Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report

1. Executive Summary

1.1. The purpose of this paper is to set out the benefits for young people and potential risks for Hampshire County Council in acting as the accountable body to deliver the New Jobs, New Futures project under the Future Jobs Fund Programme.

1.2. This paper seeks formal approval to move into the implementation phase of the New Jobs, New Futures project.

2. Contextual information

2.1. A key aspect of economic prosperity and social inclusion is a high employment rate. This is reflected in the inclusion of NI 151 Overall Employment Rate as a key Local Area Agreement target for Hampshire.

2.2. The effects of the recession have reversed the trend of recent years of a steady, high employment rate across the county. The scale of the impact of the downturn can be seen in the comparison of current Job-seekers Allowance figures and those for the period before the downturn:

Date Number % of working age population

August 2007 7,929 1.0%

August 2009 19,954 2.6%

2.3. A multi-agency partnership has been working together on a number of agreed priorities to address the rise in unemployment.

2.4. In May 2009 the Department for Work and Pensions (DWP) invited bids to the Future Jobs Fund. The purpose of the fund is to create jobs:

(i) for long-term unemployed young people (18-24) or in employment hotspots;

(ii) that would not exist without the funding;

(iii) that have a community benefit; and

(iv) that will last at least six months.

2.5. A consortium bid to create jobs lasting 6 months for 900 young people over 18 months, led by Hampshire County Council and including the two cities and Hampshire's districts, was submitted to the Department for Work and Pensions (DWP) in May, following consultation with the Executive Member for Economic Development. Informal advice was that there should not be separate bids for different parts of Hampshire and the Isle of Wight to maximise the chance of a successful bid. The Council therefore agreed with partners that it would act as the accountable body.

2.6. The bid has now been approved, with the jobs apportioned between the partners as follows:

(i) Hampshire County Council will employ 213 people, of whom 90 will work for the County Council and the remainder will be seconded to jobs with its district partners; and

(ii) the remaining 687 jobs will be created by six partners in South Hampshire, including the two city councils.

2.7. As the jobs will need to evidence a community benefit, they will be sourced from the public sector.

3. Finance

3.1. The bid to DWP for the whole life of the project is £5.8 million.

3.2. The grant offer from DWP is £2, 585,806 for the first six months of the project. The grant offer will be extended to the full £5.8 million on the successful achievement of the first six months' targets.

3.3. An initial payment of £517,161 will be followed by staged payments as job creation quotas are fulfilled.

3.4. Each job created will attract a grant of £6,500. This will cover wages at the minimum wage for 25 hours per week for 6 months, training and support for the employee and administration costs associated with the project.

4. Performance

4.1. Success of the project will be measured against targets agreed with DWP and based on the bidding proposal. The applicants must all be referred by Job Centre Plus.

4.2. Regular monitoring will be required by DWP.

4.3. A Future Jobs Fund Coordinator will be responsible for ensuring delivery against the targets agreed with DWP.

5. Other key issues

5.1. The Future Jobs Fund is a high profile programme of significant importance to central Government and of interest to the media.

5.2. Failure to deliver the new jobs could result in adverse media coverage and damage the County Council's reputation with DWP, potentially reducing the likelihood of being successful in future grant applications.

5.3. Failure to deliver the Agreement carries a degree of financial risk as up front costs are paid by DWP which may then be clawed back if jobs are not created in numbers sufficient to match the bid profile.

5.4. Several factors mitigate the risk of failure:

(i) DWP's six months `trial' limits the overall financial risk to one third of the project cost;

(ii) Partner monthly up-front management costs will be retained by HCC and paid on a monthly basis by results to prevent the need for claw-back from partners.

(iii) Overall up-front management costs of the project paid to HCC are equal to the grant for 66% of the total number of jobs in the profile. Therefore once 66% of the jobs planned for have been created, the financial risk will be minimal.

(iv) numbers of potential jobs coming forward are greater than original bid allowing for some client drop-outs; and

(v) a comprehensive support and training programme will reduce the drop-out rate of employees.

6. Recommendation

6.1. That Hampshire County Council proceeds to implement the New Jobs, New Futures project as set out in paragraphs 2.4 - 2.6. of the report.

CORPORATE OR LEGAL INFORMATION:

Links to the Corporate Strategy

IMPACT ASSESSMENTS:

1. Equalities Impact Assessment:

1.1. In development

2. Impact on Crime and Disorder:

2.1. Unemployment is often an underlying factor of crime. By providing employment for long-term unemployed young people, New Jobs, New Futures may have a positive impact on the lives of young people at risk of offending.

3. Climate Change:

a) How does what is being proposed impact on our carbon footprint / energy consumption?

Not applicable.

b) How does what is being proposed consider the need to adapt to climate change, and be resilient to its longer term impacts?

Not applicable.