TEES VALLEY COMBINED AUTHORITY – WRITTEN EVIDENCE (YUN0040)
Youth Unemployment Committee inquiry
Tees Valley Combined Authority is a Mayoral Combined Authority driving economic growth and job creation across Tees Valley.
We are a partnership of Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland and Stockton-on-Tees local authorities, working with the Local Enterprise Partnership, wider business community and other partners to make local decisions that support the growth of our economy. Under our devolution deal, we have taken on responsibilities previously held by Whitehall including transport, infrastructure, skills, business investment, housing, culture and tourism.
Since the establishment of a Mayoral Combined Authority in the Tees Valley, we have been able to:
We welcome the opportunity to contribute to this inquiry.
Challenges
What are the main challenges facing young people seeking employment today? How do structural factors impact youth unemployment, and how might these be addressed?
Covid-19 has presented an unprecedented challenge to young people seeking employment in the Tees Valley, many of whom will be exiting the pandemic with a year-long gap on their CV.
There are already 11,797 more unemployment related claimants in our region than a year ago (source: DWP) with 32,700 workers still furloughed as of the end of March 2021.
As of March 2021, 6.8% of 16-19 year olds and 12.7% of 20-24 year olds in Tees Valley are claiming UC and searching for work compared to 4.4% and 9% nationally.
As the UK emerges from the pandemic, inevitable employment displacement is going to create an increasingly competitive labour market in which these young people are competing for jobs with more experienced and qualified candidates. Graduates have also been hard hit with competition for graduate level jobs also becoming increasingly competitive. This can further impact on the displacement of young people with lower-level qualifications as we see more under-employment of graduates.
Furthermore, retail, hospitality and leisure – which have historically offered a first step in employment to those with fewer qualifications and less experience, as well as providing part-time opportunities supporting further study – are three of the sectors worst hit by the pandemic.
The impact of Covid-19 compounds pre-existing challenges in the Tees Valley, such as:
We believe that the most effective way to address these challenges is through a holistic and localised approach, in which skills and employment programmes are aligned to and integrated with wider economic goals at a regional level.
In Tees Valley, our ambition, which is nationally recognised, is to become the UK’s hydrogen energy capital, the focus of the UK’s industrial decarbonisation and a nationally significant hub for the offshore energy sector. Much of this economic expansion will take place at Teesworks, the UK’s largest industrial zone. In order to provide the necessary workforce to meet the anticipated demand for 20,000 jobs, the Combined Authority has established Teesworks Academy, a partnership of local colleges, training organisations and employers designed to deliver a local workforce equipped with the expertise businesses at the site will need to grow and succeed and match younger or retained workers with local opportunities.
These opportunities are best facilitated by organisations such as Combined Authorities, which are ideally and uniquely placed to co-ordinate emerging economic opportunities with the careers education and skills training programmes needed to capitalise on them.
Within Tees Valley there are many projects/initiatives which offer support specifically targeted at supporting young people into Employment, Education or Training. Whilst this is positive it is equally complex and often results in the current system potentially being difficult to navigate for both the individual and the support/referral organisations.
The introduction of Youth Hubs, along with the development of Employment and Skills Hubs throughout the Tees Valley region, aims to provide impartial employment support advice to young people to equip them with the relevant information to get the right support. The purpose is to align current delivery with a view to supporting young people to effectively navigate a complex system.
What are the main challenges facing employers in the labour market today? What barriers do they face in recruiting young workers and setting up apprenticeships and traineeships?
Our engagement with businesses has identified that for most, the primary focus is on ensuring survival of their business. The last year has seen significant changes in the labour market and this is highly likely to lead to substantial skills mismatches and growth constraints from skills shortages in the short-term to medium-term.
A lack of awareness of the systems and processes is cited as one of the biggest obstacles to employers recruiting apprentices – either employers are not aware of how the system works and what support and incentives are available or find the systems and processes too complicated and time consuming to engage with.
The solution to this issue is to ensure that there are appropriate local organisations with established links to business and an established profile which can act in a signposting capacity and support organisations who currently feel unable to take on apprentices.
In addition to this, many businesses feel that they do not have the organisational capacity to support a young person or apprentice in their work or learning – an issue of particular relevance in the Tees Valley where 99.5% of businesses are SMEs.
This is further supported by anecdotal evidence gained by TVCA in its capacity as a Gateway organisation for the DWP Kickstart Scheme, with some businesses reporting they do not feel they have the relevant capacity for supervisory support to offer a Kickstart placement.
Again, we feel the most appropriate solution would be a locally-led one in which regional bodies have the resourcing to take on some of the administrative burden of engaging an apprentice.
Is funding for education, training and skills enough to meet the needs of young people and of the labour market? How can we ensure it continues to reach those who need it most?
We do not feel that the level of funding is the issue, more that historically this funding has either been directed towards national programmes which have been prescriptive in design, restrictive in criteria and not always relevant to the needs and circumstances of local areas.
Funding is most effectively utilised when allocated to locally-designed and delivered programmes, and aligned appropriately with other programmes. An example of this in Tees Valley is the DWP Innovation Pilot Routes to Work, which has utilised local knowledge to support thousands of local residents who are the furthest from the labour market into, or closer to, sustained employment.
There is now an even greater need for a more holistic approach to education/training and employment to focus on wellbeing, resilience, financial planning and other relevant issues that young people are dealing with.
It is important to recognise that not every young person is starting out from the same point, funding should be outcome focused, not timebound and flexible enough that it supports each young person along their individual journey towards sustained employment, however long that takes.
Primary and secondary education
Is careers education preparing young people with the knowledge to explore the range of opportunities available? What role does work experience play in this regard?
Historically, careers education provision and been patchy and inconsistent, and not always aligned with regional opportunities or the needs of local employers.
The advent of a Mayoral Combined Authority in the Tees Valley has enabled the creation of TeesValleyCareers.com, a regional careers programme aiming to work with 100,000 local young people to delivery high quality careers guidance in every school and college in the region, in partnership with local businesses.
The programme has engaged over 1000 local businesses to work directly with 11-18 year-olds to directly inform them of job opportunities and career information with the aim of each child receiving seven direct and meaningful employer engagements throughout their education. This direct contact empowers young people to make informed decisions about their future career as well as building their confidence and knowledge of the labour market. This direct employer engagement has already also led directly to post-education employment offers.
Research shows that pupils that receive four or more meaningful engagements with employers between the ages of 11-16 years are 86% less likely to be unemployed or not in education, employment and training and on average earn 22% more.
We are also now piloting a Primary School Careers Education programme across all Tees Valley primary schools, to extend this work to the under 11s.
TeesValleyCareers.com is an example of what can be delivered when resources and powers are devolved to the regions allowing them to develop bespoke programmes ideally suited to their own unique circumstances. Further moves toward devolution would allow authorities like us to go further, faster.
Further education, higher education and training
What more needs to be done to ensure parity of esteem between vocational and academic study in the jobs market and society? How can funding play a role in this?
The government is – for example through the introduction of T-levels and the provisions detailed in the recent Further Education White Paper – clearly making a significant effort to improve parity between technical education and academic study. At this stage, we would comment that employer and parental understanding of parity between all types of study remains an issue and would recommend that resources be allocated to improving that understanding.
What can be done to ensure that enough apprenticeship and traineeship placements are available for young people? Is the apprenticeship levy the right way to achieve a continuing supply of opportunities?
There is a clear overlap between the introduction of the Apprenticeship Levy and a national fall in the number of apprenticeships. Whilst supporting the policy direction to put employers at the heart of driving the skills agenda, we believe the use of the apprenticeship levy could be further enhanced by more local strategic discussions with levy paying employers, exploring how they spend/transfer their levy – and where relevant, supporting them to maximise what they spend/transfer in order to achieve greater local economic benefits/return on investment.
We feel that the provision of a locally-led ‘matching service’ between levy-paying employers and non-levy paying employers would support growth in the number of apprenticeships.
Employers – especially SMEs - continue to describe the levy system as complicated and inflexible, and in many cases, this continues to act as a barrier to engage. Furthermore, the affordability of salary costs for apprentices is a huge commitment for businesses at the present time.
More effective communication and business support is needed to overcome these barriers.
Jobs and employment
What economic sectors present opportunities for sustainable, quality jobs for young people? How can we ensure these opportunities are capitalised on and that skills meet demand, particularly for green jobs?
The answer to this question is for the most part regionally specific. In Tees Valley, our ambition, which is nationally recognised, is to become the UK’s hydrogen energy capital, the focus of the UK’s industrial decarbonisation and a nationally significant hub for the offshore energy sector. Our analysis has also identified industrial digitalisation, life sciences and biologics and healthcare as other potential growth sectors.
Tees Valley’s already sizable health and social care sector, together with the associated skillset of the local population, puts the area in a strong position to meet any further increases in sectoral demand.
As such, we are focused on ensuring that our workforce has the necessary skills to capitalise on these opportunities.
Other regions are likely to answer this question very differently. As such, this question again highlights the value of a Mayoral Combined Authority model in which, under a democratically-accountable Mayor, one organisation is able to integrate and co-ordinate regional economic strategy, emerging employment opportunities and skills demands and infrastructural investment with skills and careers provision.
How might future youth labour market interventions best be targeted towards particular groups, sectors or regions? Which ones should be targeted?
It should not be the case that future youth labour market interventions be targeted towards specific groups, regions or sectors on a national level. Rather, national policy should afford the opportunity for a regional approach to be applied to the design and delivery of these interventions, in which sub-regional bodies such as Combined Authorities are given additional responsibilities and resources to create bespoke approaches best aligned with local priorities, economic strengths and opportunities.
Evidence also suggests that there are significant gaps in support for those people who disengage from projects, especially ESF programmes and therefore a flexible, responsive and immediate “safety net” of support is required. The DWP Innovation Pilot “Routes to Work” has identified this as a significant barrier and is now providing this support but will end in March 2022.
Given the current high availability of ESF support and new emerging national programmes to long term unemployed people there is a need to ensure we have an effective, supportive and continuing signposting/mentoring support to ensure individual gain the most appropriate support and we maximise the performance of existing programmes. Local knowledge and coordination is required for this to be effective.
It is critical that training and support for the long-term unemployed is enhanced to ensure that participants continue to engage and do not become disheartened about the prospect of finding employment in the future.
The Tees Valley’s Routes to Work is an example of what can be achieved locally in response to nationally driven goals. Local areas have the ability to utilise real-time local intelligence to rapidly deliver targeted programmes following national policy direction. Such an approach would be most effective at identifying and implementing the interventions which simultaneously meet the needs of the local workforce and local employers.
Devolved multi-year, place-based, funding settlements for the wider skills and employment system, including for example, the UK Shared Prosperity Fund, will be critical to enable the delivery of integrated skills, work and education systems across regions, focused on the needs of each place and its people, particularly linking this to opportunities for young people in the labour market.
10th May 2021