I'm delighted to welcome you to the Scottish Government's Summit on Employability.
A special welcome to Dr Jim McCormick of the Joseph Rowntree Foundation, who will lead us through the morning; to our guest speakers Sally Witcher of Inclusion Scotland, and Naomi Eisenstadt, the First Minister's Independent Advisor on Poverty; and to our panel, for what will hopefully be a lively discussion later today.
On 8 September I announced our two part approach to devolved employment support. We will deliver continuity of support from April 2017 with a one-year transitional programme for those who need most help to find work – and to stay in work.
And it means we will deliver new fully devolved employment services from April 2018 – focusing on the needs of the individual. Treating those who need help to get into work as individuals, treating them with respect.
I believe our programmes will work better if we bring people with us.
I believe our programmes will work better if they are seen as an opportunity, not as a threat.
I have therefore decided that people should take part in our employment support programmes on a voluntary basis, without the threat of sanctions hanging over them. I am pleased to be able to set out today that the Department for Work and Pensions (DWP) have confirmed that they will refer people onto our programmes on a voluntary basis.
This will be a great relief to people who have had to cope with unnecessary stress and harm in the past. It provides the Scottish Government with the opportunity to show that our programmes are a genuine opportunity to get on and make a go of things, rather than a threat that we know can cause so much distress.
I am delighted with this outcome and that we can now build a programme on these foundations.
Today is the next step on the journey towards putting in place our system of devolved employment programmes.
Today I can announce that Scottish Ministers have awarded one year contracts to Momentum Skills, Shaw Trust and Remploy, for delivery of Work First Scotland – part of the transitional service operating from 1 April 2017.
Through Work First Scotland these providers will deliver tailored employment support and advice for up to 3,300 people with disabilities, including Pre-Work and In-work Support.
Work First Scotland is one of the first demonstrations of how we will do things differently in our effort to embed the Scottish Approach in the design and delivery of new services.
There will be differences from the outset.
Momentum Skills will lead an alignment agenda in their contract area, by delivering Work First Scotland in partnership with Aberdeenshire Council and third sector partners.
This will create a better alignment of services, allowing for co-ordinated referral routes, and making greater use of co-location, in ways not seen under Work Choice.
Overall, our aim is a more efficient service driven by a shared agenda of integration and alignment, which, today, I am keen that each of you will have the opportunity to influence and shape during the roundtable discussions that will take place in a short while.
But greater efficiency does not mean a loss of service. Work First Scotland providers will have the flexibility to offer a truly person centred approach, and to focus on those with higher support needs.
This approach is exemplified in Shaw Trust creating three new Work and Wellbeing Hubs, in Edinburgh, Glasgow and Dundee, as part of the roll out of the new service.
These Hubs will combine employment support and community health and wellbeing provision in one location, ensuring that individuals receive the level of support they need to find sustainable and rewarding employment.
And Remploy will utilise their Community Delivery Network, made up of specialist providers and services, from the third, public and private sectors. This will ensure a smoother journey into employment whilst offering a wrap around service.
I am keen that the integrated and person centred approach, taken by all three providers, ensures Work First Scotland participants have the best possible chance to gain sustainable, fair work in a way that treats them with dignity and respect.
In the other part of our transitional approach, Skills Development Scotland will lead on implementing the Work Able Scotland programme.
Again, this is a one year transitional employability service – this is for clients with a disability or health condition and at risk of long term unemployment, and who want to enter work. This service will provide a combination of advice, support and coaching.
I look forward to Skills Development Scotland progressing this part of the transitional services and to be able to provide more details in due course.
The transition year I've just described was agreed by the Cabinet to allow sufficient time to develop and implement a full service from 2018. And today I'd like to set out those plans in some detail for you.
For 2018 we are building on the views and engagement we have undertaken to date. This has been extensive, it is ongoing and it will continue. And today is part of that process.
The 2015 consultation that the Scottish Government undertook contained much consensus – reflecting views many of you who have been engaged on this agenda in Scotland have been promoting for some time:
prioritising our efforts and support on those who need it most;
developing that support in ways which reflects the needs of individuals, recognising their assets and their barriers;
designing services in ways which maximise the potential for employment outcomes;
a commitment to delivering services coherently within the wider landscape;
ensuring our commitment and investment in partnership working remains focussed on the needs of individuals.
So as we take the initial steps on devolution of employment support, I am committed to taking the approach advocated in consultation, building on this consensus.
Resourcing this is a huge challenge – resourcing it on the back of the cuts in UK Government funding is an even bigger challenge.
But this is a challenge we will do our best to meet – within the finite resources that will be available.
The Scottish Government has committed an additional £20 million next year to these programmes – significantly more than the UK Government – but we must also recognise the constraints placed on us by the depth of the cut we face from London.
So we need to be clear what it is we're trying to achieve and for whom.
We want to establish a distinctly Scottish employability service that creates a strong platform for future services.
We want to design and deliver a high quality, high performing service that helps people into sustained jobs, treating them with fairness, dignity and respect.
We will focus on those further from the labour market but for whom work remains a realistic prospect.
There will be a nationally consistent service, but it will be delivered locally using public, third sector and private capabilities.
And we will seek to integrate and align services to maximise value for money.
I am determined our services will be different from the current DWP programmes.
The message from those using current DWP services is that they do not feel they are in control; that they fear sanctions; that they want to be treated as individuals. We want to listen to and respond to that message.
As I set out earlier, that is why I have announced that the service will be entirely voluntary. And again, as I set our earlier, I want people to attend our support without the threat of sanctions hanging over them. And I want them to have a say in the service and support they receive.
But it's important that people commit to the service. In return for high quality support, participants will have to engage positively and we'll ask providers to develop a relationship and participation agreement with customers to that effect.
It's important we get the approach right to avoid people being defined simply by the type of benefit they receive and being sidelined or left behind.
In the consultation, we were told over and again that the work programme payment model was wrong. We were told the assumption of need based on the benefit a person received was wrong. Many of those who are long term unemployed face the same challenges entering work as those claiming Employment Support Allowance.
So we want to test a different approach – one based on the level of support individuals need and which builds on their existing skills and abilities.
And it's important that we try to match the kind of service against the needs of the individual.
We will have therefore have a tiered service – which will offer three levels of support, with contract prices varying according to the level of need.
Reflecting our commitment to support those further from the labour market, we anticipate most customers being placed in the two higher levels of support.
But we want a tailored service to be put in place that addresses the very distinct needs of everyone on the programme.
As with the best employability support, a full assessment of need, going beyond employability, will be completed and addressed.
It's important that we make sure we deliver greater consistency. Allowing different providers within a single programme to set the consistency and quality of support can lead to too much variation in standards of service in different areas.
There will therefore be consistent minimum standards for all customers with pre-work support of 12 to 18 months and an expectation that in-work support will continue for a year.
And it is important that we try to ensure a wide range of provision from private, from public, from third sector, and from social enterprise providers.
We have, therefore, listened to the consultation in terms of the funding model. Unlike with programmes that operate now, there will be a service fee which we hope will help smaller organisations to engage as contractors or sub-contractors with further payments for job outcomes at three, six and twelve months.
The view from consultation was that DWP contract package areas were too big. This, combined with the pricing model for Work Programme, meant that some organisations couldn't afford to be part of the supply chain.
So we will change that.
But we have to balance the need for local services with ensuring the best value for money. It's a fine balance. We've considered a number of options but it's likely there will be between five and eight contract areas across Scotland. Your views on this today will be welcome.
In any programme we design, it is important that we help those who need most support
Disabled people suffer particular disadvantage in the labour market. There are many reasons for this, but it is clearly demonstrated by the stark disparity in employment levels between those with a disability and those without.
I am clear that we must take action to try to address that disparity.
Not all disabled people will require intensive employment support. But some will. And where they do, we expect a high quality, professional service to be available to meet their needs.
This may include a supported employment approach in line with the Scottish Government's five stage Supported Employment Framework, or Individual Placement and Support for some with severe and enduring mental health problems.
Whatever the requirement, we expect those bidding to provide our services to set out how they will help more disabled people into work, demonstrating that they have the workforce in place to address specialist demand.
Employers are, of course, key to accessing more job opportunities as they arise. Clearly they are crucial, and therefore it is important we engage with them effectively
So we need to take a range of actions. Building on what's there already where we can and working with local partnership approaches where possible.
There are clear opportunities in the public sector, in Health for example. I believe we can build on the experience of the action on youth employment to broaden that and drive more and better opportunities for our customers.
There is so much we can learn from all of you on this and I hope you will work with us to ensure our services add value rather than overlap on links with employers.
In terms of the 2018 service, I want to be clear that we see this as a starting point from which we can develop.
The supplier events scheduled next week will offer the opportunity for those of you with an interest in delivering these services to hear more and to influence the shape and delivery of the 2018 programme.
Throughout the three year contract we will put in place, we will take a continuous test and learn approach to the services.
We are combining some continuity of service for existing DWP customer groups but developing beyond this. We have a wholly voluntary programme based on client need, with a focus on sustained jobs. Our payment model will hopefully encourage a much greater opportunity for smaller or third sector organisations to be involved.
And I look to everyone in this room today and say that you all have a role to play, either in delivering services or helping us develop our thinking for the future and supporting our ambitions for future greater integration.
And on the subject of integration, we are keen to hear your views today at our roundtable discussions which have a particular focus on integration and alignment of devolved employment services. I plan to visit each table discussion to listen to what you have to say.
Your views matter to us and they will be taken forward as part of plans to produce an integration and alignment delivery plan by next spring.
You will appreciate that there is no quick fix to integrating and aligning employability services across Scotland and it is a long term agenda of ours.
But let me reassure you that work is already underway.
Within Government, we are already working with portfolios including Health, Justice and Skills to identify opportunities where we may be able to effectively align and integrate employability services.
We know that devolution of employment support brings challenges and tough choices, but it also brings opportunities.
We have the opportunity to create a fairer, more prosperous country, but more importantly, we have the opportunity to improve people's lives.
We have the opportunity to make programmes not about claimants, customers or cohorts – but about people. People who deserve to be treated with dignity, respect and fairness; and who deserve the opportunity to achieve their potential.
Your views, expertise and experience are an asset that Scotland needs if we are to make the most of the opportunities we have. I would urge you all to continue to build upon that spirit of collaboration and partnership to change lives for the better.