/ Blog / Improving Public Services blog / Archive by category "Employability"
Investing in our People – learning from the New Zealand ‘Investment Approach to Welfare’

Investing in our People – learning from the New Zealand ‘Investment Approach to Welfare’

The evolution of Work Programme (and its devolution to Scottish Government), reducing public budgets, and the increasing welfare element in City Deals provide an opportunity to think radically about the way that we view welfare to work support in the UK. Our conversations with policy makers and providers about this opportunity has revealed a growing interest in the New Zealand ‘Investment Approach to Welfare’.

I arrived at the New Zealand Treasury around the same time the challenge to overhaul the way New Zealand thought about welfare to work support was set by the Minister of Finance. ‘I want to invest in people the same way I invest in capital assets – upfront with benefits flowing later’ appeared to be the mantra from the Cabinet table’s second in command. Nearly five years later, and after much work by Ministers and officials, New Zealand has its ‘Investment Approach to Welfare’ up and running.

…‘I want to invest in people the same way I invest in capital assets – upfront with benefits flowing later’…

The core principle underpinning the ‘Investment Approach’ is that the Government should invest now, to save later. The future cost to the Government of different welfare recipients in expected benefits and other support is estimated to create a ‘life time liability’ value. Any investment now in the individual that reduces their future liability by more than the estimate is encouraged. Here in Scotland, the ‘Investment Approach’ is consistent with the objectives of the Scottish Government Prevention Agenda.

…the ‘Investment Approach’ is consistent with the objectives of the Scottish Government Prevention Agenda…

Rocket Science spent most of 2015 working with the Dundee Local Employability Partnership in order to identify ways to increase the use of preventation in their employability services to reduce the risk of long term unemployment. To see more about our work in Dundee click here.

In the context of static or decreasing public budgets, the ‘Investment Approach’ is also used to focus and prioritise resources within the welfare budget. Those that have the highest expected future liability receive the most support, as this is where the largest future savings from intervening early are available. Those on the New Zealand equivalent of the JSA represent about 5% of the future cost to the Government, but in the past, received most of the support to help them move into work. New Zealand’s analysis confirms something that definitely rings true here in the UK:  that the real gains are to be made by investing in ESA recipients.

… the real gains are to be made by investing in ESA recipients…

The ‘Investment Approach’ is a powerful prevention communication tool and has been incredibly useful in creating a common language and objective for the New Zealand Welfare to Work agenda. With Work Programme Two and more City Deals on the horizon, the UK has a real opportunity to reconceptualise how Welfare to Work support is designed and targeted. The devolution from Westminster to Scotland for designing and delivering employability services that will succeed the current Work Programme and Work Choice support, provides the Scottish Government an opportunity to start the process of developing a distinctly Scottish Apporach to employability support. You can read more on our analysis of the public consultation responses commissioned by Scottish Government here.

New Zealand’s ‘Investment Approach’ and Rocket Science’s understanding of the approach can provide robust insights into how to better invest in our people.  Please get in touch if you want to know more!

By Clare Hammond

Clare is a Senior Consultant at Rocket Science. With a background in economics and public policy, Clare came to us from the New Zealand Treasury where she had exposure to the development and implementation of the ‘Investment Approach to Welfare’ which was spearheaded by a joint working group from the Treasury and the Ministry for Social Development. 

School Ties – enhancing pupils’ employability by working with small businesses

School Ties – enhancing pupils’ employability by working with small businesses

Small businesses are vital partners for schools in helping young people make a successful transition to work.  This is the key conclusion of our new report for the FSB in Scotland, ‘School Ties’, which presents our research into the scale and significance of small business engagement with schools and how to transform its reach and impact.  Although our work was built on interviews across Scotland the conclusions reflect other research across the UK.  Our main findings are:

  • Business engagement with schools – done well – can transform young people’s futures and earnings.  For example, every meaningful engagement with an employer can increase a young person’s subsequent earnings by 4.5% and those who have encountered 4 or more employers while at school are up to 20% less likely to become NEETs
  • It is really important to help small businesses (employing fewer than 50 people) engage with schools.  Most businesses are small businesses (84%-87% in urban Scotland and 93-96% in rural Scotland)) and provide a high proportion of jobs (24% – 36% in urban areas in Scotland – and 60-72% in rural Scotland).  Without engagement with small businesses pupils will be missing out on understanding a key part of the local economy and a significant source of great opportunities.
  • Most small businesses are not involved with schools – mainly because both schools and small businesses find engagement difficult.  It can take schools as much time and effort to set up a relationship with a small employer who may have an occasional opportunity as with a large employer who may have a number of regular opportunities.  It requires sustained effort and energy, with a key role for Head Teachers in creating a profile for their school in local small business networks and organisations.
  • But small businesses are willing partners – engagement needs to be made easy, and many just need to be asked.  Those that are involved cite altruistic reasons for their involvement – small businesses see themselves as part of the local community with a role to play in supporting a range of community issues of which young people’s employability is one.  However, most say that they gain business benefit from engagement – many citing reputational benefits as well as the value of the contribution made by pupils.
  • Schools in the most deprived areas have hinterlands with relatively low levels of small business activity.  They therefore need to spread their net wider to get the range of opportunities they need – and this suggests a collaborative approach with neighbouring schools.
  • In rural areas – where most business are small businesses – it is particularly important for schools to develop a wide range of small business relationships rather than focus on a-typical larger businesses.
  • Small businesses which are involved with schools contribute in a wide range of ways.  It is important that businesses are helped to understand this range of opportunities and match their ability to contribute to the needs of schools and pupils.
  • Teachers can benefit from engagement with pupils as much as pupils – bringing back new insights into how they can use to make their lessons more relevant to the world of work and enhancing their ability to provide useful insights into current and emerging opportunities in local businesses.
  • …and parents – as business owners, employers, and employees – can provide an important way of making connections between schools and businesses.

On the basis of these findings we have developed a number of recommendations about how to transform the scale and reach of school engagement with small businesses and so enhance the opportunities for pupils to match their aptitudes, aspirations and interests with the world of work.  This report is complemented by a recent assignment to review the work experience approach of a large local authority and make recommendations about how this can be placed in a much wider approach to employer engagement.

Download the full report here

…and our previous report on realising the employment potential of micro-businesses here

By Richard Scothorne

If you want to discuss our work in this area please contact Richard Scothorne at richard.scothorne@rocketsciencelab.co.uk or 07774 141 610.


The Scottish Approach to employability support – our analysis of the Scottish Government public consultation

The Scottish Approach to employability support – our analysis of the Scottish Government public consultation

The Scottish Government has received devolved responsibility from Westminster for designing and delivering employability services that will succeed the current Work Programme and Work Choice support. This presents an opportunity to design a distinctly Scottish Approach to employability support. As part of this, the Scottish Government ran a public consultation in 2015 to seek public views on what a ‘Scottish Approach’ should look like and how the replacement support should fit into this. Rocket Science was commissioned to analyse the responses.

215 individuals, service providers, and advocacy and support organisations responded. Following a combination of qualitative and quantitative analysis we identified six key messages running through the consultation responses:

That the Scottish Approach to employability support should:

  • Have a person centred, flexible and tailored approach that considers all elements of an individual’s life that affects their employability
  • Be designed and delivered by a partnership of organisation such as central and local government, third sector, and educators
  • Focus on ‘real jobs’ through engaging with employers and creating high quality labour market intelligence, so job seekers are prepared for and directed towards jobs that exist.

That any devolved replacement programme should:

  • Be designed nationally but adapted to the local context and delivered locally
  • Involve contracts that use a combination of payment by job outcome, progression towards work, attachment fees, and should incorporate client feedback as a metric for payment
  • Target those with the highest needs, and focus a separate programme on this group to avoid them getting lost in the crowd.

The full analysis report can be found at:


By Clare Hammond

Clare is a Senior Consultant at Rocket Science. With a background in economics and public policy, Clare came to us from the New Zealand Treasury where she had exposure to the development and implementation of the ‘Investment Approach to Welfare’ which was spearheaded by a joint working group from the Treasury and the Ministry for Social Development.

For more information contact Clare on 0131 226 4949

Parent power  – how parent networks could improve social mobility

Parent power – how parent networks could improve social mobility

We looked at how parents’ networks could be used to create improved work experience opportunities for young people in school, regardless of their family status. Using technology to pool opportunities into a universally accessible database where young people could track their experience and skills.  We applied for funding through the tech and innovation funders but it was rejected… we think it has a lot of potential?  What do you think?


Get in touch if you want to find out more.

Caroline Masundire

From learning to earning .. the Corsa years

From learning to earning .. the Corsa years

Or can I borrow some money for petrol to get to work Mum?

So its been nearly a year since I last updated you about my son and how he has got on at college and his electrical installation course.  For those of you new to this saga, I have been charting the last four years of my son’s education from Year 10 through to his attempts at getting an apprenticeship – his learning to earning journey.  You can grab a full recap here.

Well the last year has been both interesting and very expensive.  The good news is that my son managed to finally get a GCSE Grade C in Maths so that he could move up to his Level 3 and reduce down to a one year rather than two-year course.  However he fared less well in his attempts to get an apprenticeship through the traditional routes.  His college seemed only able to get a couple of vacancies to share among 60 students and training providers would only accept him if he had already bagged an employer.  He applied for six apprenticeships online and never received any replies.

Now I know what you are thinking, he probably did not fill out the right forms or had a good enough CV.  My thoughts exactly.  But if you have ever tried to offer advice and help to a truculent hormonal boydult with a  ‘you can’t tell me anything cos you are a parent’ attitude, you can bear witness that parents are in a no-win situation.  On one hand I admire him for standing his ground and being confident and on the other I despair.

My sister who is a trained counsellor in mental health blames this on the teenage brain; emerging evidence that the adolescent brain does not reach adult maturity until the early 20’s which unfortunately means that I have got another three years of sighing, rolling of the eyes and incomprehensible grunting that only gets clearer when a demand for cash/petrol/clothes/loan/phone/oil/MOT/repair is looming.

After two attempts (at theory and practical stages)  my son passed his driving test in November which started an onslaught of an adolescent version of pester power to honour my commitment to get him a car and pay for his insurance for the first year.  This was a deal I struck up with him years ago when it was obvious he would not be going to university like his sister. In the interests of balance and fairness I agreed (stupidly) to give him the same amount towards a car that I paid towards her fees and maintenance, which he reminded me of at least three times a day and managed to extend in value by at least 33%.  However he had given me a very difficult task to find a new model Corsa (3 not 5 door), it had to be silver, a 1.2 engine and less than 80000 miles on the clock.  As you can imagine choices were limited, the mere hint of an alternative or 06 number plate had him raging and flailing his arms about with accusations of me being a bad parent, reneging on my promises and being  ‘just just … oh forget it!’ (cue flounce out of room and silent treatment).

In the end I managed to find the car of his dreams, which needed a bit of TLC, new tyres and apparently a new exhaust system (which I had to replace just five days after purchase).  Add this to the cost of his insurance which I managed to get for a mere £1500 through one of those black box deals, lets just say I paid out far more than I bargained for.

Some of you might be thinking what a fool I have been, but it appears that this investment has started to pay off.  It seems that you are much more likely to bag an elusive apprenticeship if you drive and have your own transport.   As soon as he had his car my son’s success rate at getting in front of people doubled overnight and he got four weeks work experience within a couple of days.  Unfortunately the experience did not last too long as the company only wanted to pay cash in hand and offer work as it came in.  At the time my son was also working 16 hours a week at Iceland and in one week clocked up nearly 50 hours in work… something he could not sustain alongside his studies.

Most of his friends have bagged their apprenticeships through friends and family.  One of his mates has got an apprenticeship paying £25,000 a year, learning one day a week a college with his uncle who owns an electrical company, his other mate’s Dad runs a construction company and has found him a job with one of his sub-contractors; another knows someone who knows someone.  In fact none of his friends have got their apprenticeships through the Government’s apprenticeship portals, or through providers and or through the college.  They have managed to get them through the ‘its not what you know it’s who you know’ route.

Being a family with absolutely no connections to the building trade we began to lose hope until a passing conversation with my partner’s neighbour, whose sons’ own their own electrical business, revealed that they would be interested in having a chat with my son.  After a week of persuading him to ring them up and send his CV, they took him on a week’s trial back in March.   I am pleased to report that he is still there, working on the days he is not at college and will this week be signing up to an apprenticeship with them (crossing fingers the college will pull their finger out and sort out the paperwork quickly).

Working out why we have eventually been fortunate is not difficult.  My son has held down a 18 hour part-time job since leaving school rising to a deputy supervisor within six months – he has developed employability skills; hard work, flexibility, personal communication (but not with his mum!) and responsibility but most importantly he has access to transport and a driving license – an absolute must have for a role in the trade – how else can you pack in eight jobs a day?

He has had a firm foundation of skills and support, which has reminded me of the importance of family and continuous support to keep him in line and focused. We cannot just rely on the educators but they should have provided more than they did by accessing more employers and jobs, give better CV and interview support.  And it seems to me to be a no-brainer for the Government help pay for driving lessons and a licence to improve the chances young people will have of getting an apprenticeship (for low-income families or rural areas) where it counts?

The apprenticeship system surely has to change, we have been talking far too long about the failure to serve young people and employers.  But we also have to change our views on what social mobility really means, we must not talk just about the elite jobs, we need to talk about all jobs and routes to progression as the ‘who you know’ rule is entrenched in all classes.

Caroline Masundire

You can follow Caroline @evaluationista


How do you solve a problem like Childcare?

How do you solve a problem like Childcare?

Caroline Masundire gives her take on the eternal challenges of childcare and where some opportunities lie for innovation.

Two years ago,  I published a blog called Goodbye Childcare, Hello Freedom which charted the challenges I faced as single parent organising childcare in the 80’s, 90’s and 00’s.  Reflecting back on this and my subsequent blog on the Government’s childcare strategy, More Great Childcare, I have put some thoughts together on the challenges of developing and supporting childcare, which cannot be resolved just by extending free provision in early years or pump priming new provision.  Since the 90s, the childcare sector has been subject to a lot of change:

  • Initiatives and some investment from government and regional agencies e.g. extended schools (labour) which attempted to incentivise schools to offer wraparound childcare, through to current Government investment to pump-prime start up provision with a micro grant, the extended free childcare offer which provides 15 hours of free childcare a week and childcare tax credits.  Many of the regional development agencies prior to their demise in 2011, established regional childcare investment programmes and some back to work programmes offered unemployed individuals a childcare subsidy paid to providers to help them manage their transition into work;
  • Professionalisation of the childcare workforce through vocational qualifications and accreditation which has become an integral part of the regulatory assessment of quality childcare but has had a subsequent impact on the cost to run childcare provision;
  • The changing role of local authorities moving from an assessment and regulation role to becoming stewards of the local childcare market, identifying and supporting the development of provision through Childcare Sufficiency Assessments, their requirements around Children and Young People and Economic Wellbeing and their role as brokers of childcare information through their Family Information Services including access to online information;
  • The change to employment conditions (atypical hours, zero hour contracts, short term contracts) and working hours of parents has placed a demand on providers to become more flexible in their childcare offer.  However the pace of that change is hindered by the cost to provide what parents need compared to the scale at which those costs can be recovered through requirements around staff to children ratios.

In short there has been a lot of specific investment in developing provision and some tinkering around the edges, but it still remains a big problem. On top of these challenges recent policy influences are also having a big impact:

  • Welfare reform and the move for parents on Income Support to Job Seekers Allowance once their youngest child reaches school age has increased demand for out of school childcare;
  • National Minimum Wage (NMW)  and commitments to a Living Wage impact both on parental income and the costs of running provision;
  • Potential impacts of Universal Credit (UC) on household income as well as areas such as London where housing costs are significantly impacting on costs of living and affordability.  This in turn is forcing families to move out to more affordable areas to live, extending their commuting time and need for childcare outside of core hours (8am-6pm).

Understanding the tensions between what parents need and what is provided

I think many actors with an interest in childcare understand the tensions but find it hard to resolve the challenge around what parents need and what can they afford against what can the market supply that is both affordable and sustainable for the provider.

We cannot escape the fact that decisions about childcare are complex, something I feel policymakers often ignore.  Parents have to make judgements based on what is Available – around the age of the child (ren) and at times to suit, what is Accessible – where is it and how does it fit around travel to work and finally what is Affordable.  I refer to this as the three A’s which determine parental choice (something we used in sufficiency assessments back in the 00s.

For example look at the needs of a parent with a school age child of eight years and a baby of seven months.  Their childcare has to fit around the school day for the eight year old, so needs to be near or at the school, whereas there is more flexibility for options for the baby for which location is not a ‘dealbreaker’.  In this scenario (which reflects my own experience) the parent has limited choices.  If the school does not provide wrap around care nor has a nursery attached, the formal childcare available will likely be a local childminder that offers places for both under and over 5s and covers school runs to this school.

Another example is for a single parent on in-work benefits with three school aged children under 10 that works five days a week part-time on National Minimum Wage during the school day and does not need to rely on childcare during term time.  Yet during school holidays the parent has to find childcare to cover those hours and find the money to pay for childcare costs for the three children – making childcare unaffordable and out of reach.

What these examples also highlight are the challenges facing providers and local authorities in terms of addressing the different kinds of choices parents have to make based on their varying needs and circumstances.  Whilst quality of the provision is at the fore front of parental concerns, choice is also determined by the practicality of using the options available.  Sufficiency assessments provide an overview of need and offer at a local authority perspective, but providers need to have assurances around that they can cover costs and remain sustainable and profitable.  So it is unsurprising that there is a lack of choice; providers are guided by simple market forces and will offer provision where they can be assured of income, often resulting in lots of provision of early care and lack of provision in wrap around and out of school care.  The latter need is often met and supported through informal childcare which although affordable and often free is less reliable and breaks down.

Some opportunities for innovation

There are opportunities to look to innovation to address gaps both in terms of diversification of provision and collective action by local agencies to support the childcare market.  Here are my top two!

Innovation 1 – From Atypical to typical

There are significant opportunities for formalising the informal market for atypical provision. Atypical working hours describe working patterns which do not fall within the 8am – 6pm standard hours, and includes shift work, irregular hours, over-time, being ‘on call’, and weekend work.  Commuting (common to London workers) can also turn a typical working day into one of atypical hours; 16% of working people in London travel for over an hour to get to and from their workplace.

Research conducted by the Resolution Foundation suggested that “[c]urrent market failure in the provision of childcare outside core hours and international examples of best practice indicate that there may be a broader role for government in developing a childcare market that is responsive to the needs of parents working atypical hours”. A survey from the Daycare Trust highlighted that 53% of parents reported problems accessing childcare before 8am and 66% had problems accessing childcare after 6pm.  It also showed that only 9% of local authorities in England reported “sufficient childcare” for children of parents with atypical work patterns.

Research also shows the difficulty of demonstrating demand to be a major factor in establishing atypical childcare. The demand for atypical childcare can be untested because parents are not aware that there is even an option to request this from their local authorities. As a result, the “majority of parents, particularly those from low income groups, fill this gap with informal childcare” (Daycare Trust) – that is, grandparents, friends and other family. However, this is not always possible, particularly for migrant families without a support network, and this kind of support is not a long-term solution as informal care is more likely to break down.  The development of using innovation in atypical provision is challenging but achievable, both in terms of modelling a sustainable solution (a business model we developed for the London Borough of Brent which focused on an estate based solution) and facilitating the exchange of childcare services and payments through currency models such as Time Credits for two hours or less.  Both of which need to be ‘close to home’.

Innovation 2- Joint investment focused on assets and shared resources

We know that there is often a disconnect between local actors that have responsibility for the local childcare market and local economy.  Our review of innovation in childcare in Wales highlighted  failures in local authority departments to ‘join the dots’. Departments often make investments in isolation from one another and do not see the connections between their policy and funding decisions.  Closing the gap in perception between economic development and childcare professionals is a key challenge.  Otherwise, it will not be possible to form effective partnerships to deliver more effective use of local assets and resources.  In our view such partnerships have the power to transform how the market operates.   Our key recommendations from this review included the following

There needs to be greater collaboration and working between policy, commissioning and providers to design childcare solutions that better meet the needs of parents and ensure the sustainability of provision.  This may include:

 The sharing of resources and funding for the development of provision, linking into community venues such as schools and helping providers to work together to provide a wider range of services.

    • The sharing of costs and associated administrative burdens of delivering childcare i.e. DBS registrations, management through a managing agent model to bring different providers together.
    • A multi-Agency approach, which is based on more coherent communication between Family Information Services and providers around childcare options to help manage parent expectations of what is childcare and the costs and benefits associated with it and possibly wrapped into wider benefits and money management advice and support”

So what next?

There seems to be very little in the election promises in 2015.  Without having in place a universal childcare offer in the UK (a dream but an impossibility) we can look forward to more tinkering and short term investment, with a bit of regulation thrown in, which has been the default position of all government administrations since before I can remember. Which leaves us with the question. Do we sit back and wait for the next initiative or do we grab the opportunities that innovating our ways of thinking about and working towards solutions present us?  I know which one I prefer.


Follow Caroline on Twitter @evaluationista

Six things we’ve learnt about employability in the Coalition

Six things we’ve learnt about employability in the Coalition

Richard Scothorne reflects on the lessons we have learnt from employability programmes over the past five years.

People can’t find work that doesn’t exist

In developing employability strategies for various areas with high and sustained unemployment a consistent feature has emerged.  They display a ‘jobs gap’:  a significant difference between the numbers seeking work and the numbers (and types) of jobs available locally.  Some of these areas have great economic development strategies in place with strong leadership and effective partnerships – but even if they exceed their highest expectations they won’t close the gap. There are lots of practical implications of this, such as what do schools do to help pupils understand the wider labour market, broaden their horizons, and give them the skills, confidence and resilience to help them move away and thrive in an unfamiliar community?  Can coordinated action be developed between ‘job gap’ areas and areas with much tighter labour markets to help people move and thrive?  And – over all of this – how do we deal with a situation where the match between where people are and where jobs are is getting out of kilter?

We have made great strides in partnership working, but…

On the whole, our ability to work as collaborative partners has come along in leaps and bounds – partly because the situation has been so bad and resources relatively limited.  This is taking some interesting and ambitious forms.  For example, in one area the partners have created a coherent ‘employment service’, integrated with small business development, with all the organisations playing to their strengths and with clear assessment, personalised design and progress management for all priority clients. Every month they review their high quality management information and take action on weak links, emerging issues and under-performance.  You’re right, I made that up.

We need to be clear where our loyalties lie

There are a lot of great, dedicated people who provide exceptional support and regularly go the extra mile for their clients.  We need to recognise and reward them – and ensure that anything less is not acceptable.   If we don’t see a great service we need to do something about it as funders and partners, otherwise we are letting down their clients.  And if we see underperforming providers who are outside our control (eg on the Work Programme) we need to find ways to ensure that our citizens get the help they need.

Success has many parents but failure is an orphan

 If Gordon Brown had formed a government in 2010 rather than David Cameron, we would have had a programme for the long term unemployed that looked awfully like the Work Programme.   The Freud Report on the future of welfare to work, which led to the Work Programme, was commissioned by the Secretary of State for Work and Pensions – not Ian Duncan Smith, but his 2006 Labour predecessor, John Hutton.  This didn’t stop Labour deriding the programme as “worse than doing nothing” when it failed in its early years to meet DWP minimum performance targets.  But is it wishful thinking to hope that perhaps we would have had a programme which demanded (and rewarded) more consistently engaged partnership behaviour by providers and stronger local ownership?

We can do a lot more on prevention

There has been a sustained argument that the risk of deadweight made early identification of those particularly vulnerable to long term unemployment not worthwhile.  But the case is crumbling, and international good practice shows that a combination of personal characteristics, attitudes and adviser judgement can bring about a significant improvement in predictive ability.  Particularly if you take into account the cost benefit of vulnerable clients gaining work even a week or two earlier than they might otherwise have done.  Combine this with earlier support at school, strengthened school/work transitions, ensuring a good match between client and job, support for new recruits (dealing with difficult supervisors, demanding routines, travel to work, childcare etc) and progression to more responsible jobs and more pay through skill enhancement at work, and you have the making of powerful local preventative strategies that can transform lives.

And finally, a sixth:  Many of our clients would have been saved a lot of pain and hardship if more people understood and applied basic macroeconomics…

Contact Richard for more information