Colleges, are you ready for the raising of the participation age?
Increasing the minimum age at which young people in England can leave education or training is an unsettling prospect.
No-one can predict with absolute certainty how the further education (FE) sector will adapt to the implementation of mandatory participation up to the age of 17 next year.
The Association of Colleges (AoC) held an event in Paddington last week to give advice on how FE colleges could attract more students during the recruitment period and prepare for increased competition from schools.
Julian Gravatt, assistant chief executive (research and development) at the AoC, said colleges should be preparing an offer which will differentiate themselves from rival learning providers.
“You need to devise an appropriate response, taking into account not only capacity, but also local need, who else is around and doing things and also what the available funds are – what is actually possible,” Mr Gravatt said.
Raising the participation age will mean that teenagers aged between 16 and 18 are required, by law, to undertake either 534 hours of full-time education, an apprenticeship, full-time work or volunteering supplemented with 280 hours of part-time education.
Under the reforms, colleges and schools will have a duty to monitor attendance and employers will need to ensure training is being delivered appropriately to the learner.
Mr Gravatt warned that the implementation of the policy could have a negative impact on the funding allocated for each student.
“After having several years of the 16-18 education budget going up and us as a sector using that very well, the way in which we will get increased numbers in the next few years is partly at the expense of making some quite significant cuts in terms of funding for students,” he said.
“It’s a policy with desirable ends but is coming in a financial environment which is difficult.”
Mr Gravatt said the reform was being used by government as a solution to youth unemployment and the number of people not in education, employment and training (NEET).
“Whatever the law says, or whatever policy used to say, whatever you do think or used to think, the number one issue is tackling youth unemployment,” he said.
“A college can either engage with that and do it well, or it may feel actually others will do it better. It’s a choice, but given the priority it’s an issue and you should see the full participation for 16-17 year-olds within that context at the moment.”
David Russell, director for participation and vocational education at the Department for Education (DfE), appeared to agree with Mr Gravatt and emphasised the government’s interest not only in tackling NEETs, but also those currently in jobs without training.
“We also know that a very small number of 16 and 17 year-olds in jobs without training, although there are a very small number of them, they only have marginally better outcomes in the long run than those who are NEET,” Mr Russell said.
“So we are almost as concerned about those in jobs without training.”
David Wood, principal and chief executive of Lancaster & Morecambe College, said raising the participation age was creating a great deal of fuss over a very small proportion of learners.
“Some of this seems to be much ado about nothing,” Mr Wood said.
“It’s a very small group of people which we are chasing and at one level EMA is being removed, the fees for higher education have gone up incredibly high, local authorities are losing their authority, academies are increasing competition. All those things seem to be challenging the ability to tackle this group head on.”
Mr Wood agreed however that competition from schools would continue to be a huge issue for FE colleges.
“I’ve got eight schools around me, for 11-18’s, who won’t let me in. The root of the NEET problem is in poor information and guidance I think,” he said.
“So even though we’ve got lots of people participating, a lot of them are in the wrong courses and we’ll pay for that through their lives.”
He added: “What I don’t want to be doing, is fighting other providers for those young people.
“What I see at the moment is a fair degree of anarchy and chaos about to emerge for a very small group of people.”
Jon Thorn, head of business development at the National Apprenticeship Service (NAS), added that apprenticeships shouldn’t be seen as a ‘one size fits all’ solution to the problem.
He said: “There’s always a risk around a programme which is doing well that it does become a solution for every problem or challenge that there might be.”
It’s a policy with desirable ends but is coming in a financial environment which is difficult.”
Corrienne Peasgood, deputy principal of City College Norwich, said simply creating more places for students won’t be enough to raise the level of participation either.
She said: “Between us, I really do believe that we can find enough opportunities for full participation at 16 and then later at 17, but is that enough? I don’t think we’re in the field of dreams territory, that we can be sure that if we build it, they can come.”
Raising the participation age is likely to cause some problems for the FE sector, but Fiona McMillan OBE, president of the AoC and principal of Bridgwater College, said it would help young people in the long run.
“We all know that not being in education or training beyond 16 means you are considerably more likely to experience being out of work, more likely to have a criminal record, more likely to suffer from low self-esteem and from bouts of depression,” she said.
“There are really strong social, personal and economic reasons for looking at extending the time that young people are in employment, and in training, and are gaining qualifications and valuable experience.”
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McDonald’s has pocketed £10million of public money for an apprenticeship scheme …but has not created a single new job with it.
Instead, the multi-national fast-food giant has spent the whole sum on “career progression” for 18,000 existing staff.
A Sunday Mirror investigation has found that among nine other major firms which take the most money from the scheme, £20million has been spent to create just 2,559 new jobs.
With unemployment hitting 2.67million PM David Cameron has pushed apprenticeships as a way to get young people back into work. In July he revamped the Skills Funding Agency to work directly with employers and recently said: “Apprenticeships are at the heart of the kind of economy we want to build: one where many more young people have the chance to learn a proper trade.”
Taxpayers have so far paid out £30,934,034 to create jobs which cost £12,088 each. But anyone on an apprentice’s minimum wage takes home just £5,200 a year.
Shadow Work and Pensions Secretary Liam Byrne said: “When a multi-billion pound company takes millions from taxpayers and doesn’t create a single new job, then you know the government’s back to work schemes are descending into chaos.
“The Sunday Mirror has shown the Government has big questions to answer. The Tories slashed Labour’s successful Future Jobs Fund. Now long-term youth unemployment has doubled and we have a million young unemployed. We want to know why more apprenticeships aren’t being created for all this money.”
A McDonald’s spokesman said: “Our apprenticeships’ scheme is about supporting and enabling career progression, not job creation. Since we started our apprenticeships programme, 11,000 employees have completed it and a further 7,000 employees are currently studying towards the qualification.
“We invest £36million every year in training. Like many UK employers, we receive some government funding in addition to our own investment, which enables us to adapt our training into nationally recognised, transferable qualifications.”
She said the firm hoped to create 2,500 new jobs this year.
Latest figures show 1.04 million 16-24-year-olds are unemployed, the highest number since 1986.
This week Mr Cameron claimed firms had offered more than 5,500 new apprenticeships since the start of the year.
However, new data shows the top 10 companies to receive money from the Skills Funding Agency shared a total of £30,934,034 to create just 2,559 new positions. Under the terms of the funding, companies are able to spend some of the money on retraining existing staff.
Phones4U said it had spent its share of the public money on “upskilling”. A spokesman said: “In the past year, we have trained and upskilled over 2,700 of our 5,000 employees.”
A spokesman for BAe Systems said each apprentice, which costs the taxpayer an average £10,555, had a further £90,000 invested in them by the company itself.
Tesco would not say how many apprentices they employed.
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Professionalising welfare-to-work is important
Historically the welfare-to-work industry, which employs in the region of 20,000 people, has had no occupational standards or designated Sector Skills Council, no required entry qualifications or recognised professional qualifications. Very little of the training for the employability sector’s workforce that has been delivered has been externally accredited.
Various pieces of research highlighted the need to improve the industry’s approach to training and developing its people. It was recognised that the ability of welfare to work providers in the independent and college sectors to attract and retain the best people, who were able to work at a confident and competent level, providing personalised and expert support was going to be critical to the success of the Work Programme. To achieve this, it was vital that the status of practitioners such as the personal advisor role was enhanced through the provision of a framework of professional qualifications and clear career pathways.
In 2010 the sector agreed to address what professional standards and qualifications were required within a flexible framework, which focused on improved productivity, reduced attrition and the attraction of high calibre people into the sector. Sector employers came together to create the PoWER (Professionalisation of Welfare to Work Expert Reference) Group. The PoWER group, chaired by Janette Faherty OBE of Avanta, consisted of AELP, DWP prime contractors, subcontractors, private and voluntary sector employers, plus Inclusion and ERSA.
PoWER created a project group, funded by PoWER members, specifically to look at the qualifications and the creation of an overarching professional body for the industry. Working closely with the awarding body EDI, the project team were able to use the flexibilities of the QCF to design and develop a flexible and accessible framework of qualifications closely aligned to job roles across the sector.
Too often the processes involved in bringing qualifications to market is unwieldy and time consuming.”
Many of the units came from existing QCF qualifications in customer service, recruitment, sales and information advice and guidance with the addition of two new sector specific units, Understanding the Employment Related Services Sector and Sustaining an Employment Outcome, which were written by members of the project group.
The level 3 award, Certificate and Diploma in Employment Related Services, which together with an Advanced Apprenticeship make up the Employment Related Services Qualification Framework, has been developed for people working with the unemployed, supporting them to progress into sustainable employment. The suite of qualifications allows the industry to set the bar on the high standards expected from employees and the quality service they provide, whilst giving individuals an opportunity to be able to accredit the skills, knowledge and experience they have gained against national standards. By offering clear career paths with greater opportunities for progression, the industry expects to enhance performance and motivation amongst its workforce leading to greater productivity and uplifts in the number of sustained job outcomes achieved.
The take-up of new qualifications for those working in the employability industry is gathering momentum. Over 25 providers have now been approved to offer the qualifications and the first candidate to complete the Diploma is waiting to be awarded their certificate.
The whole of the FE and skills sector can learn from the success of the PoWER group. They have demonstrated how effectively employers can work together to develop standards and qualifications that really meet the needs of their businesses. A shared drive and passion enabled the new suite of qualifications and Advanced Apprenticeship framework to be developed from scratch in less than six months which is a remarkable achievement.
Too often the processes involved in bringing qualifications to market is unwieldy and time consuming, but by having a clear vision of what they wanted to achieve and working closely with both EDI and Skills for Justice, the PoWER group has been able to overcome barriers and found ways of fast tracking the accreditation process.
The journey is not over. Partner organisations working together generated a successful bid to UKCES for funding to support the establishment of the Institute for Employability Professionals and secured further success in a tender to NAS for Higher Apprenticeship Funding; the latter was led by AELP member and leading Higher Apprentice training provider Babington Business College.
Stella Turner is AELP’s qualifications and curriculum manager and a member of the PoWER project group
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Gateshead College principal’s fears of another ‘lost generation’
Gateshead College principal’s fears of another ‘lost generation’
A LEADING figure in North East education has spoken of his fears that the Government is at risk of creating a ‘lost generation’.Richard Thorold, principal at Gateshead College, says the difficult jobs market and rising tuition fees are leading many young people to feel ‘abandoned, humiliated and destroyed’.He believes the Government should be trying harder to encourage businesses to take on more apprentices and questions whether ministers are really informed enough to make the right decisions.Speaking exclusively to The Journal yesterday, he said: ‘I can’t believe that anyone who’s been to Eton or Oxbridge, which covers most of the front bench MPs, really understands the problems many of our young people are facing.’Maybe some of the ministers need to spend some time living on an estate in Gateshead before they make judgements or decisions which affects families and communities.’Whenever I see discussions in Parliament, I wonder if they are taking the issue seriously, or just treating it like they would in a university debating society. They don’t seem to realise that what they are discussing impacts on people’s lives.’He added: ‘I’m concerned we are seeing a return to the 80s and are going to create a lost generation of young people who end up hanging about on street corners with no job, no prospects and no hope.’Mr Thorold has voiced his concerns after the latest figures showed there are now almost one million 16 to 24-year-olds not in education, employment or training, more commonly known as ‘Neets’.He believes the wider society is at risk of turning its back on them, unless the Government and business leaders step in to create more training opportunities.’There will always be a number of people who don’t want to work and never will, and I think we have to accept that,’ he said.’However, if you were to ask the majority of people, I’m sure they’d say all they wanted was a decent job so they could lead a comfortable life and provide for themselves and their family.’We need to encourage more businesses to take on an apprentice, even if it meant they had a drop in profit. I realise that might sound controversial, but if every business which could took on one apprentice, we wouldn’t be in this situation.’The Government needs to establish a focussed voice to tackle the issue, because it’s not doing enough.’Businesses that are offering quick apprenticeships in 12 weeks, with no real job opportunities at the end, are not helping.’Mr Thorold raised his concerns in the same week deputy prime minister Nick Clegg announced plans to help 55,000 Neets aged 16 to 17-years-old with a new £126m scheme.Charities and businesses with expertise in supporting young people are being invited to bid for contracts worth up to £2,200 for every young person they help.Reacting to the announcement, a North East spokesman for the CBI said: ‘This is a step forward, but we remain concerned that this programme does not go far enough.’We still need to see urgent action in schools to minimise the risk of young people becoming Neets in the first place, through better careers and study advice and improved business-school links.’According to the latest figures published this week, in the North East, 16.4% – or 54,000 – of 16 to 24-year-olds are Neets.Echoing Mr Thorold’s comments, Washington and Sunderland West MP Sharon Hodgson said: ‘These figures confirm what young people in my constituency already know – this Government is creating a jobless generation.’Complacent and out of touch ministers need to wake up to the jobs crisis they’re creating and take urgent action now.’A spokesman for the Department for Education said: ‘The number of young people who are not in education, employment or training has been too high for too long – we are determined to bring the numbers down.’We are making sure that young people have the skills they need to get ready for work – creating the biggest apprenticeships programme our country has ever seen and overhauling vocational education, so all employers can be confident about the rigour of our qualifications.’
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National Apprenticeship Service Seminar: Apprenticeships, the International Context
Leonardo Mobility gives young apprentices valuable experience with world leading European employers
Despite my slightly bleary eyes, as I’d opted to travel to London from Birmingham on the day, I was glad I’d arrived bright and early as it gave me the chance to chat to plenty of people, from organisations such as BT and Pearson Work Based Learning, before the presentations began. On explaining that the Lifelong Learning Programme had been given the opportunity to run a workshop on the benefits of providing European placements to apprentices, I was met with genuine interest and enthusiasm – definitely a good start to the day!
Learning from international practice
The morning key note speakers provided a mix of experience and expertise on the topic of ‘Excellence in Apprenticeships: an International Perspective’. The NAS set the scene, explaining that the third annual seminar was bigger than ever with 12 countries represented by a variety of academics, educationalists, practitioners and employers. The day would be all about sharing learning and celebrating the renaissance of the apprenticeship.
I was particularly interested to see the parallel that was drawn between low rates of youth unemployment and apprenticeships as NAS highlighted statistics showing that countries with strong apprenticeship traditions such as Germany, Switzerland and Austria have been affected far less by youth unemployment recently.
We were then given information on apprentices by the Swiss Federal Institute for Vocational Education and Training.
Did you know that in Switzerland Vocational Education and Training (VET) is the most popular form of education at upper-secondary level, with about 70% choosing the VET route?
Underlining the value of Leonardo Mobility
The afternoon was dedicated to four workshops; and I was grateful to be joined by an experienced Leonardo Mobility project promoter, Chris MacCormac of Morthyng Limited, in explaining the added value of offering apprentices European work experience funded through the Leonardo programme.
I was able to give the audience an overview of how apprenticeships and European mobility are increasingly important within the Lifelong Learning Programme, both at a European and UK level, whilst distributing copies of a paper written by Ecorys. The In Focus briefing paper was a recent outcome of the Thematic Networking Group on ‘Meeting Training and Skills Needs’ (TNG 3). A key finding of this paper ‘Strengthening the provision of training for UK apprentices through European projects’ is that Leonardo Mobility projects report the enormous impact European placements for apprentices has on improving skills vital to UK employers; and this was certainly echoed by Chris MacCormac who has been able to demonstrate (through tracking Mobility project results over the years) that success rates measured through progression and completions were greatly increased as a result of participation in a European work placement.
Delegates were particularly impressed with the impact of European Mobility on the attainment of functional skills, as the placements gave apprentices many naturally occurring instances to hone these skills, for example having to calculate sterling to euro improved mathematical abilities.
Getting ready to apply?
The deadline for submitting an application for a Leonardo Mobility project has just passed, but this means that the delegates have plenty of time to start identifying partners and planning their project ideas in advance of the February 2013 deadline. I look forward to following up on contacts made during the event. Hopefully I will see their project applications next year!
Tip! View our recent blog post on National Apprenticeship Week.
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Apprenticeships inquiry to hold first evidence session next week
The first evidence session on an inquiry into apprenticeships will be held this week.
On Thursday, the Business, Innovation and Skills (BIS) Select Committee will welcome experts from different stages of the apprenticeship programme.
Denis A Hird, chief executive of JTL Training, Alex Jackman, senior policy officer for the Forum of Private Business, and Graham Hoyle, chief executive of the Association of Employment and Learning Providers (AELP), will all give evidence on the day.
The session will be open to the public on a first come, first served basis, in The Grimond Room, Portcullis House, at 11am.
The Committee had already previously announced that it will be visiting Sheffield as part of its inquiry.
They will hold a number of formal oral evidence sessions between March 5-6 with employers who promote or offer apprenticeships, as well as learners currently enrolled on apprenticeship schemes.
Adrian Bailey MP, chairman of the BIS Select Committee, said: “Sheffield is home to a number of significant organisations and employers offering innovative and meaningful apprenticeship schemes.
“This is something that is being replicated right across the UK and is something the Committee wants to experience first-hand.
“Visiting Sheffield will allow the Committee to take evidence from a wide range of interested parties. This is a hugely important inquiry; apprenticeships are vital to boosting employment and growth throughout the country.
“The Committee feels it is vital that apprenticeships are structured in such a way so as to maximise their potential and to provide young people in the UK with requisite skills for future success.”
The deadline for written evidence to be submitted to the BIS Select Committee has closed.
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Exit the back to work tsar: After two weeks of damning Mail revelations, she quits – so how can her firm STILL win a new £15m government deal
- Emma Harrison says she stepped down to avoid becoming a ‘distraction’
- Spokesman for David Cameron says he ‘respected’ the decision
By Jason Groves
Last updated at 8:52 AM on 24th February 2012
Dramatic exit: Emma Harrison quit as David Cameron’s ‘back to work’ tsar yesterday after a string of allegations against her employment firm
David Cameron’s millionaire ‘back to work’ tsar Emma Harrison dramatically quit yesterday following a string of fraud allegations against her firm.
She said she was stepping down immediately as the Prime Minister’s ‘family champion’ to avoid becoming a ‘distraction’.
Her company A4e, which earns hundreds of millions of pounds from Government contracts, is at the centre of two police investigations.
Yet incredibly the firm has been named this week as preferred bidder on a £15million contract to rehabilitate prisoners in London.
Mrs Harrison, 48, who is said to be worth £70million, was facing fresh allegations of a conflict of interest after it emerged that A4e had won a separate Government contract to advise the Cabinet Office on how to get problem families back to work. Ministers were urged to suspend the firm’s contracts pending the outcome of the police inquiries into alleged fraud.
The departure of Mrs Harrison is an embarrassment for the Prime Minister, who appointed her to help get 120,000 ‘problem families’ into work and only in December described her as an ‘inspiration’.
But ministers have been rapidly distancing themselves from her in recent days as A4e became engulfed in a tsunami of bad publicity. The Department of Work and Pensions warned that the firm could be stripped of its contracts if evidence of systemic and continuing fraud is uncovered by the police. Mrs Harrison’s decision to quit is designed to limit the political fallout for Mr Cameron. But the inquiries into her firm’s activities still threaten to plunge the Government’s flagship Work Programme into crisis.
A4e is one of only five major private firms to be handed incentive deals to get the long-term jobless back to work.
A spokesman for the Prime Minister last night said he ‘respected’ Mrs Harrison’s decision to quit.
In a statement, she said: ‘I have asked to step aside from my voluntary role as Family Champion as I do not want the current media environment to distract from the very important work with troubled families.
‘I remain passionate about helping troubled families and I am grateful for the opportunity to contribute in an area where I have been active for many years.’
Pleased: Liam Byrne and Margaret Hodge both said it was right thing that Mrs Harrison had stepped down
Margaret Hodge, chairman of the Commons Public Accounts Committee, said: ‘Emma Harrison is right to step down from this high-profile role because of the huge question-marks about her organisation.
‘But there are still several allegations of fraud outstanding and I think in that light all of A4e’s contracts should be suspended until the police investigation is completed.’
Embarrassment: The decision of Mrs Harrison to quit is a blow for David Cameron who only appointed her in December. Last night a Downing Street spokesman said he ‘respected’ her decision
Shadow Work and Pensions Secretary Liam Byrne said: ‘Emma Harrison has done the right thing. But this is not the end – it’s the start of the real questions about the Government’s back to work contracts which are costing millions but are simply not getting enough people into jobs.’
Mrs Harrison, who was awarded a CBE in 2010, boasts that she lives in ‘utter luxury’ in a 20-bedroom mansion in the Peak District.
She also owns a £3million mews house in central London and a £75,000 holiday home near Skegness.
Her activities have come under intense scrutiny since the Daily Mail revealed on February 10 that she had paid herself a dividend of £8.6million last year, despite her firm’s failure to meet targets on finding jobs for the unemployed.
MPs on the Public Accounts Committee reacted in horror at what they saw as excessive fees being paid to the firm for very little risk.
On Sunday it emerged that the firm’s office in Slough, Berkshire, had been raided by police on February 17.
The Mail was contacted by a string of whistleblowers who said that signatures were forged and blank timesheets submitted as proof of work completed.
On Wednesday the Mail revealed that Thames Valley Police had arrested four former A4e staff on suspicion of defrauding the taxpayer.
They have been accused of rip-offs totalling tens of thousands of pounds and will answer bail next month.
A4e, which vigorously denies wrongdoing, said police were also investigating allegations of fraud involving a subcontractor on one of the back-to-work contracts it manages.
The Department for Work and Pensions said it had launched nine investigations into alleged fraud at A4e since 2005. In five cases the firm was ordered to repay thousands of pounds to the taxpayer after evidence of ‘irregularities’ was uncovered.
The Serious Fraud Office has also been urged to investigate.
A4e says it has a ‘zero tolerance’ approach to fraud. The company insists that it has rigorous processes in place to prevent wrongdoing.
Last year the firm’s entire £180million revenue in the UK came from state contracts, although it also does some business abroad.
The DWP insists that the Work Programme is much less susceptible to fraud than previous back-to-work schemes because contractors receive the bulk of their payments only after individuals have been placed in work for several months.
Two fraud inquiries… yet two more deals for her firm
Conflict of interest: Mrs Harrison, pictured with husband Jim, is facing another probe over the awarding of a contract to her firm to advise on how to get problem families into work
Ministers are facing fresh questions about the Government’s links to Emma Harrison after it was revealed yesterday that her firm was named as ‘preferred bidder’ on a £15million state contract.
A4e is understood to have secured the lucrative contract with the Skills Funding Agency to provide education to prisoners in London and help them find work on release.
After quitting yesterday as David Cameron’s back to work tsar, Mrs Harrison is also facing allegations of a conflict of interest after it emerged that A4e had won a separate deal to advise on getting problem families back to work.
The decision to carry on awarding contracts to A4e comes despite calls for the firm’s Government deals to be suspended pending the outcome of two police investigations into allegations of fraud.
Margaret Hodge, chairman of the Commons Public Accounts Committee, said it would be ‘unacceptable’ for the Government to issue new contracts to a company being investigated by the police for fraud.
A4e declined to comment, saying the Skills Funding Agency contract was ‘not yet in the public domain’.
The agency, a quango overseen by the Department for Business, Innovation and Skills, confirmed that contractors had been informed of the decision on Monday, but said there would be a ten-day cooling off period before the deal is finalised. A formal announcement is expected next week.
To add to the controversy, it emerged that an arm of A4e has also secured a Government contract with the Cabinet Office to advise on giving support to and finding jobs for ‘families with complex needs’. MPs said this appeared to conflict directly with Mrs Harrison’s former role as ‘family champion’, which had involved her advising the Prime Minister on helping 120,000 ‘problem families’ into work. In effect, they said she was recommending which firms should be used in the programme while her own company was bidding for the work.
Labour MP Fiona Mactaggart described the deal as ‘improper’.
The contract’s value has not been revealed and even though Mrs Harrison is standing down as Mr Cameron’s adviser, it will still be honoured.
Miss Mactaggart, a former Home Office minister who has asked the Serious Fraud Office to investigate A4e, said: ‘I am very surprised that this contract was ever let.
Mansion: Mrs Harrison’s £5million pile has 16 bedrooms, 100 acres of land, a pool, spa, a bar, a nightclub and a long dining table for banquets
‘I do not think it is right for an individual who has been given an important government role advising on an issue to be able to go on and bid for contracts in that area. Even the least corrupt person would be at risk of designing programmes that would favour their company.
‘Quite apart from any other issues involving her company it is improper for them to benefit financially from her role and I don’t think she had any choice but to resign.’
The Cabinet Office said the contract was originally granted in August last year. A spokesman said the deal was done with the company’s consultancy arm A4e Insight rather than the main firm.
It involves designing contracts for private companies bidding for taxpayers’ money to provide support to problem families – including helping them to find work – in four pilot areas in London, Leicestershire and Birmingham. The Cabinet Office confirmed that A4e would not be banned from also bidding for the work that results, although the councils involved would be able to ‘exclude’ it if they felt there was a conflict of interest.
A spokesman said ministers believed a potential conflict of interest would arise only if A4e actually won the contracts to help get problem families back to work.
A4e Insight is a wholly-owned arm of Mrs Harrison’s firm. Last night A4e said it would not bid for any contracts which result from the consultancy work.
A spokesman added: ‘The Cabinet Office contract resulted from an open and transparent bidding process.’
A4e has established itself as a key player in the initiatives by successive governments to use private sector firms to help the unemployed get back to work. MPs were told this week that the firm has won £224million in contracts from the Department for Work and Pensions alone since the election.
Last year its entire £180million turnover in the UK came from state contracts. A report by the National Audit Office found it had failed to hit targets for getting the unemployed back to work under schemes run by the last Labour government.Despite this it was appointed as one of five prime contractors on the Government’s flagship Work Programme which is designed to find jobs for the long-term unemployed. Half of its work is subcontracted to charities, generating millions in management fees.
The company even received a share of £63million in ‘termination fees’ after the DWP ended a previous back-to-work programme in which it was involved and replaced it with the new one.
Yesterday it also emerged that some of A4e’s jobseekers even worked unpaid in the company’s own offices for a month at a time.
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Beware of ‘cowboy’ apprentice providers
Tony Cohen said firms should put candidates through a rigorous interview process just as with recruiting full-time staff. And firms should beware of “cowboy” apprenticeship providers, he added.
Mr Cohen said: “I got cold-called one day asking if the firm had vacancies for apprentices. When we got involved with them they tried to force the wrong qualifications course that did not suit the firm or the candidate.
“When we tried to take control they wanted to take the apprentice back or else charge us an agency fee.”
He said firms should instead look to local colleges with apprenticeship coordinators and ensure the course and candidate is right, but the process demanded time and effort.
The Forum of Private Business has urged the government to simplify and boost credibility of apprenticeship schemes.
It said apprenticeships needed to be more business-friendly and appealing to industry leaders in a statement made to the Business, Innovation and Skills Select Committee’s inquiry.
Jane Bennett, head of campaigns at the FPB, said: “Our members value on-the-job training, and our latest research backs this up. The problem is that the majority of courses are not flexible, which is essential for small firms.
“There is also a lack of information available to small businesses about course benefits and therefore they find it difficult to navigate a complex system made up of numerous courses.”
She added that clear information on the effectiveness of courses was especially important.
A4e chairman Emma Harrison steps down
24 February 2012 Last updated at 17:55
Emma Harrison has run the company A4e since it began
Emma Harrison has stepped down as chairman of her welfare-to-work firm A4e, she has said in a statement.
It comes a day after she quit her role as the government’s “family champion” amid a police probe into irregularities at the Slough-based company.
As part of its work, A4e handles millions of pounds worth of government contracts for welfare-to-work schemes.
She said she had confidence in the business and hoped her latest decision would help the management team.
In the statement, Ms Harrison, who is also one of the company’s five shareholders, said: “This has been a very tough decision for me, as I have spent my entire 25-year career building up this business and I believe so strongly in the importance of the work it does.
“But it is precisely because this work is so important that I do not want the continuing media focus on me to be any distraction for A4e, for its more than 3,500 employees, and for the tens of thousands of people across the UK and globally that look to this company to give them hope of finding employment.”
On Wednesday it was revealed former workers at the company – two women, aged 28 and 49 and two men, aged 35 and 41 – were arrested last month on suspicion of fraud and bailed until mid-March.
A4e said the alleged case dated back to 2010 and had been uncovered by its own internal investigation.
There currently remains two police investigations into allegations of fraud linked to the company, although the latter probe is believed to involve a subcontractor.
On Thursday Margaret Hodge, Labour chairman of the Commons Public Accounts Committee, BBC Radio 4’s PM programme that all A4e’s welfare-to-work contracts should be suspended until the fraud investigation is completed.
Ms Harrison has been at the forefront of criticism of the company after it was revealed that its shareholders were paid £11m in dividends while all of its £160m-£180m UK turnover last year came from government contracts.
A4e started in South Yorkshire more than 20 years ago to provide retraining to large numbers of Sheffield steelworkers who became redundant when the industry started to decline.
The entrepreneur stepped back from her government role late on Thursday.
The prime minister, who had appointed her to the position in 2010, thanked her for her work.
Why are under-25s hardest hit by unemployment?
What do you think of this? and what do you feel could contribute to the answer??
By Tom Bateman
Robert Simmons struggled to get a job after leaving university three years ago
There’s a worrying fact that often goes unnoticed when people talk about the current “record” rate of youth unemployment.
The number of 16 to 24-year-olds unable to get work has been rising almost without interruption since well before the recession.
In the summer of 2004 around one in eight young people in the UK was unemployed.
The rate rose almost every year, surged after 2008, and has now nearly doubled.
The latest figures from the Office for National Statistics (ONS) show the number of jobless young people broke the one million mark in the three months to September. The jobless total for 16 to 24-year-olds now stands at 1.02 million.
Professor John Van Reenen, Director of the Centre for Economic Performance at the LSE, describes growing youth unemployment as “a long running problem, rather than something that has just happened”.
Wednesday’s statistics show youth unemployment has risen by 67,000 on the previous three months, the worst total since comparable records began in 1992.
That means that more than a fifth of young people are jobless, although the figure includes a significant number of full time students.
The figures also mean under-25s make up more than a third of all unemployment in the UK.
So why is it increasingly hard for five million young people of working age to find a job and is there anything new in all this?
|Date||Number of unemployed 16 to 24-year-olds||Youth unemployment rate (%)|
|Source: Office for National Statistics|
In any economic downturn, unemployment tends to rise because firms lose revenue and need to cut costs.
Despite the fact that young workers tend to be cheaper to employers, often their productivity is lower and they produce less value for the company – meaning they can be more likely to be laid off.
Higher redundancy payments also mean it can be expensive for firms to lay off older workers.
So in a recession, the ratio of young unemployed people tends to rise against the number of older people out of work.
It’s a phenomenon that occurred in the recessions of the 1980s and 1990s, according to Professor Van Reenen.
“I’m not sure there’s anything particularly different about what’s happening this time than there has been in the past,” he says.
But one of the biggest alterations to the lives of young people in Britain has been the growth in the numbers going to university, a change Professor Van Reenen describes as “phenomenal”.
Since 1997 the number of higher education students in the UK has risen from 1.8 million to 2.5 million, according to the Higher Education Statistics Agency.
Ms Dynamite and Charlie Simpson supported an employment campaign
“That’s a massive increase and of course more people coming out means in absolute terms there’ll be more graduates who are unemployed,” says Professor Van Reenen.
It’s a situation felt acutely by Robert Simmons, 25, who graduated with a 2:1 honours degree in Music Production from the University of Central Lancashire (UCLAN) in 2008.
He spent much of the last three years unable to find any kind of work before finally getting a job with a human resources firm, for which he says he is overqualified.
Robert says there was huge competition for even the most basic jobs during his hunt for work.
“There could be 100 people applying, maybe 10 to 15 being interviewed for every position,” he explains.
“Most of the jobs I ended up applying for were unskilled jobs, basically things that you could do after a week’s training in-house.”
But the bad news for graduates might be short-lived, according to Professor Van Reenen.
“Those people are generally getting new skills and that’s going to, in the longer term, give them some protection in terms of their wages and their unemployment levels.”
The bigger concern is over an apparently growing number of young people at risk of being locked out of the jobs market for good.
The issue of people who are not in education, employment or training (Neet) is “getting worse”, says Professor Van Reenen.
The argument goes that the longer young people go without gaining professional skills, the harder it becomes for them to enter the labour force.
It’s something that worries William Winch, 20, from Hackney in east London who has been searching for a job since he left college in the summer.
“I go out every day and if I see a job in the window I put my CV in there,” he says.
“Everyone is trying to look for work really. So there’s going to be a lot of competition.”
William is now being helped by the charity Street League which helps get young people into work using football followed by professional training and support.
But economists point out that the depth of the recent recession hasn’t led to the unemployment rates that many feared.
Professor Van Reenen argues that the labour market is working better than it has in previous recessions, with a lot more “pressure and effort” from employment services to get people into jobs.
There’s also been a downward pressure on wages – many people have suffered a real terms drop in pay – due to what he calls a more “flexible labour market” helping prevent more widespread job losses.
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