Professionalising welfare-to-work is important

Historically the welfare-to-work industry, which employs in the region of 20,000 people, has had no occupational standards or designated Sector Skills Council, no required entry qualifications or recognised professional qualifications. Very little of the training for the employability sector’s workforce that has been delivered has been externally accredited.

Various pieces of research highlighted the need to improve the industry’s approach to training and developing its people. It was recognised that the ability of welfare to work providers in the independent and college sectors to attract and retain the best people, who were able to work at a confident and competent level, providing personalised and expert support was going to be critical to the success of the Work Programme. To achieve this, it was vital that the status of practitioners such as the personal advisor role was enhanced through the provision of a framework of professional qualifications and clear career pathways.

In 2010 the sector agreed to address what professional standards and qualifications were required within a flexible framework, which focused on improved productivity, reduced attrition and the attraction of high calibre people into the sector. Sector employers came together to create the PoWER (Professionalisation of Welfare to Work Expert Reference) Group. The PoWER group, chaired by Janette Faherty OBE of Avanta, consisted of AELP, DWP prime contractors, subcontractors, private and voluntary sector employers, plus Inclusion and ERSA.

PoWER created a project group, funded by PoWER members, specifically to look at the qualifications and the creation of an overarching professional body for the industry. Working closely with the awarding body EDI, the project team were able to use the flexibilities of the QCF to design and develop a flexible and accessible framework of qualifications closely aligned to job roles across the sector.

Too often the processes involved in bringing qualifications to market is unwieldy and time consuming.”

Many of the units came from existing QCF qualifications in customer service, recruitment, sales and information advice and guidance with the addition of two new sector specific units, Understanding the Employment Related Services Sector and Sustaining an Employment Outcome, which were written by members of the project group.

The level 3 award, Certificate and Diploma in Employment Related Services, which together with an Advanced Apprenticeship make up the Employment Related Services Qualification Framework, has been developed for people working with the unemployed, supporting them to progress into sustainable employment. The suite of qualifications allows the industry to set the bar on the high standards expected from employees and the quality service they provide, whilst giving individuals an opportunity to be able to accredit the skills, knowledge and experience they have gained against national standards. By offering clear career paths with greater opportunities for progression, the industry expects to enhance performance and motivation amongst its workforce leading to greater productivity and uplifts in the number of sustained job outcomes achieved.

The take-up of new qualifications for those working in the employability industry is gathering momentum. Over 25 providers have now been approved to offer the qualifications and the first candidate to complete the Diploma is waiting to be awarded their certificate.

The whole of the FE and skills sector can learn from the success of the PoWER group. They have demonstrated how effectively employers can work together to develop standards and qualifications that really meet the needs of their businesses. A shared drive and passion enabled the new suite of qualifications and Advanced Apprenticeship framework to be developed from scratch in less than six months which is a remarkable achievement.

Too often the processes involved in bringing qualifications to market is unwieldy and time consuming, but by having a clear vision of what they wanted to achieve and working closely with both EDI and Skills for Justice, the PoWER group has been able to overcome barriers and found ways of fast tracking the accreditation process.

The journey is not over. Partner organisations working together generated a successful bid to UKCES for funding to support the establishment of the Institute for Employability Professionals and secured further success in a tender to NAS for Higher Apprenticeship Funding; the latter was led by AELP member and leading Higher Apprentice training provider Babington Business College.

Stella Turner is AELP’s qualifications and curriculum manager and a member of the PoWER project group

Promoting the positive in Functional Skills

Learners like them, teachers like them, employers like them. This is the message we are hearing from the field. Of course, not all teachers and not all providers are on board, but those that have grasped that the Functional Skills qualifications offer learners a better deal are beginning to develop a sense of excitement. But, there are a number of issues blocking the successful implementation of the strategy.

Ten years after the launch of the Skills for Life strategy, NIACE embarked on its Inquiry into adult numeracy, and subsequently the Inquiry into adult literacy. We were pleased that our Inquiry fed directly into the Department’s own Review of Skills for Life.

One of the major areas of discussion in this closed group was the difficulties with the ‘old’ Skills for Life qualifications and the gradual emergence of the GCSE as the ‘gold standard’ and Functional Skills as the English and Maths element.

Over the past couple of weeks, it has been made clear that enrolments for standalone Skills for Life (Level 1 – Level 2) qualifications, will cease after August 31. New Functional Skills (English and maths) and GCSE equivalents will be the qualifications for adult learners with literacy and numeracy needs, alongside ‘standalone, unitised awards’ which are still being scoped, while Skills for Life Entry Level qualifications will stay in the short term.

Let’s get out there, with some real voices of some real learners and teachers, and promote all the positive aspects of Functional Skills.”

Functional Skills provide a single ladder of achievement from Entry Level to Level 2, for all learners in all sectors. They are a compulsory element in the three qualification routes for young people from 14 to 19; in Diploma and Foundation Learning Tier, and an option to GCSEs, within apprenticeships. They are also offered as stand-alone qualifications at Entry Level, Level 1 and Level 2.

NIACE believes that Functional Skills will support adults to undertake the realistic basic skills demands of everyday life, developing, as we believe they do, the ability to apply skills to other settings. With some more work to address the needs of those learners with the poorest skills, at Entry Level, they will offer better quality literacy and numeracy skills to adults.

Training providers developing their ability to offer Functional Skills within apprenticeships and employers taking on the apprentices tell us that they fit well as an embedded element of vocational courses; the emphasis on transferability was valued by providers.

There are challenges – it may take longer for learners to achieve and Functional Skills will be more challenging for all learners and especially at lower levels. The assessment is more rigorous and includes writing as well as speaking and listening – this will come as very good news to teachers who have been unhappy with the partial nature of the Skills for Life qualifications, with its lack of emphasis on speaking and listening, and on writing.

We cannot ignore the challenges and we are hopeful all the agencies supporting adult learners will work together to make the transition as effective as possible. We need a strategic CPD offer; we need a clear idea of which resources are helpful and have proven worth and impact rather than those that have just been brought (too) hastily to the market to address a perceived need; we need to consider if we require Functional Skills-specific Initial and Diagnostic Assessment tools. And we need clear guidance on how we manage the additional time and resources that delivering Functional Skills will require.

But most of all, the message coming out loud and clear is – why aren’t Functional Skills being sold to employers, providers, teachers and learners?  Let’s get out there, with some real voices of some real learners and teachers, and promote all the positive aspects of Functional Skills.

We recognise that Functional Skills provide learners with the ability to think and act independently at home and in the workplace – but we have to grasp the nettle right now if we really want this to work.

 

By Carol Taylor

Reflecting on National Apprenticeship Week

Last year, I launched National Apprenticeship Week 2011 by saying that I wanted to create the biggest and best apprenticeships programme in our country’s history.

Thanks to record Government investment, the commitment of British firms, tough measures to drive up standards and the hard work and dedication of FE & Skills professionals, I’m proud to say that we have achieved that aim.

One year on, as we approached National Apprenticeship Week 2012, new official statistics revealed a record numbers of apprenticeship starts – a 63.5% increase on 2009/10 , and outstanding success rates and growth across all regions and sectors.

The NAO also recognised the progress we’ve made, with their Assessment of Adult Apprenticeships report highlighting the extraordinary economic benefits of apprenticeships. It found that for every £1 of Government spending on apprenticeships £18 is generated for the wider economy.

National Apprenticeship Week is a great opportunity to take time to celebrate the countless achievements of learners and employers over the past year. This year, as always, I was extremely impressed by the stories I hear and the focus and dedication of everyone I meet.

However, there is more we can, and will, do to drive up quality, open up more opportunities for young people and put vocational accomplishment on an equal footing to academic achievement.

To ensure that the growth in apprenticeship numbers we have delivered is sustainable, quality must match quantity so that employers and learners know that every apprenticeship delivers world class training.

We are working with the SFA and other partners to raise the bar on quality, recognise excellence and drive out poor performance. We have tightened guidance for those developing apprenticeships and training providers that do not meet the high standards learners deserve are having their funding withdrawn. An employer-led review into apprenticeship standards, to report in late spring 2012, will indentify best practice and help ensure that government continues to maximise the impact of public investment in apprenticeships.

A zero tolerance approach to unnecessary red tape, alongside new financial incentives, will enable more SMEs to take advantage of the competitive edge that having apprentices can bring to a company. Businesses with fewer than 50 employees can now apply for a £1,500 incentive payment when they take on their first young apprentice. In addition to this, a review – led by social entrepreneur and jeweller Jason Holt – will examine what more can be done to help SMEs take on apprentices.

The Prime Minister officially opened the second round of bidding for the Higher Apprenticeships Fund during Apprenticehip Week. With 19,000 higher apprenticeships already created as a result of the first round, this latest injection of funding will enable even more apprentices to develop their talents to degree level and beyond, as well as giving firms in sectors such as advanced manufacturing, information technology and engineering the hi-tech skills they need to grow. The fund is a crucial step towards placing vocational learning on a par with academic study, giving bright youngsters the opportunity to work with and build the most dynamic firms in the country.

Looking forward to National Apprenticeship Week 2013, I strongly believe that we will continue to build on our achievements to-date, putting apprenticeships back where they belong – at the heart of our system of education and training.

John Hayes, Minister of State for Further Education, Skills and Lifelong Learning

Sir Peter Rogers, special advisor to the Mayor of London

Sir Peter Rogers recognised the value of vocational learning at an early age. At 18, having researched possible routes into accountancy – seven years with a degree, four without – he decided to leave school and train on the job.

Brought up in Wolverhampton, Rogers, now Boris Johnson’s economic development advisor, attended Wednesfield Grammar School, and as one of the high fliers in his year group was expected to go to university.  Breaking the news to his working class parents – a furnaceman and a shop assistant – who already had made “big sacrifices” to support him in his education, was hard, but made perfect sense at the time.

“I guess I was quite self-aware,” he recalls. “I knew the sort of things that I was good at, the sort of things I was interested in and recognised the path that would get me to a reasonably good salary pretty quickly, through hard work and application.”

It was a move that paid off. Rogers spent 16 years in accountancy and financial roles in local authorities, before moving to a national transport operator, where he was involved with trade union negotiations as part of a management buyout.

In 1996, he joined Westminster Council, where he became chief executive, before moving to the London Development Agency (LDA), where he was awarded a knighthood for his work, something he still finds “embarrassing.”

Much of the hard work was down to people like Simon Milton (Johnson’s former chief of staff who died last year) and real partnership working between public servants and politicians, he says. “To be honest I really don’t know why I got it,” he says, modestly. “You start looking round at people who deserve it and I honestly couldn’t work out why I got it.”

While he is passionate about his home city of Wolverhampton (where he still has a home), and his beloved football team “The Wolves,” Rogers has a soft spot for London. In fact he came out of retirement to take on his current role (his second retirement, having bowed out of Westminister Council in 2008).

And he is clearly proud of the Greater London Authority’s (GLA) work on vocational learning. Since the launch of its apprenticeship campaign in 2010, an average of around 5,000 new vacancies have been created each month, he says, and he is confident the GLA can reach its target of 100,000 by the end of this year. Around 2,000 of those opportunities have been created within the GLC itself or through its procurement process with organisations like Transport for London (TfL) and Crossrail. The GLA is also working hard to increase take up amongst small and medium sized businesses to take on apprentices, he says.

Last month, Johnson announced £177 million funding towards long-term improvements to regenerate high streets across London in a bid to create jobs and stimulate economic growth – on top of 70 million pledged to help repair and rebuild town centres damaged in last summer’s riots.

It’s a simple challenge which is about communities taking care of their own futures by becoming involved in their own quality of life issues.”

While this represents an opportunity for London colleges, many will need to up their game and become “a lot more commercial,” says Rogers. “There is a challenge for FE to be much more aware of the business opportunities, the business dynamics and the community dynamics… but they need to actually start talking and competing with each other about the quality of their work, the quality of their product and the sustainability of what they’re achieving.”

Rogers advocates a system (similar to that proposed by the universities’ minister David Willetts) where colleges are “an open and transparent book,” publishing information about how many of their former learners move into employment and what exactly they go on to do.

He bats off the suggestion that the demise of the regional development agencies (RDAs) as a result of the Coalition government’s quango bonfire, could make this difficult for colleges. Things are tough for everyone involved in education and training at the moment, he says. “I think there’s a significant difference in the last few years because there was a lot of money in the system until the crash in 2008. There was lots of money, people could basically self generate work and self generate their own importance. Those days have gone, every scrap of public sector money now is going to be based on value created and it’s going to have to be demonstrated.”

And he sidesteps the topic of the London Skills and Employment Board (LSEB) the employer led group, chaired by Johnson, responsible for improving adult skills and employment in the capital, which seemed to inexplicably fade away about 18 months ago.

After the abolition of RDAs in June 2010, the government announced plans for the creation of local enterprise partnerships (locally owned partnerships between local authorities and businesses that aim to create local jobs and drive economic growth). Plans for London’s LEP, which will be chaired by Johnson and Harvey McGrath – chairman of the Prudential  – are well underway, and while Rogers admits the demise of the LSEB has left a gap, he will not be drawn on the reasons it seemed to end too suddenly.

Rogers is a big fan of the Big Society approach to rebuilding and regenerating communities, which he says is at the heart of Team London, the GLC new volunteering programme aimed at cutting crime and creating opportunities for young people. “It’s a simple challenge which is about communities taking care of their own futures by becoming involved in their own quality of life issues,” he says. “And if that means kids go out on the streets and pick up litter to make the place look better so the shops actually attract people, if it means they work with disadvantaged kids who can’t read by becoming readers, if it means that businesses and lucky graduates who are in jobs come back and either coach disadvantaged kids or help business by mentoring business…I think those are the sort of new dynamics, and I think colleges could be at the heart of that.”

But with youth unemployment at all all-time high, isn’t this just an excuse to get people to work for nothing, I ask him. “Is there anything wrong with that?” he fires back “How many people in January say ‘I’m going to lose weight, I’ll go to the gym four times a week’ – how many do it?” he says. “Not many. The ones that do have got an attitude about persistence, diligence and they put the discipline in to make it happen. It’s exactly the same as getting up five days a week and going to work..it’s about discipline, it’s about turning up, it’s about doing the work while you’re there and seeing the results – and it’s perfectly transferable into the workplace.”

He seems convinced that volunteering can unlock the potential of young people, creating the “rigour and discipline” necessary to get even hardest to reach into work.  But who exactly will run these community projects? While he has all the jargon – “champions,” “visible ambassadors” and “community leaders” – there are no firm answers for exactly who these people might be.

Having already made two comebacks from retirement, Rogers is relaxed about his future career plans. He’ll certainly be sticking around until the mayoral elections in May, the outcome of which will determine whether his contract at GLC is renewed. But despite a long and distinguished career in local government, his biggest ambition is surprisingly humble. “I’d like The Wolves to stay in the premier league – you can tell I’m a romantic, can’t you?”

Apprenticeships inquiry to hold first evidence session next week

The first evidence session on an inquiry into apprenticeships will be held this week.

On Thursday, the Business, Innovation and Skills (BIS) Select Committee will welcome experts from different stages of the apprenticeship programme.

Denis A Hird, chief executive of JTL Training, Alex Jackman, senior policy officer for the Forum of Private Business, and Graham Hoyle, chief executive of the Association of Employment and Learning Providers (AELP), will all give evidence on the day.

The session will be open to the public on a first come, first served basis, in The Grimond Room, Portcullis House, at 11am.

The Committee had already previously announced that it will be visiting Sheffield as part of its inquiry.

They will hold a number of formal oral evidence sessions between March 5-6 with employers who promote or offer apprenticeships, as well as learners currently enrolled on apprenticeship schemes.

Adrian Bailey MP, chairman of the BIS Select Committee, said: “Sheffield is home to a number of significant organisations and employers offering innovative and meaningful apprenticeship schemes.

“This is something that is being replicated right across the UK and is something the Committee wants to experience first-hand.

“Visiting Sheffield will allow the Committee to take evidence from a wide range of interested parties. This is a hugely important inquiry; apprenticeships are vital to boosting employment and growth throughout the country.

“The Committee feels it is vital that apprenticeships are structured in such a way so as to maximise their potential and to provide young people in the UK with requisite skills for future success.”

The deadline for written evidence to be submitted to the BIS Select Committee has closed.

Families tsar to step down amid fraud allegations

Emma Harrison is to step down from her role as the Prime Minister’s “families tsar” following allegations of fraud at her firm A4e.

In a statement published by the BBC on Thursday, Ms Harrison said: “I have asked to step aside from my voluntary role as Family Champion as I do not want the current media environment to distract from the very important work with troubled families.

“I remain passionate about helping troubled families and I am grateful for the opportunity to contribute in an area where I have been active for many years.”

The government has been urged by Margaret Hodge MP, chairwoman of the Public Accounts Committee, to suspend its welfare-to-work contracts with A4e.

It came after it was revealed police were investigating ‘irregularities’ at the firm, which A4e say dates back to 2010.

Four employees were arrested in relation to the allegation and released on bail until mid-March.

Andrew Dutton, CEO of the A4e Group, said: “A4e has zero tolerance towards fraud, and any instance of fraudulent or otherwise illegal activity is completely unacceptable.

“We take our responsibility very seriously and we are committed to using taxpayer’s money effectively and efficiently to deliver the best services to the public.”

The employment agency A4e, which has five main contracts to deliver the Work Programme, has come under fire from MPs because of its poor track record and large shareholder dividends.

Mr Dutton admitted in a session with the Public Accounts Committee that the UK turnover for A4e in 2011, estimated to be between £160 million and £180 million, came solely from government contracts.

Ms Harrison received 87 per cent of the £11 million paid in dividends to the company’s five shareholders last year.

Mrs Hodge criticised the Department for Work and Pensions (DWP) during the session for not considering the past performance of firms, including A4e, when managing the contract process.

“It seemed rather surprising to me that in managing the contract process, you did not have regard to the past performance of contractors,” Mrs Hodge said.

She later added that A4e’s past performance was “abysmal” during the Pathways to Work scheme.

“If you, as a sensible person, were letting a contract in your home for anything or if you were a private business, you would look at past performance before you decided,” she added.

Subcontractors of A4e on the Work Programme include Havering College of Further and Higher Education, Accrington & Rossendale College, Blackpool and Fylde College, Liverpool Community College, Highbury College, among others.

Increasing NEETs linked to EMA cut

Rising numbers of young people not in education, employment or training (NEET) are being linked to the axing of the education maintenance allowance (EMA).

Latest data, released yesterday by the Department for Education (DfE), shows the proportion of 16-18 year-olds classified as being NEET increased by one per cent to 9.6 per cent in the fourth quarter of 2011 (178,000), compared to 2010 (162,000).

The DfE in their statistical release say the increase is not “statistically significant” and instead point to the decline of 16-18 year-olds who are in work – down from 47 per cent to 40 per cent – as being noteworthy.

However, the Save EMA campaign have compiled analysis which shows a decline in NEET statistics in every Quarter 4 for 16-18 year-olds after the allowance’s introduction in 2004, before a rise last year – after the EMA was scrapped.

The scheme was replaced by the £180 million Bursary Fund last year which ministers say is “more targeted” than the EMA.

James Mills, head of Save EMA, said:  “The sad news that the number of NEETs is up is further proof that scrapping the EMA was a massive mistake by this government. Previous Q4 figures have shown a steady decline in the number of NEETs and are indicative proof that EMA worked. By scrapping EMA this government is creating a lost generation of young people and these figures are proof that there is now a growing invisible army of teenagers who have been cut loose by this government’s decision to scrap EMA.”

Save EMA say the importance of Quarter 4 data is it shows those teenagers who have not enrolled into further education after September of that year. They also admit that NEET figures could be caused by a “flagging” economy.

However, when coupled with the Association of Colleges’ (AoC) survey in October, which showed enrolment at 49 per cent of colleges was down, and last month’s unemployment figures, showing an increase in 16-17 year old unemployment, Save EMA say “these NEET figures are further indicative proof that scrapping EMA was the wrong decision.”

Meanwhile, the figures also show the proportion of 19-24-year-old NEETs decreased by 0.1 per cent – but the figure rose from 777,000 to 780,000.

The proportion for 16-24-year-old NEETs increased by 0.3 per cent – from 939,000 to 958,000.

However, the government is determined to tackle the problem.

A government spokesperson said: “The number of young people who are not in education, employment or training has been too high for too long – we are determined to bring the numbers down.

“We are making sure young people have the skills they need to get ready for work – creating the biggest apprenticeships programme our country has ever seen and overhauling vocational education, so all employers can be confident about the rigour of our qualifications.”

Colleges, are you ready for the raising of the participation age?

Increasing the minimum age at which young people in England can leave education or training is an unsettling prospect.

No-one can predict with absolute certainty how the further education (FE) sector will adapt to the implementation of mandatory participation up to the age of 17 next year.

The Association of Colleges (AoC) held an event in Paddington last week to give advice on how FE colleges could attract more students during the recruitment period and prepare for increased competition from schools.

Julian Gravatt, assistant chief executive (research and development) at the AoC, said colleges should be preparing an offer which will differentiate themselves from rival learning providers.

“You need to devise an appropriate response, taking into account not only capacity, but also local need, who else is around and doing things and also what the available funds are – what is actually possible,” Mr Gravatt said.

Raising the participation age will mean that teenagers aged between 16 and 18 are required, by law, to undertake either 534 hours of full-time education, an apprenticeship, full-time work or volunteering supplemented with 280 hours of part-time education.

Under the reforms, colleges and schools will have a duty to monitor attendance and employers will need to ensure training is being delivered appropriately to the learner.

Mr Gravatt warned that the implementation of the policy could have a negative impact on the funding allocated for each student.

“After having several years of the 16-18 education budget going up and us as a sector using that very well, the way in which we will get increased numbers in the next few years is partly at the expense of making some quite significant cuts in terms of funding for students,” he said.

“It’s a policy with desirable ends but is coming in a financial environment which is difficult.”

Mr Gravatt said the reform was being used by government as a solution to youth unemployment and the number of people not in education, employment and training (NEET).

“Whatever the law says, or whatever policy used to say, whatever you do think or used to think, the number one issue is tackling youth unemployment,” he said.

“A college can either engage with that and do it well, or it may feel actually others will do it better. It’s a choice, but given the priority it’s an issue and you should see the full participation for 16-17 year-olds within that context at the moment.”

David Russell, director for participation and vocational education at the Department for Education (DfE), appeared to agree with Mr Gravatt and emphasised the government’s interest not only in tackling NEETs, but also those currently in jobs without training.

“We also know that a very small number of 16 and 17 year-olds in jobs without training, although there are a very small number of them, they only have marginally better outcomes in the long run than those who are NEET,” Mr Russell said.

“So we are almost as concerned about those in jobs without training.”

David Wood, principal and chief executive of Lancaster & Morecambe College, said raising the participation age was creating a great deal of fuss over a very small proportion of learners.

“Some of this seems to be much ado about nothing,” Mr Wood said.

“It’s a very small group of people which we are chasing and at one level EMA is being removed, the fees for higher education have gone up incredibly high, local authorities are losing their authority, academies are increasing competition. All those things seem to be challenging the ability to tackle this group head on.”

Mr Wood agreed however that competition from schools would continue to be a huge issue for FE colleges.

“I’ve got eight schools around me, for 11-18’s, who won’t let me in. The root of the NEET problem is in poor information and guidance I think,” he said.

“So even though we’ve got lots of people participating, a lot of them are in the wrong courses and we’ll pay for that through their lives.”

He added: “What I don’t want to be doing, is fighting other providers for those young people.

“What I see at the moment is a fair degree of anarchy and chaos about to emerge for a very small group of people.”

Jon Thorn, head of business development at the National Apprenticeship Service (NAS), added that apprenticeships shouldn’t be seen as a ‘one size fits all’ solution to the problem.

He said: “There’s always a risk around a programme which is doing well that it does become a solution for every problem or challenge that there might be.”

It’s a policy with desirable ends but is coming in a financial environment which is difficult.”

Corrienne Peasgood, deputy principal of City College Norwich, said simply creating more places for students won’t be enough to raise the level of participation either.

She said: “Between us, I really do believe that we can find enough opportunities for full participation at 16 and then later at 17, but is that enough? I don’t think we’re in the field of dreams territory, that we can be sure that if we build it, they can come.”

Raising the participation age is likely to cause some problems for the FE sector, but Fiona McMillan OBE, president of the AoC and principal of Bridgwater College, said it would help young people in the long run.

“We all know that not being in education or training beyond 16 means you are considerably more likely to experience being out of work, more likely to have a criminal record, more likely to suffer from low self-esteem and from bouts of depression,” she said.

“There are really strong social, personal and economic reasons for looking at extending the time that young people are in employment, and in training, and are gaining qualifications and valuable experience.”

FE Week investigates: The Youth Contract for 16-17 year-olds

The Deputy Prime Minister has unveiled  a new scheme to try and tackle the “ticking time bomb” of 16 and 17 year-olds who are not in education, employment or training (NEET).

Nick Clegg announced a £126 million allocation on Tuesday to help more than 55,000 teenagers with no GCSES at grade A* to C.

The new scheme is part of the youth contract announced last November and will use a ‘black-box’ payment-by-results scheme for businesses and charities.

Mr Clegg, speaking at the Groundwork Hub in south east London, said: “Sitting at home with nothing to do when you’re so young can knock the stuffing out of you for years.

“It is a tragedy for the young people involved – a ticking time bomb for the economy and our society as a whole.

“This problem isn’t new, but in the current economic climate we urgently need to step up efforts to ensure some of our most troubled teenagers have the skills, confidence and opportunities to succeed.”

The announcement follows record levels of youth unemployment, now at 1.04 million, as well as a significant rise in the number of people not in employment, education or training (NEET), released by the Department for Education (DfE) last week.

Graham Hoyle, chief executive of the Association of Employment and Learning Providers (AELP), said: “This is what AELP has been pressing for over many months since it became apparent that youth unemployment was on the increase.

“We are pleased that the DfE has listened to our calls that their NEET programmes should offer training providers maximum flexibility in offering personalised solutions to individuals to overcome the barriers that prevent them from securing a job or further learning.

“For too long, government funded schemes for 16 to 18 year-olds have been too tightly linked to securing a qualification, when first landing a job as a result of a scheme might be a better outcome for the individual.”

The new scheme, which will offer firms a maximum of £2,200 for helping a young person back into education, employment or training, has been designed to try and support teenagers who are at the greatest risk of long-term disengagement.

Businesses and charities will receive an initial payment for taking on a young person, followed by payments based on a successful outcome of re-engagement and sustained re-engagement of at least five months.

A document detailing the contract information for the scheme, written by the Young People’s Learning Agency (YPLA), DfE and Department for Work and Pensions (DWP,) shows that an initial payment will will only be made once a young person has “an effective and clear action plan” for re-engagement.

The initial payment will be no more than 20 per cent of the ‘unit cost’ for any young person starting the programme before September 2013, reducing to 10 per cent for any learner accepted thereafter.

A re-engagement payment, made up of no more than than 30 per cent of the ‘unit cost’, will be issued for positive outcomes including full-time education or training, participation in an apprenticeship or a job with accredited training, or attending  part-time education with re-engagement provision  for at least three months.

Payments for sustained outcomes, which start at 50 per cent of the ‘unit cost’ but rise to 60 per cent after Septermber 2013, will be given out once a young person has completed at least five months of their chosen education or training.

The document suggests the support could  be personal, one to one help and advice, specialist support to keep young people safe and well, or free from drugs or alcohol.

Neil Carberry, director for employment and skills policy at CBI, said:  “This announcement is a step forward, but we remain concerned that this programme does not go far enough.

“We still need to see urgent action in schools to minimise the risk of young people becoming NEETs in the first place, through better careers and study advice and improved business-school links.

“It is right that private and third-sector providers are tasked with delivering this initiative on a payment-by-results basis, but they will need to work closely with local authorities, schools and other public agencies to make sure the scheme delivers.”

The document says organisations will need to set out a detailed pricing model over the lifetime of the contract once they are invited to submit a bid at the invitation to tender (ITT) stage.

The deadline for submitting the pre-qualification questionnaire (PQQ) is March 5.

The ITT document will then be sent to shortlisted organisations by March 20, with full tender submissions to the YPLA closing on May 02.

The document states each bid will need to demonstrate the organisation’s ability to deliver on the programme, as well as a detailed track record of relevant successful experience.

Children and Young People’s Minister Tim Loughton said: “Providers know how best to support young people back into education training and employment.

“We are looking forward to receiving some innovative ideas that really work from experienced organisations in all sectors.”

Contract amounts in each region will be proportionate to the amount of NEETs calculated to be in each area during 2010.

The government has emphasised that successful organisations will also need to sign a declaration confirming they will not apply for funds through the programme if they are receiving a similar type of provision elsewhere.