costs and benefits of the Fair Start Scotland service over the delivery period both to the government and society; measuring and valuing the costs and benefits of the Fair Start Scotland service; comparing the realised costs and benefits of the service with the business case estimates; providing an assessment of the service's impact on the economy as a whole; and assessing the value for money of the service to the taxpayer.

The second objective is to understand the value for money of the service by employing wider measures. This includes estimating the average cost per job outcome and comparing this to other employability programmes; comparing the performance, cost-effectiveness, and efficiency of Fair Start Scotland to other employability programmes; and providing an assessment of how effective the service has been at meeting its strategic objectives as outlined in the business case.

The third and final objective is to understand the wider social impact of the service. This includes assessing wider social impacts through social cost-benefit analysis; assessing whether the service has contributed to inclusive growth and wellbeing ambitions; and considering the distributional impacts of the service including the impacts on particular groups supported by the service.

In order to meet these aims and objectives, the economic evaluation uses the latest Department for Work and Pensions (DWP) Social Cost Benefit Analysis (SCBA) model. This model provides a way of quantifying social impacts associated with the implementation of employment programmes in the UK. The model was developed to assess the cost effectiveness of labour market policies in fiscal terms, while also taking into account wider impacts on the economy and society in general.