Introduction

The European Social Fund (ESF) was set up to improve employment opportunities in the European Union (EU) and thereby raise standards of living. The Department for Work and Pensions is the Managing Authority (MA) of ESF funds in England.

The ESF 2014 to 2020 Operational Programme – part of the European Structural and Investment Funds (ESIF) Growth Programme for England – aimed to deliver against priorities to increase labour market participation, promote social inclusion and develop the skills of the potential and existing workforce^{[footnote 1]}. As set out in the UK’s Withdrawal Agreement with the EU, the ESF programme continued to invest in projects after the transition period for leaving the EU ended on 31 December 2020, but all funding needed to finish by the end of 2023^{[footnote 2]}.

The programme is structured around 5 Priority Axes (PAs) based on the EU’s Thematic Objectives. This evaluation focuses on 3 of these:

• PA1: Inclusive Labour Markets
• PA2: Skills for Growth
• PA4: COVID-19 response

PAs are sub-divided into Investment Priorities (IPs) relating to elements of the programme which Investment Priorities directly benefit individuals and form the basis for evaluation:

• IP 1.1: access to employment for jobseekers and inactive people
• IP 1.2: sustainable integration into the labour market of young people, through ESF funding
• IP 1.3: sustainable integration into the labour market of young people, through Youth Employment Initiative (YEI) funding
• IP 1.4: active inclusion
• IP 1.5: community-led local development strategies
• IP 2.1: increasing the skills of the current workforce, enhancing equal access to lifelong learning
• IP 4.1: addressing the digital divide, by providing access to information and services, through digital technologies

Provision for the 2014-2020 Operational Programme was delivered through 4 Co-Financing Organisations, the Education and Skills Funding Agency (ESFA), DWP, National Lottery Community Fund (NLCF); His Majesty’s Prison and Probation Services (HMPPS), Greater London Authority acting as an intermediary body with other organisations such as Greater Manchester Combined Authority having similar status as well as Direct Providers (i.e. projects which bid directly to the Managing Authority).

Research aims

The DWP commissioned IFF Research to conduct a study exploring the experiences of people in England who had recently left work-related training courses funded through the ESF, including the Youth Employment Initiative (YEI). Specifically, the research sought to collect information about participants’ situation on entry to and 6 months after they had left ESF provision (to determine long-term outcomes), and participant views on the provision. This information was also needed to meet European Commission requirements to supply Long-Term Results Indicators as set out in the Operational Programme.

The research is part of a wider evaluation programme to provide evidence of the impact of the 2014 to 2020 ESF in England. It is the second survey exploring the characteristics, experiences and employment statuses of ESF and YEI leavers 6 months after leaving provision (the first survey covered the 2016 to 2019 cohort of leavers).

Methodology

The research involved a large-scale quantitative survey with participants who left the ESF and YEI provision between June 2021 and May 2023. The survey took a census approach, contacting all participants whose details were provided. Leavers were contacted at least 6 months after leaving provision, with all fieldwork across the pilot and 9 mainstage waves taking place between December 2021 and December 2023. In total, 11,592 surveys were completed with programme leavers, with an average response rate of 15%. The majority of these were completed via telephone interview, a small proportion were completed online. The data was then weighted against the total ESF leavers population for the period concerned.

Summary of findings

A wide variety of provision types were offered by Co-Financing Organisations via the funding routes described above, from courses designed to reduce the risk of redundancy to those tackling the barriers to work specifically faced by current, or ex-offenders. With the study covering a wide degree of this provision, any comparisons of outcomes across different types of provision should be made in this context.

Key groups and demographics

Approximately 380,000 individuals completed ESF provision and 14,000 completed YEI provision between June 2021 and May 2023.

Investment Priorities (IPs) 1.4 (focused on active inclusion), 1.1 (focused on access to employment), and 2.1 (focused on lifelong learning) accounted for the greatest proportions of leavers: 32%, 28% and 26%, respectively.

The 2 most prominent types of delivery in the sample were the ESFA CFO accounting for 43% of participants and Direct Providers accounting for 35%.

Each CFO had a corresponding focus by IP(s). NLCF and HMPPS exclusively focused on IP 1.4^{[footnote 3]}. Three quarters (75%) of DWP leavers fell under IP 1.1, with the other quarter under IP 1.4. In contrast Direct Providers and the ESFA had a broader mix, although Direct Providers mostly delivered under IP 1.1 (40%) and ESFA under IP 2.1 (48%).

This relationship means that many of the findings by CFO are likely to be related to differences by IP and their target audiences.

Nearly 3-quarters (72%) of participants were classified as having a labour market disadvantage, and half (50%) had a disability or long-term health condition.

Labour market status on entry

Nearly half (49%) of participants were unemployed and looking for work and a quarter (25%) were economically inactive on entry to the programme. The remaining quarter (25%) were in employment.

In line with the provision’s focus on NEET individuals, just over a quarter (26%) of YEI participants were inactive on entry to their course/programme, and almost all others^{[footnote 4]} were unemployed (73%).

The profile of labour market status within IP and CFO aligned with the focus of each priority:

• most IP 2.1 participants (94%) were employed on entry, in line with the priority’s objective to address the basic skills and increase the skills levels of individuals in work; this group made up the majority of individuals employed. Employment rates across all other IPs were extremely low.
• owing to the ESFA having a large proportion of participants under IP 2.1, this was the only CFO with a considerable proportion of participants employed on entry (47%), NLCF participants were the most likely to be economically inactive on programme entry (57%).

Most (83%) participants who were employed on entry were working for an employer in a paid role. The vast majority (92%) of participants in work on entry were “fully employed” i.e. they were working full time or working part time and did not want to be working full time. Only 7% were “under-employed” i.e. they were working part time but wanted to be full time.

Four-fifths (80%) of participants working for an employer were in stable employment, i.e. they were on a permanent or open-ended contract. Almost one in ten (9%) were in ‘precarious employment’, i.e. temporary employment or that with a work contract of limited duration, (including 6% on a fixed-term contract) and 10% were in employment of unknown stability.

Likelihood of being fully employed and/or in stable employment was lower among participants from ethnic minority groups (85% and 61%, respectively), with a disability or long-term health conditions (88% and 74%) or classified as having a disadvantaged labour market situation (90% and 75%).

Half of unemployed participants (49%) had been out of paid employment and looking for work for at least 6 months when they started the programme, with over a third (36%) looking for at least a year. The majority (94%) of participants unemployed on entry cited barriers to work. These included having few jobs available where they lived (50%), lack of recent work experience (45%), disability/health issue/illness (41%) or not having the right qualifications or skills (41%).

Overall, 5% of participants were in training or education on entry to the programme.

Programme experience

Support needs and assistance

To ensure success in the context of COVID-19 and online delivery, some provision sought to support individuals with digital access. Two-fifths (40%) of participants had digital support needs; overall, 20% received digital support assistance, 12% would have liked this support but were not offered it, and 8% were offered but did not need this support.

Assistance for other support needs was less common:

• around a third (34%) of participants had parental/guardianship responsibilities for children under 18. Only 3% of these participants received support/assistance with childcare responsibilities from their provider, the vast majority (91%) were not offered this kind of support.
• one in ten (11%) had caring responsibilities for a family member, relative or friend. As with childcare, only a small minority (7%) received support/assistance in this regard.
• among those with a mental or physical health condition, or illness expected to last 12 months or more, around 3 in ten (29%) received support or assistance from their provider to help with these needs.

Regardless of the support need and related assistance, the vast majority (at least 90% across the 4 types) of participants were satisfied and just under 3-quarters with digital needs (66%), childcare (73%) or other caring responsibilities (74%) said they would have had difficulty attending the course without it. A higher proportion (80%) with a disability or health condition said they would have not been able to attend otherwise.

Programme benefits and satisfaction

Most participants had received employment-related support while on the programme. The most common types of advice and support received were around what sorts of work or training they could do (68%), general advice about the world of work (62%), or training and advice in how to look for work (57%).

Views on the provision were broadly very positive:

• around 9 in ten were satisfied with information and guidance they received on what would be delivered through the programme (88%), feedback and guidance they received during the programmes (89%), and relevance of the programme to their specific needs (87%).
• assessing all the support received from the programme and how they may have benefited since, around 8 in ten (81%) expressed satisfaction, with nearly half (48%) saying were very satisfied.
• the majority of participants reported forms of soft skills development: self-confidence (70%), communication skills (66%), motivation to do more training (66%), and motivation to find a new job or seek a promotion (62%).

Employment at 6 months

Half (51%) of individuals were in employment 6 months after leaving the programme compared to a quarter (25%) at entry. This represents a 26 percentage point increase in employment. The proportion unemployed fell by 32 percentage points from half (49%) to 17%, whilst there was a small rise of 7 percentage points in the proportion who were economically inactive from 25% to 32%.

Employment among ESF-only participants increased by 26 percentage points, from 26% at entry to 52% 6 months after leaving the programme, while employment among YEI-only participants grew to 31% 6 months after leaving the programme.

Most commonly, growth in inactivity was due to individuals not working because of sickness or disability (12% of all leavers at 6 months) or moving into education or training (7%).

In terms of individual-level transitions, just under a quarter (23%) of participants had remained in employment and approaching 3 in ten (28%) had moved into employment. Nearly half (46%) of all participants remained unemployed or inactive, and a residual 2% had moved out of employment. Broken down my provision type:

• For ESF participants, 24% had remained in employment, while a further 28% had moved into employment. Just under half (46%) remained unemployed or inactive.
• more than 2-thirds (69%) of YEI participants remained unemployed or inactive at 6 months, while 3 in ten (31%) under YEI moved into employment.

The proportions of leavers working for an employer, self-employed or on an apprenticeship were largely unchanged compared to programme entry.

There was an increase in the proportion in precarious employment, from 9% to 19% at the 6-month point. The proportion under-employed (i.e. wanting to work more hours) also increased from 7% to 10% by the 6-month point.

In-work outcomes

Among all participants who were in employment at entry, over a quarter (27%) left with an improved labour market situation at 6 months. This was predominantly due to a movement from precarious to stable employment (25% of all in precarious employment on entry).

Among leavers that were employed on entry and at the 6-month point, around 2-fifths (38%) of participants reported being given more responsibility, a slightly lower proportion (33%) reported a requirement for higher skills or competencies in their role, and almost a fifth (19%) required a higher level of qualification.

Employed participants reported a range of other benefits or improvements to their job prospects compared to their situation on entering the programme. More than half of leavers had more opportunities for training (64%), more job satisfaction (60%), improved future pay and promotion prospects (57%). Just under half (49%) reported increased job security (49%) or received an hourly or annual pay rise over the 6-month period (47%).

Individuals with improved labour market situations 6 months after leaving their course were more satisfied with their experience than those without (89% compared to 86%), although the vast majority of individuals without these improvements were still satisfied.

Benefit claimants

At programme entry, 4-fifths (80%) of participants who received DWP provision were claiming any state benefits. Six months after leaving the programme, that proportion had reduced to half (50%).

Comparison to the 2016 to 2019 cohort

Population and provision type

Compared to the previous cohort, the 2021 to 2023 leavers had a lower proportion of YEI participants, 4% down from 11%, and a higher proportion of ESF participants. This is due to the “front-loaded” nature of YEI delivery within the programming period.

In terms of Investment Priority, the 2021 to 2023 cohort saw a higher proportion of participants under 1.4 and 2.1, and lower proportions under IPs 1.1, 1.2 and 1.3.

A greater proportion of 2021 to 2023 participants were from Direct Providers and the NLCF, whilst a smaller proportion were from the ESFA or the DWP. The proportion from HMPPS remained consistent.

The proportion of participants classed as having a labour market disadvantage rose between the 2 cohorts, from 65% among 2016-19 leavers to 72% among 2021-23 leavers. The proportion of participants with a disability or long-term health condition also increased between cohorts, from 37% among 2016-19 leavers to half (50%) of participants from 2021 to 2023.

Labour market characteristics

Upon entry to the programme, fewer participants in 2021 to 2023 were in employment (25%), or unemployed and looking for work (49%), compared to 2016 to 2019 (29%; 56%). A greater proportion of 2021 to 2023 participants - a quarter (25%) - were economically inactive, compared to just 15% in 2016 to 2019. A greater proportion of participants in 2021 to 2023 were not working due to sickness or disability (9%), compared to 2016-19 participants (3%).

Satisfaction

Those dissatisfied with the programme continued to be a small minority (7% for the 2021 to 2023 cohort, 8% for 2016 to 2019). Participant satisfaction with the relevance of the programme to their needs, and the feedback and guidance provided increased between 2016 to 2019 and 2021 to 2023. This was despite the COVID-19 pandemic posing challenges to delivery throughout 2021. Satisfaction with the guidance and information about what would be delivered in the programme remained consistent.

Employment growth

The growth in employment between participants beginning the programme and 6 months after programme completion remained consistent between the 2 surveys, with growth of 24 percentage points in 2016 to 2019 and 26 percentage points in 2021 to 2023.

The proportion of participants who had moved into employment at the 6-month mark also remained consistent, at just over a quarter in both cohorts.

Conclusions

Some of the main conclusions that can be drawn from this research are that:

• overall, the ESF programme continued to successfully support individuals to enter, stay in and develop within the labour market.
• the programme reached the intended participants, predominantly supporting individuals facing labour market disadvantages.
• furthermore, the characteristics of participants under each Investment Priority aligned with their purpose.
• the proportion of participants facing labour market disadvantages had increased since the previous cohort. In addition, a greater proportion of participants in the 2021 to 2023 cohort were inactive on entry to the programme.
• the distance from labour market was apparent in those facing disadvantages.
• participant views of the programme remained very positive, indicating that any disruption from COVID-19 was not detrimental to participant experience.
• with the movement to online delivery (in light of COVID-19), unmet needs for digital support were fairly uncommon.
• it was rare for participants to have received support in relation to other potential needs, such as with childcare responsibilities, other caring responsibilities and health conditions. Participants who did receive this support were very satisfied with what was provided, and most thought they would have been unable to participate in the programme without it.
• employment outcomes were quite common across a range of participants, and in line with those achieved pre-COVID.
• the programme has been particularly beneficial for those in work on entry.
• overall, the proportion of unemployed participants decreased and the proportion in employment increased 6 months post-provision. However, the proportion in precarious employment and/or under-employed had increased, reflecting that, although more individuals are in work, the quality of this work could be improved.
• there was a small increase in the proportion of inactive participants, most commonly due to health reasons or individuals having moved into education or training.
• fewer participants received benefits 6 months after provision, compared to on entry, indicating that the increase in employment among participants reduced their welfare needs.