Youth Employment Scotland Fund (YESF): evaluation report

Executive Summary

The Youth Employment Scotland Fund

In August 2015, ekosgen was commissioned by the Scottish Government to evaluate the Youth Employment Scotland Fund ( YESF) and assess its impacts on young people and employers, including the extent to which it achieved its objective of creating sustained employment.

The YESF was a Scottish Government and European Social Fund ( ESF) funded programme that provided a package of support of up to £25m to deliver a wage incentive type of Employer Recruitment Incentive ( ERI) in order to support up to 10,000 young people into jobs across Scotland. Funding was initially available for job starts up to 31 ^st December 2014. When the ESF element ended after two years, the YESF was extended by another year to 30 ^th June 2015 with co-investment from Local Authorities.

Delivered at a Local Authority level, the YESF aimed to support the Scottish Government's commitment to help unemployed 16-24 year olds (extended to 29 year olds in August 2014) into work, and build on local and national measures that provide education and training to prepare young people for employment. It was introduced in response to the high youth unemployment resulting from the economic downturn, recognising that in this period, simply being young was a significant barrier to employment. The evidence from the Federation of Small Businesses ( FSB) report 'Bridging the Gap' suggested that employers viewed recruitment incentives as important in overcoming barriers that employers faced to recruiting young people.

The YESF was delivered by Local Authorities and supported employers in the private and social enterprise sectors to take on a young person aged 16-29 years (originally 16-24, extended to 29 in August 2014). Following changes in the criteria after the first three months, it also supported Local Authorities to employ vulnerable young people, Modern Apprentices and graduates with the aim of moving them in to private sector employment. Employers were provided with a wage incentive ERI which covered half the salary costs of a young person in a job (based on the appropriate National Minimum Wage).

It was based on the premise that all jobs created by employers were to be additional and permanent. Any references in the report that suggest that either the young person or the employer did not see the period of the ERI as a permanent job may reflect some misperception and miscommunication between Local Authorities and beneficiaries.

Study methods

The study team used a mix of methods to evaluate the YESF. We gathered monitoring data from all 32 Local Authorities to assess progress against local and national targets. We requested data on the number of starts and any more detailed data that may have been gathered locally about the characteristics of the participating young people.

We focused on 12 Local Authorities for more in-depth qualitative research. This looked at setting up and delivering the fund, alignment and strategic fit and key learning points. We also gathered contact details for employers and young people in those areas. Using these contact details, we carried out a telephone survey of 40 young people who had participated in YESF and supplemented this with an on-line survey of a further 74 young people. This means that survey information was gathered from a total of 114 young people across 20 Local Authority areas representing just over 1% of the total jobs provided through YESF. Whilst it is a small percentage, the total number of 114 young people is adequate to give robust findings as part of a mixed methods approach. We also set up and moderated an online discussion group using the Liveminds platform.

As agreed with the Scottish Government and within the scope of the budget and timescale, 50 employers were interviewed by telephone and a further 133 employers completed an online survey. We also carried out interviews with five employers and five young people to develop case studies and illustrate key findings, giving a total of 188 employers who participated in the evaluation. The case studies are anonymous and are based on self-reported information from employers and young people rather than on data provided by Local Authorities or others.

As another strand of the study, the researcher conducted a programme of consultations with operational and strategic stakeholders to explore the YESF's strategic fit, strengths, weaknesses and delivery. We also explored the key lessons for future programmes.

There were some methodological challenges with the evaluation but these were not insurmountable, and have had no impact on the robustness of the evaluation or the findings. The monitoring data across all the Local Authorities was not always gathered or presented consistently and so aggregating it was more difficult than expected. The final phase of the YESF was not complete at the time of the evaluation (it completed in December 2015) and so not all data sets provided to us captured the final outputs; for example, destinations of young people following completion and final beneficiary numbers. This means that final figures may be slightly higher than those reported here.

Outputs

The target was to provide up to 10,000 jobs for young people and at the time of writing, the Local Authority monitoring data showed that 9,396 young people had started a YESF job at the time of the evaluation although this figure may have increased following the end of the programme. The vast majority of young people who participated (98%) were aged 24 or below (reflecting the fact that the age range was only extended to 29 in August 2014) and they tended to live in the same Local Authority area in which they undertook their YESF job. No reasons were provided for why this might be the case. The non-completion rate was 14%, accounting for 1,286 young people. There was a range of reasons for non-completion including moving in to another positive destination before the end of the ERI but the most common reasons were that the contract was terminated because of poor time-keeping, bad attendance or the employer going out of business.

Value for Money

The evaluation did not include financial analysis as the data was not available for the evaluation. The study was conducted before the programme closed and so the financial data was not final.

Whilst there is no financial analysis, we know that Local Authorities absorbed the costs of set up, administration, compliance and delivery into existing budgets as no funding was available to cover these. This means that the YESF investment levered in significant additional resource however it has proved very difficult to place a figure on this given the variations in local delivery models. The YESF ERI enabled some employers to provide support to the young person with almost a third (30%) of employers in the survey indicating that they were able to provide training to the young person that would not have been possible without the ERI.

Additionality

Whilst the YESF was very clearly about additional job creation, some employers participating in the evaluation seemed to view it as a trial period even though the young person was given a permanent contract from the outset. This perception may mean that a clearer message was required to be given to employers.

Having said that, the evaluation shows that the YESF fund helped to create additional jobs for young people, and potentially sustained employment. The evaluation indicates that in some cases, this message may not have been fully understood by employers, although all young people were provided with permanent contracts. 69% of employers reported that they would not have provided the job without the YESF ERI. A further 15% said that the YESF brought recruitment forward (time additionality). Additionality was boosted by the existing relationships between Local Authorities and employers and the 'contracting' approach taken by some Local Authorities, where they developed contracts with employers, setting out terms and conditions stipulating that the job must be guaranteed and treated as a permanent job beyond the ERI.

The YESF enabled businesses to offer jobs and take on young people, when they otherwise wouldn't have; 69% of employers reported that they wouldn't have provided the job, or were unsure if they would have or not. Consequently there are now young people in long term sustainable employment that wouldn't otherwise be in a job, as a direct result of the YESF reducing the initial costs and the risk to employers.

Deadweight and displacement

Although there is some evidence of deadweight only 31% of respondent businesses would have taken on a young person without the YESF ERI, whilst for micro businesses, the ratio was lower at 28%. Also, over half of respondent employers reported that they had an existing vacancy to fill and took on a young person for the role. This figure is significantly less that the levels of deadweight reported in other employer recruitment incentives.

As reported above, over half of employers already had a vacancy to fill, some of which were created through Local Authorities brokering the opportunities on behalf of eligible young people. Various Local Authorities reported that some employers recruited a young person at entry level, whilst their original intention had been to recruit someone with experience therefore placed young people more prominently within the company's recruitment. However more than three quarters of respondents stated that taking on young people did not displace other potential employees.

Impacts

Young people

The YESF has been successful in providing jobs to young people across Scotland. At the time of the evaluation, 9,396 young people had started YESF jobs and this number may increase as the Fund reaches the end of its final phase.

Young people have benefited in a number of ways. They have developed hard skills related to their YESF job; they have gained qualifications, for example through MAs; they have gained and been able to demonstrate soft skills such as time-keeping, team-working and motivation; and they have improved their employment prospects and future career progression. Young people also reported that it had positively impacted on their confidence and career aspirations.

The key aim of the YESF was to overcome the disadvantage that young people faced in the labour market and to avoid the well documented life-long impact that periods of unemployment early in life will have on young people by helping support young people into sustained employment and the evidence clearly demonstrates that it has been successful in achieving this, with monitoring data showing that 64% of the young people who started YESF retained their employment at the end of the ERI. A further 5% moved on to another positive destination such as FE or training.

Employers

Employers have also benefited from providing YESF jobs. They were able to increase their capacity for the period of the ERI at a lower cost to the business; assess a young person's suitability for the role before committing to employing them permanently; bring in new, fresh ideas and attitudes to the business; and address the issue of an ageing and sometimes stagnating workforce. The YESF ERI encouraged some employers to recruit a young person in place of recruiting a more experienced worker, but in many cases they created a new post for the young person directly as a result of the financial support available.

Local Authorities

YESF has also brought benefits to the Local Authorities. The main benefit has been the volume of young people that they have been able to put through any type of employability scheme and into employment, therefore contributing to local strategic objectives on youth unemployment. There has also been an increase in and better engagement with employers which has enhanced their employability work, but also benefitted other functions such as economic development.

Employer Recruitment Incentives

There is overwhelming agreement across a range of partners that appropriately targeted ERIs are an appropriate response to tackle high levels of youth unemployment and an effective means of encouraging employers to provide jobs to young people with a view to maintaining sustained employment at the end of the ERI period. It reduces the risk to the employers but employers, Local Authorities and stakeholders believe that the value of the ERI is enhanced for some where pre-employment training is provided, for example through employability initiatives. Employers also noted that they may need additional support, including practical support to employ a targeted young person, for example someone with a disability.

Challenges

The YESF presented some challenges although there is no evidence to suggest that these detracted from the impacts over the life of the programme. Local Authorities with existing employability initiatives successfully integrated the YESF into the provision and tended to find it less challenging to implement the Fund than authorities with no existing provision.

Compliance was an issue, both for Local Authorities who found it to be resource-intensive, and for employers who were required to provide very detailed information to make a claim. Anecdotal evidence suggests that some employers recruited the young person but decided not to claim the ERI due to the compliance requirements. Again, this does not appear to have been a significant issue.

Some aspects of the guidance from the Scottish Government were open to interpretation which led to a degree of inconsistency between Local Authority areas. Whilst this was not necessarily an issue, and flexibility at local level was a deliberate feature of the Fund, it led to some confusion, particularly for employers and partners working in more than one area. It also meant that how, and the extent to which Local Authorities monitored the Fund and assessed the impacts varied, which was a challenge for the evaluation.

Despite eligibility rules and guidance there is evidence that in a small number of cases some of the young people supported by the YESF were already in a job or in a Modern Apprenticeship ( MA) scheme at a Local Authority (perhaps only having just started) and at that point, the job was converted to a YESF job to enable the employer to access the ERI. Where this occurred, the Local Authorities believed this met eligibility criteria, whilst in other areas, the Local Authorities did not consider young people already in employment to be eligible.

Despite these issues, on the whole the localised approach to delivery was a strength of the Fund. It allowed Local Authorities to align the YESF ERI with local employability activities and add significant value.

Recommendations

Although the YESF is coming to an end (at the time of writing) and delivery of Scotland's Employer Recruitment Incentive ( SERI) has commenced ^{[ 1]}, there are some recommendations for the Scottish Government and partners to consider for the future.

Recommendation 1: Communication. There should be clear, consistent and timely guidance at the start of the programme. Mechanisms for on-going communication should be reviewed regularly to ensure that important updates and messages are being effectively communicated and are reaching the target audience.

Recommendation 2: Coherence across partners. Funding partners must work closely together before launching a programme, and on an on-going basis to present a coherent offer to delivery partners that meets a minimum national standard but takes account of local initiatives and circumstance.

Recommendation 3: Marketing. Peer recruitment should be a key strand of a programme's engagement strategy, using case studies, advocacy and providing opinion leaders with information to help engage employers and young people. Social media campaigns are effective in engaging young people and reinforcing messages.

Recommendation 4: Monitoring. A monitoring and evaluation framework should be an integral part of a programme's development and agreed form the outset. This will mean that strategic and delivery partners are agreed and are clear on what will be collected, in what format and how and when it will be reported. This will ensure that progress, outcomes and impacts can be monitored and assessed and where necessary, adjustments made to maximise the efficacy of the programme.

Recommendation 5: Compliance. Where possible administration and compliance requirements should be as straightforward and consistent as funding regimes allow. The processes should take account of the nature, experience and capacity of the organisations that will have to complete the compliance process e.g. micro and small businesses can face particular challenges. Support is important to help employers address any issues of demonstrating compliance.

Recommendation 6: Setting targets. Targets should be set using evidence at local level where it is available e.g. on deliverability, capacity, economic context, existing employability activities and outputs of other/previous interventions.

Recommendation 7: Employer Recruitment Incentives. ERIs are effective in encouraging employers to provide jobs and sustained employment to young people. This approach should be an integral part of future employability programmes but against a backdrop of an improving youth labour market, should be focussed on those who are further from the labour market and optimised with pre-employability training, through and after-care. Flexibility should be built in on how the ERI can used to remove barriers to employing young people and should be specifically about the young person's needs.

Recommendation 8: Flexibility at local level. A positive feature of YESF is that National ERI programmes had the capacity to be delivered flexibly to respond to local need and circumstance but with clear guidance to ensure appropriate levels of consistency and compliance to programme criteria. This flexibility should be maintained.

Recommendation 9: Providing the jobs. Employers should be given clear guidance about the expectations and commitments required of them in providing a job. This should include what they are expected to provide to the young person during the ERI. Consideration should be given to this taking the form of a formal agreement between the employer and the Council. It would also set out what the Council is agreeing to provide for example, any additional support.

Recommendation 10: Support to employers. Some employers, particularly smaller ones, may benefit from practical support, for example help to find and recruit a suitable young person, assistance to prepare an induction programme and so forth. This type of support is available through Business Gateway and a selection of local on-line tools. Additional support could potentially be provided as an on-line resource at national level, with local flexibilities.

Recommendation 11: Targeted Young People. The Targeted ERI was available in conjunction with the YESF to provide support to employers to employ targeted groups of young people facing specific barriers to employment. However, the findings show that for some employers it did not fully meet their needs in terms of practical advice or they were not aware that it was available. Consideration should be given to ensuring that all additional support is promoted to employers. This could include signposting employers to external sources of advice and information.