I thank the Chairman and committee members on behalf of the Departments of Social Protection and Education and Skills for the opportunity to meet them today to discuss the effectiveness of social welfare payments in encouraging people to return to education with specific reference to the back to education scheme. In the course of my presentation I will outline the schemes that provide specific supports to jobseekers and focus in detail on the back to education allowance.
The Department operates a range of employment support programmes which assist unemployed people, particularly the long-term unemployed, lone parents, and sickness related welfare recipients to return to the active labour market either by taking up employment or becoming self-employed. This is done principally through the operation of the back to education allowance, part-time education option, back to work enterprise allowance and short-term enterprise allowance. These schemes offer supports to social welfare customers and other disadvantaged persons to assist them to improve their employability and personal and family circumstances.
Specifically with regard to the unemployed, the profile of unemployed people has changed in recent years with the downturn in the economy. Until 2007, measures such as the schemes outlined were targeted at getting those who had been unemployed or out of the workforce for long periods back into a position where they could access the workplace again through education, upskilling, reskilling or self-employment. With the economic downturn, the live register increasingly comprises people who have had work in recent years and who may have significant skills and education as well as those who have low skills but for whom the good economic times afforded ample work opportunities.
In the education sector all full-time further and higher education programmes continue to be open to unemployed persons. We know from the vocational education committees and higher education institutions that unemployed persons are taking advantage of further and higher education learning opportunities in increasing numbers. This is underlined by the significant increase in the number of back to education allowance recipients, an issue I will address in more detail.
Full-time opportunities are being provided for more than 40,000 learners, including the unemployed, under the youthreach, senior Traveller training centre, STTC, vocational training opportunity scheme, VTOS, and post-leaving certificate programmes, PLC. VTOS, Youthreach and STTC participants receive a training allowance in lieu of their social welfare payments and are eligible for a range of additional meal, travel and long-term unemployment bonus allowances. They are also eligible to access child care supports. Unemployed PLC participants may avail of the back to education allowance. Part-time opportunities, targeted at the low skilled, disadvantaged and hard to reach, including the unemployed, are available through the back to education initiative, BTEI, adult literacy and community education schemes. Together, these schemes will cater for an estimated 125,000 learners in 2010.
The challenges presented by the changed economic circumstances are being addressed at cross-departmental and agency level. Specifically, joint approaches have been adopted by the Departments of Social Protection, Enterprise, Trade and Innovation and Education and Skills to the development of a range of activation programmes which support the unemployed in getting work, work experience or the education-skills that will support them in the search for employment.
These measures include the work placement and short time work training programmes sponsored by the Department of Enterprise, Trade and Innovation. Also included is a range of third level labour market activation initiatives for jobseekers, which in 2009 supported more than 3,000 unemployed people to embark on a range of newly developed transition and accelerated programmes in institutes of technology as well as part-time undergraduate and postgraduate programmes in institutes of technology and universities which support the goals of the smart economy.
A new labour market activation fund of €20 million has been introduced to support innovative proposals aimed at progressing the unemployed into employment or progressing their education attainment. It is expected that this fund will provide at least 3,500 training places. Some 350 proposals were received by the deadline and an evaluation committee is assessing the tenders. It is intended that the process of awarding contracts will commence during May.
People participating in many of these schemes are supported by the Department of Social Protection which allows participants to continue to receive their existing social welfare entitlements via the part-time education option. The Department of Social Protection also directly supports unemployed persons to prepare themselves for employment through schemes such as the back to education allowance scheme.
The back to education allowance scheme encourages and facilitates people on certain social welfare payments to improve their skills and qualifications and, therefore, their prospects of returning to the active workforce. Participants in the scheme are paid a weekly allowance equivalent to the maximum standard rate of the social welfare payment they received prior to starting an approved course of study. In addition to the weekly payment, participants are entitled to an annual cost of education allowance of €500 which is paid at the start of each academic year. The allowance can be paid to people who wish to participate in approved second or third level courses of education.
In general, an applicant was required to be in receipt of a relevant social welfare payment for six months if pursuing a second level course or 12 months if pursuing a third level course. However, in response to the changing nature of the composition of the live register since the economic downturn, certain changes have been made to the entry criteria for the back to education allowance scheme. From September 2007, people who are awarded statutory redundancy can access the scheme immediately. As of September 2009, the six month waiting period for those pursuing second level courses was reduced to three months. In addition, the 12 month waiting period applicable to third level courses has been reduced to nine months for participants recommended by a facilitator of the Department of Social Protection. This nine month waiting period already applied to participants referred by FÁS under the employment action plan process.
Two study options available in the scheme, the second level option and third level option cover full-time courses of education from second level to higher diploma level in any discipline and to a graduate diploma in education. Under the second level option, a person may attend a second level course of study at any community, comprehensive, secondary or vocational school. The third level option applies to approved courses at a recognised university or third level institution.
The number of participants in the scheme in the current academic year 2009-10, as at the end of December 2009, was 20,808, of whom 16,010 or 77 % came from live register schemes. This constitutes a 79% increase from the 2008-09 year when there were 11,646 participants, of whom 7,919 or 68% had come from live register schemes. A total of 10,457 participants availed of the second level option, of whom 8,365 or 80% came from live register schemes. This constitutes an increase of 105% from the academic year 2008-09 when there were 5,087 participants, of whom 3,726 or 73% had come from live register schemes. A total of 10,351 people are participating in third level courses, of whom 7,645 or 74% came from live register schemes. This constitutes an increase of 58% on the preceding year when there were 6,559 participants, of whom 4,193 or 64% came from live register schemes.
At the end of April 2010, there were 20,983 participants in the back to education scheme. In 2009, expenditure on the scheme was €107.3 million and a budget of €169.7 million has been provided for the BTEA scheme in 2010. In 2008, the annual cost of education allowance was increased from €400 to €500. The effectiveness of the back to education allowance is concerned with the outcomes of the scheme and the relationship between those outcomes and the objectives of the scheme. These can be viewed in terms of take-up, the impact of the scheme on getting people back to work, eligibility criteria, the payment regime and scheme awareness.
The eligibility criteria of the scheme allow access to it from a broad base of social welfare customers which includes the unemployed, people with disabilities, lone parents, carers and other groups in receipt of social welfare payments. The significantly increased level of take-up at both second and third levels has been noted and is a reflection of the effectiveness of the scheme in encouraging people to seek further education and skills as a route back into employment.
Analysis of the data on the cohort of BTEA participants from jobseekers' payments who finished second and third level courses at the end of the 2008-09 academic year shows that 37% had left the live register by the end of December 2009 and 41% had left it by end of April 2010. Moreover, of the 59% still on the live register at the end of April 2010, 91% were on jobseeker's allowance and of these 72% had completed a second level course and 28% had completed a third level course while on BTEA.
The imposition of a waiting period serves to minimise the deadweight element which is the extent to which people would have moved into employment or training and education without access to the scheme. The exit rates from the live register at three, six and 12 months are 70%, 50% and 80%, respectively. This means that 70% of the people who join the live register leave it within three months. Of those who remain on it for more than three months, 50% leave within six months and of those who remain for more than six months, 80% leave within 12 months. Consequently, access to BTEA confers a significant benefit in terms of extending entitlement for the duration of a course and the potential for dead weight exists. In the current economic climate it is paramount that the resources available are used well.
The main components of the eligibility criteria are the qualifying payments, the length of time a customer must be in receipt of a qualifying payment and the age of the customer. These conditions have been modified over the years to facilitate increased participation. The BTEA payment regime incentivises and facilitates participation in the scheme. It is not a means-tested payment and participants receive the maximum weekly rate of their qualifying payment, regardless of the rate paid prior to availing of the scheme. In addition, it attracts a cost of education allowance of €500 per annum. BTEA participants can also work part time without affecting their entitlement.
Awareness of the scheme is promoted through the Department's information services, the network of local social welfare offices, Citizen Information Centres and the Department's website. The increased take-up of the scheme over the course of the past year indicates that awareness and perception of the value of the opportunity presented by participation in the scheme are well established.
Although the subject of discussion today is social welfare payments, specifically, the back to education allowance scheme, it is important to point out that the national employment action plan, NEAP, is the main activation measure for jobseekers and provides for a systematic engagement of the employment services with unemployed people. Under the national employment action plan, everyone who is approaching three months on the live register is identified by the Department of Social Protection and referred to FÁS for interview with a view to assisting them to enter or re-enter the labour market.
In response to the increase in unemployment in 2009, FÁS, together with the local employment services provided by area-based partnerships, have increased their capacity for referrals from the live register from 6,500 to 12,250 cases per month under the national employment action plan. In 2009, FÁS put in place measures to double the capacity to cater for the rise in referrals from the Department of Social Protection increasing the annual referral capacity to 154,000 persons in 2010, which is more than double the referral capacity in 2008.
The Department of Education and Skills will fund the provision of 157,000 training and work experience places for unemployed people in 2010. That compares to the 66,000 equivalent places that were delivered in 2008 and the 130,000 places delivered in 2009. Those will be delivered by FÁS and the bulk of the additional provision will be in training places on short courses for unemployed people. The additional places are being delivered through three core-training initiatives, short courses, night courses and on-line courses.
