Joint Committee on Public Service Oversight and Petitions

Meeting of 19th June 2013

Chair and members of the Committee

Firstly, I would like to thank you for the opportunity to make this introductory statement on the matters you have asked to be addressed this afternoon. I am joined by officials from the Department – T.J. Fleming, Principal Officer with responsibility for Employment Schemes and the broad range of Training and Education Schemes supported by the Department of Social Protection, and Donal Spellman, Assistant Principal with policy responsibility for these programmes. Shane Reynolds, Higher Executive Officerwho works with Donal Spellman and T J Fleming is also in attendance.

You have invited us here today to discuss the Back to Education Allowance Scheme and in particular the eligibility criteria for the scheme.

  1. Introduction

The Department of Social Protection has a broad range of training and education schemes available to assist jobseekers in their efforts to return to employment. Whereas the Department of Education and Skills has the lead role in supporting learners, the Department of Social Protection supports the return to education primarily through the Back to Education Programme which consists of the Back to Education Allowance (BTEA), the Part Time Education Option (PTEO) and the Education Training and Development Option (ET&D). BTEA is a broadly targeted non-statutory second chance education opportunities scheme for eligible people on certain social welfare payments who wish to participate in full time education.

A high level review of employment supports was carried about by the Department in 2012, followed by a stakeholder’s conference to discuss the review and its recommendations in early 2013. The report noted that ‘an analysis of the relevant BTEA data on those originating from Live Register payments indicates that 60% of those who completed or dropped out of a course under BTEA at the end of 2010-11 academic year had returned to the LR as at September 2012’. BTEA, as with many other schemes reviewed, is undergoing a process of change as witnessed by the changes to the scheme in Budget 2013 and the on-going considerations of the review recommendations. The salient recommendations from the review with regard to BTEA are;

  • While the 3 month eligibility period for second level courses should be retained this should only apply to those pursuing second chance education leading to a leaving certificate qualification or below. Post Leaving Certificate further education courses should be subject to the same 9 month eligibility period as third level courses.
  • The general minimum age requirement for entry to BTEA should be raised from 21 years to 23 years of age.
  • For those pursuing second chance education leading to a leaving certificate qualification or below, the current age requirement should remain – i.e., over 21 years, or aged between 18 and 20 and out of formal education for at least 2 years.
  • In line with other activation schemes BTEA jobseekers participants should establish an underlying entitlement to JA prior to qualifying for BTEA.
  • There should be a requirement to re-qualify for BTEA by establishing an entitlement to a Social Welfare payment for those who complete a course and wish to progress to a higher level course. The practice of ‘freezing’ JB while on BTEA should also be discontinued in conjunction with this change.
  • The practice of maxing up payments for participants on means reduced payments should be discontinued and only the underlying social welfare entitlement should be paid to participant where an entitlement exists
  • As case management and client profiling is developed DSP should take on more active discretion on what clients access BTEA, This would involve assessing the likely contribution courses will make to the client’s re-employment chances, given the client’s own background and local and national labour market conditions.
  • In this context, with a view to moving towards a more targeted scheme, attendance on shorter term, accelerated and conversion courses which are more suitable to some cohorts on the LR could be allowed via BTEA.
  1. Case of Mr Thomas Kevin Walshe

A person wishing to pursue a course of study supported by BTEA will have to satisfy a number of conditions such as being a certain age, in receipt of a prescribed social welfare payment for a specified time period, pursuing a full time course of study leading to a recognised qualification in a recognised college and progressing in the level of education held by the client with reference to the national framework of qualifications among others.

Currently the period for which a person is required to be on a qualifying social welfare payment, such as a jobseekers payment, before assessing the second level option is 3 months (78 days) and 9 months (234 days) for third level option ; this was reduced from 12 months in 2010.

Mr Walshe was refused BTEA on 25/08/2011as he was not in receipt of a jobseekers payment for the required 234 days prior to commencement of his course. He was only in receipt of Jobseekers for 126 days at the commencement date of the course. Mr Walshe was informed of this decision on 25 th August 2011 and of his right to request a review of the decision.

  1. Eligibility periods for activation schemes

There are a number of reasons why an eligibility period is necessary for access to the Department’s activation schemes and in particular a scheme like BTEA which can involve commitments of up to 4 years or more.

  1. Current Government Policy

The Government’s activation strategy is presented in Pathways to Work: Government Policy Statement on Labour Market Activation. The overarching objective of the strategy is “…..to maximise the number of new jobs which will be filled by the unemployed”.

‘Pathways to Work’ has five strands:

  1. more regular and on-going engagement with people who are unemployed
  2. greater targeting of activation places and opportunities
  3. incentivising the take-up of opportunities
  4. incentivising employers to provide more jobs for people who are unemployed, and
  5. reforming institutions to deliver better services to people who are unemployed.

Implementation of these five strands will ensure that people who are unemployed will be given the opportunity to acquire suitable skills and/or qualifications. The second strand commits to greater targeting of activation places and opportunities.Given limited public resources, it is essential that activation measures are targeted.The long-term unemployed in particular must be a focus for interventions.

  1. Construct of the Live Register

The Live Register is constantly changing with large numbers joining and exiting the Live Register in any given period. The average exit rates so far in 2013 from the Live Register at 3, 6, 9 and 12 months durations are 25%, 46%, 59% and 69%, respectively. This means that, on average, of the people who join the Live Register in a particular month, 25% will leave it within 3 months, 46% leave within 6 months, 59% leave within 9 months and 69% leave within 12 months. Given that BTEA confers an entitlement, in some cases beyond where an entitlement exists, to a social welfare payment for a considerable period of time it is necessary to enforce an appropriate eligibility period. Persons on the Live Register for a year or more (known as long term unemployed) now account for about 45.5% of all persons on the Live Register and this rate has been increasing slowly in recent months. The Pathways to Work is currently targeting these long term unemployed persons to assist them in gaining access to the labour market or in attending further education.

  1. International Evidence

Education/training measures are a common element of activation interventions across countries. Evidence reviewed by OECD[1] suggests that labour market training provides the best long-run return of any active labour market programmes, but that a number of factors need to be borne in mind in considering the contribution of education/training under conditions of continuing high unemployment:

  • Training rather than “work first” can have negative effects on return to employment in the short run because of “lock in” effects. These “lock in” effects are however likely to be of less significance in a period of high unemployment
  • Training and return-to-education schemes are relatively high-cost, particularly those of longer duration
  • With continuing high unemployment it could be argued that the main problem for the Irish labour market continues to be on the demand side rather than the supply side. As a result, employment outcomes from training interventions are likely to remain weak for some time to come

The review recommendations made in relation to BTEA are designed to address these factors. In particular, the recommendations in relation to eligibility conditions and an enhanced role for DSP in the process by which clients gain access to programmes are designed to reduce the possibility of “lock-in” effects having a negative effect on return to employment. This is of importance given the relatively long duration of the typical course being supported under the Department’s programmes.

  1. Targeting scarce resources

The numbers availing of BTEA and the associated cost of the scheme has risen dramatically in recent years. Numbers for the current 2012/13 academic year at the end of December 2012 was 25,961 which represents a 192 % increase on the 2007/08 numbers. Similarly, expenditure on the scheme has also increased dramatically from just over €64m in 2007 to almost €200m in 2012, an increase of 212 %. In addition to the increases mentioned, bespoke versions of BTEA now support new initiatives from the Department of Education & Skills such as Momentum and ICT Skills course. Combined these two initiatives offer over 7,000 places, many of which are full-time courses and subsequently may be supported under BTEA. This in turn is placing further pressure on BTEA expenditure. At the end of April 2013, there were 27,830 people engaged with BTEA, 91% of whom originated from unemployment payments

  1. Policy change pilots BTEA

A number of bespoke versions of BTEA are currently being rolled out to inform future policy. In some instances this involves relaxing certain eligibility criteria with agreement from the Department of Public Expenditure and Reform. Two such examples are Momentum and ICT Skills programme 2013.

Momentum is part of the Government’s Action Plan for Jobs initiative and is currently being rolled out by the Department of Education & skills with income support to eligible people provided by DSP. Momentum will support the provision of free education and training projects to allow 6,500 jobseekers (who are unemployed for 12 months or more) to gain skills and to access work opportunities in identified growing sectors.

ICT Skills provides 769 free fees places for level 8 conversion programmes supported by Department of Education & Skills. Those supported by BTEA to pursue this course must be unemployed for nine months to qualify.

While sanction has been secured to relax the progression criteria for both initiatives no changes have been implemented with regard to the eligibility period, in fact the eligibility criteria for accessing Momentum has been increased to 12 months.

Concluding Remarks

I have outlined the findings of the review of employment supports regarding BTEA, including reference to eligibility periods. This represents the parameters in which BTEA policy will develop as the Department moves to the implementation phase in order to develop BTEA to a scheme that represents a more targeted and effective activation intervention.

I would like to thank the Committee for this opportunity to make this presentation. We are happy to address any questions you may have in so far as we can.

Ends.

[1] OECD (2006). OECD Employment Outlook, Chapter 3. Paris: OECD