“We have used our powers to relax skills and employment funding rules and funding profiles for both businesses and providers – focused on areas of immediate need."
Tees Valley Combined Authority (TVCA) is a partnership of five authorities (Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland, and Stockton-on-Tees) in North East England. TVCA went into the pandemic with a clear strategic approach. This had two main features:
- A coherent and comprehensive local employability service – the expansion of Routes to Work (RTW) – delivered through Employment Hubs in each of the council areas. RTW has developed a reputation for delivering a service that integrates a range of existing funding to ensure that clients experience support which responds to their specific individual situation, assets and aspirations.
- Developing links between skill development, adult education, employability and business growth, and ensuring that local delivery is strongly connected to local needs and, wherever possible, is delivered by local providers, so enhancing local capacity.
TVCA and its partners have used the COVID response to accelerate the changes already underway, and strengthen their approach to further strategic integration to ensure a coherent employability approach, connected to business recovery and growth, with a focus on:
- making the best use of existing resources and flexing these quickly to emerging needs as required
- reorientating the employability focus to engagement and support during lockdown
- enhancing the focus on business growth and the creation of new jobs to accelerate recovery – including the retention and expansion of apprenticeships
- ensuring that new resources and programmes become part of an integrated system of support
- maintaining and building the local support capacity.
TVCA faced a range of challenges going into the pandemic:
- Relatively high levels of unemployment and long-term unemployment, with many of those who were unemployed having low skill levels. Going into the pandemic, the employment rate in the TVCA area for the year to September 2019 was 68.9 per cent, lower than the average UK rate for that period (75.6 per cent). The employment rate for the year to September 2020 rose to 70.2 per cent, but this remained lower than the average UK rate for that period (75.5 per cent) (TVCA Monthly Economic Update - February 2021). The claimant rate for the TVCA area was 4.1 per cent in January 2020, which rose to 6.8 per cent in January 2021 (TVCA Monthly Unemployment Update – February 2021). The average furlough take-up rates for TVCA were 12.4 per cent in January 2021, up from an average 10.6 per cent at the end of December 2020. The highest furlough rates for January 2021 were in Darlington and Redcar and Cleveland (13 per cent) although there was a 2 per cent rise from December 2020 to January 2021 across all five areas.).
- A lack of jobs, particularly better paid, secure jobs, which those who are seeking work or entering the labour market can aim for. Health Professionals were the highest 2-digit SOC occupation group in terms of vacancies at 326 postings in January, an increase of nearly 50 per cent on January 2020’s figure of 221. This is most likely the result of greater demand for healthcare personnel induced by the pandemic. Sales Occupations saw a 43 per cent drop in postings on last year’s figure (TVCA Monthly Economic Update – February 2021).
- Alongside this, there is a challenge about ensuring that it is possible to meet the skill requirements of those sectors that are growing – particularly those businesses seeking Level 4 technical skills. Some new challenges have emerged as the pandemic has evolved: the proportion of expected job growth requiring Level 4 skills has grown from 50 per cent pre-pandemic to 74 per cent now, partly because of the scale of interest in the new Teesworks site (a 4,500-acre site which is being developed for diverse, sustainable and low-carbon activity). This is reinforcing the importance of providing appropriate training and accreditation.
The rapid acceleration of plans to develop distribution depots for Amazon and other logistics companies is expected to create very large numbers of jobs (10,000 in total across the North East and Tees Valley). The growth of this sector is providing many much-needed entry level jobs and helping to address the high levels of unemployment - but it may not match the longer-term aspirations of individuals or for the economic growth of the area. The challenge is how to sustain these roles and help people use these opportunities as stepping stones to better paid work and more responsible roles where appropriate.
There is a risk of creating a real lost generation in terms of those who have lost low skilled jobs and become long-term unemployed as they are unable to access the high skilled jobs of the future. High levels of long-term unemployment create challenges in terms of physical and mental health barriers. It is seen as important to offer increased opportunities for all to achieve higher skill levels and progressive job roles to avoid people with low skill levels and limited work experience having their future careers threatened by the increasing proportion of relatively high skilled jobs locally. “That’s where we will have high cost in the future if don’t address the issue now”.
The TVCA response has been to work closely with its five councils and wider partners to:
- focus on the wide range of resources that already existed and ensuring that these were applied flexibly and at speed to respond to both problems and opportunities – for example, ensuring that interview guarantees were in place for a significant business expansion; becoming a Kickstart intermediary, and ensuring that the opportunities were promoted through Routes to Work.
- shift employability support to wellbeing support when the ability to work or search for work was severely limited. This meant ensuring that work coaches actively made contact with clients and spent time with them to listen and support. The partners have been drawing out the lessons of virtual support; for example, it has become clear that some clients are more open when online, and in addition, RTW has been able to reach a range of new clients who found it difficult to reach an Employment Hub. There is a recognition that, in both the short and the long term, employability services may need to be more holistic, with a stronger focus on mental health and wellbeing in new partnerships involving the NHS and other specialist providers. It is possible that this will be linked to the value of neighbourhood renewal which may come back into play.
- strengthen the focus on job creation and growth to ensure that opportunities are available as lockdown eases and recovery strengthens.
- maintain training capacity throughout the period. TVCA decided to keep paying out on its range of devolved AEB programmes, despite the fact that delivery was severely constrained. This ensured that the ability to deliver these programmes in the future was sustained – but there is a recognition that this was an emergency response and there will be a need to drive up the requirement to deliver outcomes as recovery strengthens.
- respond to the rapid change in skills needs which is accompanying the transformation in the profile of growth jobs. Technology based businesses have come on fast and many people of working age have developed their digital skills.
- put in place an appropriate response to the rapid growth in distribution jobs. While the presence and scale of these is welcome and they provide a range of low skill opportunities to enter the labour force, there is a need to build on this in terms of continuing to create entry level jobs to provide valuable work experience while supporting progression routeways to better paid and more responsible and secure roles, and ensure that the aspiration of the area to focus on higher skilled jobs is not compromised.
In TVCA’s words: “We have used our powers to relax skills and employment funding rules and funding profiles for both businesses and providers – focused on areas of immediate need. We have looked at new ways of using the funding we have, and we have been able to respond immediately if there have been asks on us. Nothing we have done is completely new and innovative – what is innovative is the alignment and responsiveness – being fleet of foot in responding to the needs of individuals and businesses. So we have focused on our ability to respond to individual need, mould eligibility to funding and move away from rigid programmes. But the actions we have taken need to be assessed in terms of appropriateness and fit with future labour market needs. This can only be done at a more local area, where local knowledge is embedded in our partnership. We have been making judgements for the right reasons, but recognise all decisions need to be public sector compliant. It is difficult to do this at scale, and the five councils have done this really well. We are making decisions very quickly – we have the luxury of being small geographically and having well established collaborations.”
Had they been aware of the length of time that the impact of the pandemic would be felt there are two things that TVCA would have done differently:
- They would have been much more directive about how they flexed their local money – for example, continue to pay AEB but be more specific about what providers needed to deliver in response
- It may have been possible to develop skill enhancement approaches to use the downtime productively – for both those in work and those out of work. Although it is recognised that it may have been difficult to ensure that this was demand led, there are areas where there is a sustained skill shortage – for example in Level 3 lab technicians.
In Tees Valley the focus is on the long term. The local response to the impact of COVID has been strong, with a solid range of offers of support for both individuals and businesses. But there remains a challenge to support the creation of many more jobs – so the big debate is how best to accelerate job creation and match this with the right skills at the right time. In five years’ time the area will look very different – in terms of the development of Teesworks, the growth of the airport, more inward investment, and visitors. So the response to COVID and the practices that have been honed – in terms of rapid response based on a close understanding of need – can provide a strong foundation for future practice.
Head of Employment and Skills