Risks to Rishi Sunak’s Extra Investment in Careers Advice in the ‘Plan For Jobs’

There is now a pressing need to flex the ability of the National Careers Service providers across England to work with those who become a new priority due to the impact of the pandemic on jobs: all adults at risk of redundancy and adults over the age of 24, who have, or will become unemployed as a result of a shrinking economy

“The evidence says careers advice works, so we’ll fund it, with an additional £32 million to recruit careers advisers and provide bespoke advice and careers guidance for over a quarter of a million more people.” Rishi Sunak

This positive affirmation of the cost effectiveness of careers advice by the Chancellor at the Dispatch Box is at risk of being undermined by the inability of the National Careers Service to keep up to date with the major changes to the economy and to jobs in the face of the pandemic in the way that it is allowed to respond.

The National Careers Service provides face-to-face careers advice to adults over the age of 18 in England by trained careers advisers operating through a network of Area Based providers across the country. The providers have welcomed the extra investment and the acknowledgement of the value of their work in terms of its cost-benefit to the nation.

However, the uplift to the NCS is in danger of being holed beneath the water line due to the insistence that it delivers according to rules that were set in pre-Covid times. Traditionally, the NCS operates on a 100% payment-by-results basis, evidenced through the achievement of verifiable outcomes resulting in customers accessing jobs or learning opportunities. The tariff is set to prioritise specific groups of individuals who have been identified as being most in need:

• 18-24 year olds not in education, employment or training (NEETs);
• low-skilled adults without a level 2 qualification;
• adults who have been unemployed for more than 12 months;
• single parents with at least one dependent child living in the same household;
• adults with special educational needs and/or disabilities; and
• adults aged 50 years and over who are unemployed or at demonstrable risk of unemployment).

People outside these groups, Non-Priority customers, can access the service at a much lower funding tariff for providers, limiting what can be done to help them. Whilst the above groups remain in need, there is now a pressing need to flex the ability of NCS providers to work with those who become a new priority due to the impact of the pandemic on jobs: all adults at risk of redundancy and adults over the age of 24 who have, or will become, unemployed as a result of a shrinking economy. As things stand these people will miss out and all the signs are that the numbers involved will be in the tens of thousands. Analysis from the Institute of Economic Studies (IES) shows that redundancy notifications by employers are running at more than double the levels seen in the 2008/9 recession, and with the end of the Job Retention Scheme scheduled for October it is likely that this will increase further.

By helping people now, in advance of them being made redundant, as well as those recently made unemployed, we have the best chance of making the Plan for Jobs work. Otherwise, we risk the NCS being overwhelmed by a surge in demand for services and an inability to meet that demand, due to the inflexibility in the system. It is understood that there is a nervousness in government to open up the entitlement to NCS help with the finite level of resource that is available, even with the additional £32 million uplift, and the risks to losing focus on young people by removing the 12 months unemployed qualification period for people over the age of 24. But that would be hard to explain to a 25-year-old who has recently lost their job, or indeed a 19-year-old facing redundancy who has to wait until they are unemployed before they can come for help.

Certain sectors of the economy are being hit hardest by the pandemic: travel, tourism, hospitality and retail. The fact that these sectors are shedding labour means a disproportionate level of unemployment from these sectors, much of this at lower skilled levels (though not entirely) and those recently unemployed are therefore in need of a new career direction as opportunities will be few and far between for some time to come. On that basis alone, it should be possible to design additional priority groups that are targeted to deal with emerging need and address any nervousness about the availability of NCS funding to meet it.

The challenge for NCS providers is clear and for them to meet this challenge they will need to scale up their operations by recruiting, training and equipping additional careers advisers. This is difficult to do when these costs are contingent on income that can only be earned once the outcomes have been achieved in a 100% payment-by-results funding regime, which can be many months after the work has been done, adding a strain on cashflows and a risk to organisational viability should there be a shortfall in outcomes. It is understood that the Treasury is firmly wedded to the payment-by-results model of funding this area of public service, and this is a condition that providers are prepared to work with.

However, without some degree of funding being made available for development and scaling of the Service there is a real risk of underachievement as the cart pulls the horse. This is not just about funding, it is also about reputation for NCS providers, who have an impeccable pedigree of quality and results: recent Ofsted inspections rate all NCS providers as Good or Outstanding; the only sector to have achieved this across the board.

Risks to reputation go much further than this. Clearly the Treasury, the Department for Education and Department for Work and Pensions are at risk of failure if the Plan for Jobs fails: notwithstanding the impact on the many thousands of individuals who will miss out on the help they sorely need at this time of crisis. The mitigations to these risks seem straightforward, but it requires a broader look at what is happening now and what will follow and the flexibility to respond urgently.

Kieran Gordon, Executive Director, Careers England