Agenda Item No. 5
The Vale of Glamorgan Council
Scrutiny Committee (Corporate Resources): 19th March 2013
Director of Development Services
Pressures on the Economic Development Budget
Purpose of the Report
1. Committee sought a report on the budget pressures resulting from the financial performance of the Employment Training Service which is now part of the Economic Development Unit. This report addresses proposed changes to the Training Unit aimed at reducing those pressures.
1. That the report is noted.
Reason for the Recommendation
1. To apprise Committee.
2. Currently, ETS delivers a single programme, the Work Programme. This is on a sub contractual basis ultimately from the Department for Work and Pensions. The contract expires in a little over two years. The Work Programme aims to take long term unemployed individuals, provide them with additional skills and support, and assist them to find employment. The Council is paid under the terms of the contract largely based on results. A fee is paid when an individual is ‘attached’ to the programme by referral from the Jobcentre, but the majority of fees relate to the individual having remained in employment for fixed lengths of time, key milestones being 13 and 26 weeks.
3. In the current difficult economic climate, there are many long term unemployed people who need limited support to be job ready. However, the programme also involves groups for which securing long term sustained employment can be a challenge, including those returning to work after previously receiving disability benefits, which have been reviewed.
4. The Employment Training Service (ETS) was, until mid 2012, a team of the former Lifelong Learning Directorate. ETS is a long established team, previously responsible for the delivery of programmes such as New Deal.
5. In July 2012 it transferred to the Directorate of Development Services, where it now sits in Economic Development, alongside Communities First, Urban Regeneration, Creative Rural Communities and Business Support.
Relevant Issues and Options
6. Since transferring to the Development Services Directorate, the operation of the programme has been fundamentally reviewed. Although originally aimed to be cost neutral based on fee income, this has not been achieved. Prior to transfer an operational deficit of circa £200,000 was forecast.
7. The review of the programme has identified a poor organisational structure to deliver the outcomes needed. Firstly, the overall establishment is too large and complex. Secondly, there are a number of projects operating within the programme which add very little to the required outcomes and generate a disproportionately low level of income. These include a cycle repair shop and a hairdressing shop established to give work experience opportunities. Thirdly, the team was not resourced sufficiently to address the key contribution to outcomes, employment opportunities and links with employers.
8. In this respect improvements have been made by linking the team to the Business Support team with its established relationships with employers. This has already proved fruitful, with for instance, several employment outcomes from partnership working with Whitbread for the new Barry Premier Inn. At the time of transfer to the Directorate the team was performing in 9th position out of 11 providers in South Wales and the West of England against contract targets. As a result of changes made over the last 6 months, performance has since improved incrementally to a current 3rd position at the time of writing. Further, in 2 out of 3 client groups, the Vale is now performing the best in Wales in terms of job outcomes. Average monthly income over the last 6 months has as a result increased by £6,000, or 26% compared to the average for the previous 6 months.
9. In order to focus on important activities, facilitate better outcomes for local people, and essentially very substantially reduce costs, a fundamental restructure of the team is required. It is therefore proposed to merge the Business Support team with the Training Service, under a single manager. At the time of writing the Council is engaged in a formal consultation with staff and recognised trade unions in respect of this proposed restructure. The new combined team would see an overall net reduction of 5 posts (based on those currently occupied by employees or agency workers and discounting vacant posts).
10. Until posts are filled, it is not possible to be precise about savings in costs. However, I estimate that £100,000 will be saved from this proposed restructure, per year, whilst improving performance, and hence further improving income potential to close the deficit.
11. In addition, the proposed restructure will be followed by a move to new accommodation. Currently the team is based primarily at Holm View leisure Centre in Gibbonsdown. This is poorly located for clients, many of which rely on public transport. I am proposing to move the new team to considerably smaller accommodation at the BSC offices on Barry Waterfront. As well as aiding efficiency and client access, this accommodation will save an estimated further £13, 000 per year for the project. This move is seen as essential given the proposal to merge the team within the Business Support team which is already located at the BSC.
Resource Implications (Financial and Employment)
12. The proposed restructure referred to in the report is intended to reduce costs to the Council in respect of staff and accommodation, whilst strengthening the team’s outputs, which lead to income and employment opportunities for clients. The proposed restructure will result in the possible displacement of staff and possible redundancies, dependant on the outcome of matching, competition and redeployment procedures to realise the sustained employment continuity for those who remain, and the viability of the continued service. The costs of any redundancy would remain to be found from future establishment savings.
Sustainability and Climate Change Implications
13. The proposal seeks to put the service on a sustainable financial footing. It also aims to increase performance in assisting people to obtain paid employment.
Legal Implications (to Include Human Rights Implications)
14. There are a number of employment law implications resulting from the proposed restructure and advice will be sought as required.
Crime and Disorder Implications
15. There are no crime and disorder implications as a result of this report.
Equal Opportunities Implications (to include Welsh Language issues)
16. An Equalities Impact Assessment has been completed for the proposed restructure, which identifies no significant implications.
17. It is a Corporate Plan Improvement Objective to encourage economic growth and widen employment opportunities.
Policy Framework and Budget
18. The report is for information only.
Consultation (including Ward Member Consultation)
19. Recognised Trade Unions and staff have been consulted on the proposed restructure. As the programme operates across the Vale, no Ward Member consultations have been carried out.
Bob Guy, Operational Manager for Countryside and Economic Projects
Legal Services – Committee Reports
Operational Manager, HR
Rob Thomas, Director of Development Services