Economic Development and Transport Committee

Policy Review: Economic Inactivity (List of Respondents)

Wales Council for Voluntary Action

Submission to the National Assembly Economic Development Committee
review of economic inactivity in Wales

IntroductionWales Council for Voluntary Action (WCVA) represents the interests of voluntary organisations, community groups and volunteers in Wales. It has 1,000 organisations in direct membership and is in contact with many more through national and regional networks. Over the past decade WCVA has calculated and articulated the economic contribution of the voluntary sector in broad terms - number of jobs, total income, percentage of GDP, value of volunteering etc. The sector in Wales is now estimated to have a total annual income of £1.02billion. It employs 22,900 people; and 1.48m people volunteer giving an average 1.2 hours of time a week. The combined value of volunteer time and the sector’s income is estimated at almost £2.8 billion, equivalent to over 7.6 per cent of the GDP of Wales (based on the number of hours volunteered, the average income in Wales, and an estimate of the staff costs of voluntary organisations from a 2003 survey).WCVA’s recent and planned work has contributed to an enhanced profile of the voluntary and community sector by:

• Contributing to the development of the Assembly economic strategy;
• embedding social economy measures into the European Structural Fund programmes;
• campaigning for inclusion of not for profit organisations within definitions of "business" and small and medium sized enterprises (SMEs) and corresponding access to mainstream business services and funding opportunities;
• establishing demand-led Intermediate Market Initiatives.

In this submission, WCVA highlights the contribution of the voluntary sector to supporting people who are economically inactive through:

• Volunteering
• Intermediate Labour Market initiatives
• social enterprise
• community development and regeneration

VolunteeringOften the first route for those seeking to return to the labour market is through volunteering, which provides opportunities for unemployed people to experience real work situations and try out new occupations. Getting involved in volunteering activity offers participants the opportunity to build confidence and develop skills, which can be a critical first step back into employment. The skills and experiences gained through voluntary action can equip a person for employment, as well as providing structure to an otherwise empty day, opportunities to develop social skills, and make useful contacts. For example, the volunteer bureau managed by Pembrokeshire Association of Voluntary Services has a contract with the local Careers Company to provide enhanced guidance for economically inactive people who are interested in volunteering. As a result, the volunteer bureau identifies volunteer placements with organisations able to provide added value - through training and educational opportunities - that will further an individual’s development, and increase their job prospects. There are many examples of this type of activity throughout Wales, but volunteering can be overlooked and undervalued by agencies charged with tackling this problem. The Assembly Government’s main sources of support for volunteering projects are the Active Community Initiative, the Volunteering in Wales Fund, and Millennium Volunteers. The Active Community Initiative is a UK wide initiative aimed at rebuilding "a sense of community throughout the UK by encouraging and supporting all forms of community involvement". While the aim of the initiative remains the same across the UK, Wales, England, Scotland and Northern Ireland are implementing their own strategies to address local issues. In Wales, projects are supported that promote and maintain volunteers and community involvement in areas that will include significant numbers of economically inactive people, including rural area, young people, ethnic minorities, older people and disabled people. The Volunteering in Wales Fund supports projects that directly involve volunteers, and funds local volunteer bureaux that help people who want to volunteer. In 2002/03 the number of new volunteers recruited by projects totalled over 2000 and the number of people supported by the network of Volunteer Bureaux totalled in excess of 6,500. Millennium Volunteers (funded by the Assembly Government and managed by WCVA in partnership with Wales Youth Agency and the Council for Wales Voluntary Youth Service) encourages volunteering among the 16-24 year olds and has recently celebrated the involvement of the 4,000^th young person. It has been successful in reaching unemployed and economically inactive young people - over 13% of Millennium Volunteers are unemployed or on government training schemes, and over 5% are economically inactive.Many voluntary organisations have experience of delivering government-training programmes and are well placed to advise and support unemployed volunteers back into paid work. These organisations are very often the "frontline" and first contact point for individuals who are currently economically inactive. There is potential for greater investment by the Department for Work and Pensions. Previous schemes such as the Community Opportunities Programme in the 1990’s funded posts specifically established within relevant voluntary organisations to assist unemployed people into suitable volunteering opportunities. There is scope to consider similar initiatives targeting economically inactive people. However, whilst the benefit rules have changed to allow people to volunteer, there is still evidence that benefit officers do not understand the changes to the rules and often act as a barrier to claimants who wish to participate in voluntary or community activity. Intermediate Labour Market initiativesThe voluntary and community sector has played a leading role in providing support for grassroots business in local communities, including employment support. This is a clear area where the role of the sector can develop and expand and its ability to do so will be key for the successful implementation of the Assembly Government’s aims. Social businesses in the voluntary sector are now demonstrating effective intermediate labour market (ILM) business models that are providing market demand-led opportunities for economically inactive people to join the workforce. The voluntary sector is able to mirror SMEs in the private sector, offering a broad spectrum of opportunities and transferable skills for people. Social firms, for example, are creating supported employment and training opportunities for people with disabilities. One major initiative is the North Wales Labour Market Intermediary (NWLMI) currently being led by the Voluntary Sector. This is a European Objective 1 project with funding to support economically inactive people within the four counties of North West Wales. The project commenced at the beginning of June 2003, and will run until at least May 2006.The project is a unique partnership of the four local authorities in the area (Conwy, Denbighshire, Gwynedd and Ynys Môn), the Welsh Development Agency , JobCentre+, ELWa, Careers Wales, and Working Links. All of these partners provide some financial support to the project, together with Assembly Government funding. WCVA chairs the partnership and manages the programme on its behalf.The aim of the LMI is to assist economically inactive people into full-timed sustained employment through developing social enterprises within the four counties of North-West Wales. WCVA supports, advises, and manages a network of Intermediate Labour Market Organisations (ILMs) who provide temporary subsidised employment (funded by the partnership) for up to six months, and assist each person to progress into a full-time job. The support available must consist of:

• Work experience - very often it is the fact that a person is out of work that prevents them from being considered by an employer;
• structured job search support - many people do not know how to complete an application fully showing their skills and experience, or know how to present themselves at interview;
• personal development - to fully prove their competency within a vocational role.

The network of ILMs currently consists of 16 organisations. WCVA are working to develop a further 16 organisations over the current lifetime of the project. The focus will be developing new ILMs in unemployment blackspots, and areas of high deprivation. During the lifetime of the project the NWLMI intends to achieve:

• 1,000 starts on the project.
• 720 unsubsidised job outcomes (a 72% success rate)
• 1,200 qualifications for beneficiaries (120% success rate or an average of 1.2 per person).

This is now scope and demand to replicate and develop this model through out Wales but further developments are often hindered or prevented by a lack of funding. The EDT are asked to ensure that future remit letters to ELWa and WDA include the provision to ensure that funding from these bodies can be directed to the development of LMIs Social Enterprise The Welsh Assembly Government Social Enterprise Action Plan has recognised the role Social Enterprise in the economic development of Wales, and provided illustrations of the range of social enterprise activity that already exists. There is a potential role for many more voluntary organisations to contribute to the economic regeneration of Wales by:

• Creating/sustaining/expanding micro-economic activities at a local level which are not dependant on global factors;
• creating opportunities and 'stepping stone’ activities for those who are currently economically inactive;
• developing new ways of delivering community and public services.

Many voluntary organisations have synergy and are compatible with this definition, and could if they wished develop aspects of their activities, which generate new types of income and employment. The economic impact of, for example, every voluntary organisation (on average) employing just one additional person within ten years would equate to 70% of the job creation target of the entire Objective One programme.The publication of the Social Enterprise Action Plan was, therefore, a significant development. It raised the profile of social enterprises, and the contribution they make to the economy, and to community and social well being in Wales. The recognition that social enterprise takes many forms, and the commitment to ensuring appropriate support for organisations through their different stages of development - as potential, emerging and actual enterprises - was welcomed. Future support will need to ensure that existing support services - both mainstream business services and voluntary and community sector services - are equipped to help organisations make the transition; and that additional specialist services are firmly engaged with the existing services to minimise duplication and to ensure integration. Priorities should include:

• Supporting voluntary organisations wishing to make the transition of adopting social enterprise methodologies;
• Supporting those voluntary organisations who want to diversify their existing funding and activity or set up new social enterprises by ensuring that there are programmes of training, and mentoring,
• Assisting the development of new forms of social enterprises linked to Intermediate Labour Market Initiatives, with particular emphasis of decreasing economic inactivity.
• Ensuring that support for these types of actions are in the remit letters of relevant ASPBs

Community development and regenerationCommunity regeneration is the process of repairing, rejuvenating or recreating the fabric of communities that are deemed to be disadvantaged or in decline and may involve regeneration of physical, economic or social structures. Its aim is to create communities in which people have the opportunity to enjoy a pleasant, safe and secure environment, in which they can both contribute to and benefit from a healthy economy.In the past, many of the initiatives to regenerate disadvantaged communities have treated physical, economic and social regeneration as separate and unconnected activities, which are to be carried out by agencies not with, but on behalf of, communities. However, it is now widely recognised that community regeneration will only be successful and sustainable where communities themselves, and their organisations, are active participants in the process. Community regeneration requires the involvement of many agencies, but without the critical piece of the jigsaw - the participation of communities, individuals and their organisations - regeneration and more importantly measures to reduce economic inactivity is unlikely to be successful and sustainable. Community development and regeneration can help tackle economic activity in a number of ways. Firstly, community development provides opportunities for people to get actively involved in their community. As with volunteering, community involvement can build confidence; enable people to develop new skills, or maintain existing skills; and make new links and contacts. For many people, community involvement can be the first step to formal training or re-training, and can help people overcome the "experience gap" that can make it so difficult to compete successfully in the job market.Secondly, it can create "brokerage" links between employment and training opportunities, and local people. There are examples of local Communities First Partnerships making links with major local employers to encourage recruitment from within their area, and to promote job opportunities to local people.Finally, it can create community projects and enterprises business that both remove barriers to economic activity, and provide direct opportunities for employment and training. Penywaun Enterprise Partnership, for example, is a community led regeneration project established over 10 years ago in the Cynon Valley. It runs the Cana Centre and other projects working with different groups on the estate, creating both jobs and training opportunities. Other community businesses are providing childcare services that help people entering or returning to employment. For example, Tiddleywinks is a community-owned social enterprise business in Ystalyfera, in the Upper Swansea Valley. It has been in business for 8 years, employs 16 staff, provides childcare for children aged from 6 weeks to 13 years (including day nursery, holiday care, breakfast club, after-school club) and provides transport to and from 8 local schools. The comprehensive nature of its childcare services removes significant barriers to economic activity. ConclusionWCVA invites the EDC to recognise the overall valuable contribution that the voluntary sector in Wales makes to tackling of economic inactivity, and to include in its conclusions recommendations to increase this contribution. These could include:

• Maintaining existing Assembly Government schemes to promote and support volunteering, and considering the scope to extend these further to support projects specifically targeting economically inactive people as volunteers.
• Inviting the Department of Work and Pensions to consider the scope for a programme to support projects targeting economically inactive people as volunteers.
• Ensuring that funding is available to extend and replicate successful multi-agency Labour Market Initiatives able to decrease economic inactivity through employment and training in social enterprises and voluntary organisations.
• Providing support for those voluntary organisations that want to diversify their existing funding and activity or set up new social enterprises by ensuring that there are programmes of training, advice and mentoring.
• Continuing and extending support for community projects that directly involve people in community activity that increases their skills, motivation and confidence; that help to broker links between local people and job and training opportunities; and that create community projects and enterprises that both remove barriers to economic activity, and provide direct opportunities for employment and training.
• Ensuring that support for these types of actions are in the remit letters of relevant ASPBs.