Policy Innovation Blog

How do we find the size of the employability sector?

29.10.2012

The following is a guest blog from Paul Bivand of the Centre for Economic and Social Inclusion:

We have estimated the size of the employability sector at £5 billion a year. How did we reach this total? The easy answer is saying Annual Accounts. However, this begs the question of which Accounts.

The most difficult problem is working out which organisations to include and which to exclude.

We have included Jobcentre Plus' frontline services. Now, Jobcentre Plus managers have greater authority to innovate in delivering services, within a basic concept of monitoring and instructing jobsearch. For managers and staff, this is a major change from the Standard Operating Model, where staff were instructed to apply DWP's distillation of research and evaluation - but had extremely limited discretion. Jobcentre Plus forms just under half the total £5 billion budget. Northern Ireland's Employment Service is added as well.

The narrowest concept of the sector would be services contracted to DWP such as the Work Programme and Work Choice. These are very much smaller. For the Work Programme, where providers are required to invest money themselves, we have included an estimate of the cash flow they need to invest in the current year.  This includes sub-contractors as well as Prime Contractors. We have also included a range of programmes operated in Wales, Scotland and Northern Ireland, including those funded by the European Social Fund.

The devolved Governments, including for this purpose the Mayor of London, have a range of programmes to provide pre-employment employability related training. In England there has been less equivalent provision. English provision is being expanded within the Skills Funding Agency budget.

We have included Apprenticeships within the sector. They form the second largest portion of the £5 billion total. Why have we included Apprenticeships? This is partly a question of history and partly one of infrastructure. One of the more controversial aspects of the current Apprenticeship system is that Learning Providers have a large role both in providing the learning elements and in promoting and managing apprenticeships for employers. The aim is to ensure that burdens are taken off employers, while requirements for transparency of qualifications that meet national needs for flexible and transparent labour markets are met.

Historically, the current Apprenticeship system and its provider infrastructure descend from the Youth Training Scheme of the 1990s, where higher level and employer-based training became Modern Apprenticeships in the later 1990s.

Disability employment services are an important part of the sector, though one where finding budgets is more difficult. The Access to Work budget is regularly promised to rise, but recent figures show the numbers supported declining.

The group that we were not able to include, though we recognise their importance, is the section of the private sector Employment Agencies that deal with the same group of candidates. These range from larger companies specialising in 'industrial' placements, to a wide range of small employment agencies.



Read the other blogs related to Nesta's Making It Work report:

• What is the current approach to tackling worklessness?
• Innovation in labour market programmes
• Innovation in the work programme and beyond
• The lack of innovation thinking in the mainstream system