1. Skills Escalator
Pilot and ESF proposal
Thursday 23 April 2015

2. Rationale
Increasing recognition of the day to day challenges faced by those in employment on low incomes and the need for support to enable these people to earn more and progress. A number of reports have highlighted:
For the first time in 2012, more working households were living in poverty in the UK than non-working ones. Just over half of the 13 million people in poverty, surviving on less than 60 per cent of the national median income, were from working families
At the end of 2013 the majority of Local Housing Allowance claims in the capital were from working households

3. Goal End or reduce dependence on benefits for ‘working poor’
Target Group
Low skilled/low incomes
Employed tenants in the privately rented sector and in receipt of housing benefit
Employed as above and housed in Local Authority temporary accommodation
36,000+ such cases across West London Alliance boroughs (Feb 2014)
Target group is known to the Local Authority through their housing benefit claim
Issues such as skills, employment and progression are not part of the housing benefit claim
Participants in receipt of housing benefit – we have used this as a proxy for low pay rather than means-testing every client
Initial target group living in PRS due to initial funding – this was used because we were required to show cash savings – but for ESF this is not a required output so you could open it up more broadly e.g. people living in social housing as well

4. Current Customer Journey

5. Skills Escalator Model

6. New Customer Journey

7. Example Participant

8. Pilot project Running in Hounslow and Harrow from November 2014
73 clients seen in Hounslow
13 started training
24 clients seen in Harrow
12 started training
1 FTE adviser in each borough
1 project manager overseeing both projects

9. Client profiles - gender
Hounslow
Harrow
Average 75% women, 25% men

10. Client profiles – family status
Hounslow
Harrow
Hounslow 80% single income household
Harrow 92% single income household

11. Client profiles - age Hounslow Harrow
Hounslow 71% aged between 31 and 50
Harrow 75% aged between 31 and 50

12. Client profiles – highest qualification
Hounslow
Harrow
Hounslow – 63% qualified to L2 or below
20% L4 and above
Harrow – 42% L2 or below
33% L4 and above

13. Client profiles – length of employment
Hounslow
Harrow
Hounslow 81% of people working for more than 5 years
Only 2% working for under 1 year
Harrow
50% working for more than 5 years
No-one working for less than 1 year

14. Harrow learning so far Residents have been positive – requests diverse
nail art, AAT, sage, legal assistant, sound engineer
social media for self employed
Age range exceeded expectations
Challenges have been
- understanding eligibility, producing evidence
- course start times
- costs – now give guide price of £450
- over all attracting the right people

15. Hounslow learning so far
Well received by residents, demand currently exceeding adviser capacity
High need for ESOL, ICT and other entry level skills
Also challenges re establishing eligibility
Flexibility / availability of training can be barrier
Lower spend on training than Harrow
Long-term project – outcomes will not happen quickly

16. Funding model Activity Cost Management / admin / overheads £54,300
Adviser(s)
£42,000
Training
£50,000
TOTAL
£146,300
Basic funding model if delivering with no match funding (NB this includes half a project manager – model is based on 1 project manager overseeing the project in 2 boroughs.
This relies on there being some existing infrastructure / a team / management support for the PM and the advisers.
If they were working alone we would suggest that a full-time post may be needed.

17. Proposed ESF match Activity Borough funds ESF match Total Year 1
Management
£27,000
£54,000
Adviser(s)
£21,000
£42,000
Training
£25,000
£50,000
Training non-matched
TOTAL
£98,000
£73,000
£171,000
Year 2
£28,000
£56,000
£22,000
£44,000
£26,000
£52,000
£102,000
£76,000
£178,000
Overall totals
£200,000
£149,000
£349,000
We suggest that only 50% of the training budget is matched to retain some flexibility in what training costs you can cover.
It looks likely that ESF will only allow spending on training up to Level 2, which will cover many of your clients’ needs but very unlikely to cover them all. In Harrow in particular they have supported clients with a wide range of other training above L3.
A risk here is that if your clients mainly require training that you cannot fund through the ESF part of the training budget you could end up with an underspend and risk of clawback.
You would need to keep very accurate records of which pot of training funding you used for which client.

18. Estimated outputs 1040 participants 60% women, 40% men 14% aged 50+
70% BAME
45% lone parents
15% with a disability
Based on what we know about our clients so far.
This is based on delivery in 4 boroughs
You may want to adjust this according to make up of your borough residents

19. 250 people gain basic skills
Estimated results
250 people gain basic skills
160 people gain L2 or below qualification (not incl basic skills)
107 women gain improved labour market status
These are the ESF required outcomes from funded programmes
The women gaining improved labour market status could include some of the participants using funding outside of the ESF match e.g. gaining L3 qualification – the qualification would not be an ESF outcome but if it leads to improved status then this could be an ESF outcome.

20. Monitoring
What are we measuring?
Salary
Employer and role
Qualification level
Receipt of LHA / Council Tax support
Sustained change