Financial Capability and Worklessness Eric Thompson DWP Strategic Financial Inclusion Champion for South Yorkshire Nassara Bostan DWP Financial Inclusion Champion for West Yorkshire

Aims of the Workshop Highlight the importance of financial capability in worklessness programmes Understanding the financial barriers to sustainable employment Look at findings from other areas and projects Share best practice Consider actions to develop & implement

Manchester study – ‘Out of work and out of money.’ A study of FI & worklessness in Manchester – how to improve support for people with money problems to obtain & sustain employment By Damon Gibbons of the Centre for Responsible Credit on behalf of Manchester City Council. Outlines key features of a high quality financial inclusion service for job seekers & an overview of relevant nationally funded initiatives. Primary research involving 45 Jobseekers allowance claimants to determine how money and debt problems affect this

Findings Money problems impact on job seeking behaviour in 4 ways: distracting people from job search constraining job search creating disincentives to work. reducing chances of sustaining employment. Impact differs depending on length of time unemployed Use of financial services change with loss of employment

Conclusions Money problems impede peoples efforts to find work Low level of benefits impact on peoples ability to keep focused job seeking Debt problems may affect ability to sustain employment Reducing benefits creates additional barriers to returning to work More should be done to reduce financial burden of unemployment and address impacts of money problems on job seeking behaviour A high quality service would need to respond to these findings A number of actions can be taken locally but many need national input

Features of a quality service Screening & rapid response:- –Day 1 of claim – basic screening – signpost to help –Later stages – contractors check for both money & debt problems Partners develop money management sessions to deliver in welfare to work settings including; maximising income, reducing expenses including energy efficiency, dealing with debt including negotiating with creditors, managing transition to employment including in work budget, debt payment plans and better off calculations. Taking account of potentially poor numeracy & literacy skills. Formal partnerships with financial services providers to ensure access to banking facilities & affordable credit and rapid access to a bank account when someone gets a job Work & skills plans should show how partners will reduce financial burden & improve support Better in work support

Recommendations (1) 1.A clear process to screen JSA claimants for money & debt problems and direct them to assistance should be put in place 2.Local partnerships should ensure their plans reduce the financial burden on the unemployed & provide them with access to advice 3.The administration of unemployment insurance policies should be improved 4.Greater protection against debt recovery for those recently loosing job or starting work & need time to renegotiate repayments 5.DWP, BIS & insolvency service review all forms of insolvency to ensure procedures do not create disincentives to work 6.DWP & Insolvency service should look at impact of debt & insolvency procedures on future employment prospects

Recommendations (2) 7.Develop guidelines for use of credit reports in recruitment 8. Partnerships should be formed to create financial capability materials & financial services for the unemployed 9. Share best practice within existing networks 10. Social fund should defer repayments where these are impacting on ability to job search 11.Efforts should be made to ensure people are better off in work even after debt repayments 12. In work support should be improved

East of England Financial Capability and Inclusion Project This innovative financial capability project was developed by Citizens Advice in partnership with a network of providers across the East of England. Funded through the EEDA European Social Fund programme under the Priority One objective of extending employment opportunities. The project aims to offer a more integrated approach to developing money management skills and increasing access to job search support and fairer financial services for people who are not in paid work.

What did EEDA want to achieve with the project? Wrap-around provision for individuals Range of support and advice services Provide individuals with life skills to help them Draw on range of informal and formal support Integrated and coordinated services Greater understanding of what is available to individuals Advisers equipped with right tools to help customers Economic participation and inclusion Address worklessness and its causes, particularly in “hotspots”

Project Design May 2009Feb 2011 FINANCIAL CAPABILITY TRAINING PRACTITIONER FORUMS & ACCREDITED TRAINING REFERRALS TO OTHER SERVICES DETAILED EVALUATION Delivered through network of 18 community providers: Housing Association, Credit Unions, Citizens Advice Bureaux, Women’s groups, Adult skills development, Community Foundation

Financial capability training Across the East of England, financial capability training is being delivered to 400 frontline workers and 800 individuals between July 2009 and November For people who are not currently in paid work short sessions covering a range of everyday issues for example, budgeting, opening an account, borrowing and saving money, taking out insurance. This training is aimed at people who can face greater barriers to participation including people living with a disability or long term health impairment, lone parents, people from Black, Asian and Minority Ethnic communities, women and older people. For frontline workers help to build their skills and knowledge to assist clients with basic queries about money issues and to support clients with budgeting, dealing with debt, setting financial goals and signposting to other resources.

Example Session 1 For individuals out of work How to create a balanced budget Consequences of not paying debt Getting debt advice How a bank account works Finding out about credit unions Fairer credit options Ways of saving Record keeping

Example Session 2 For frontline workers Attitudes to money Needs and wants How to identify debt problems Where to get debt advice Priority and non-priority debt Borrowing – choosing credit Role of Credit Unions Insurance Fuel poverty

Beneficiary profile 69% of unemployed beneficiaries have been unemployed for a year or longer Over two-thirds long-term unemployed. 21% have no qualifications. Just under 50% of those supported are aged (136 out of 297) with a further 97 beneficiaries aged 50 or over. Vast majority were classified as ‘White British’ (240 out of 297) the next two largest groups are ‘African’ (12) and ‘other’ (11.) 56% of beneficiaries are female 20% are lone parents 38% of beneficiaries are disabled – indicating very effective outreach into groups supporting this community in particular.

Progress so far Demand for frontline worker training has significantly outstripped supply In the most recent reporting quarter (end May 2010) training to out of work individuals was at 96% of target Outreach across communities of need has been very effective, most notably with disabled people who represent 38% of all individual learners Over 130 organisations have been involved in the county forum network with over 260 attendances by the end of February The model of delivery through a network of local providers has added significant value in terms of sharing resources and good practice as well as facilitating more joined up working Success in engaging a wide range of organisations has significantly raised awareness of financial capability issues and enabled new links through to wider economic and strategic skills agendas in the region

Feedback from beneficiaries Reactions to the training have been overwhelmingly positive. Both report higher levels of confidence and knowledge having completed it. Beneficiaries welcomed the quality and patience of trainers; the small group training environment; the information they were given; and being able to discuss issues and experiences with others. Beneficiaries were able to quote a number of practical steps they would take as a result of the training, including contacting their credit union (one third) and one-fifth looking to save money by changing their energy suppliers. Over 50% said that they would set up budgets to get a tighter grip on their finances. Frontline workers appreciated the resource packs; the breadth and content; the interactive games; the opportunity to share experiences with others. Frontline workers reported higher levels of confidence following training and felt this would enable them to provide better advice to clients.

Training content Whilst the majority of comments were positive some issues were raised in the evaluation: Both beneficiaries appreciated the content of the training but there were differences of opinion about the appropriateness of the level at which the training was pitched. Some frontline workers thought that additional issues could have been incorporated, whilst others struggled to keep a pace with the existing scope of the training; advocating longer sessions to cover the same content. Providers raised the length of training sessions as being of concern. Achieving 6 hrs of training for a relatively large cohort of trainees was proving problematic, especially if providers were training groups of people from the same organisation.

Project Legacy  Sustainable capacity for financial capability delivery  Increased awareness of financial inclusion issues  Greater knowledge of local need  New joint working opportunities  Embedding financial capability within strategic planning

And for the future… The Employment Pathway CLIENTS OUT OF WORK CLIENTS IN WORK Engaging with Clients Assessing Client Needs Tackling Personal Barriers Tackling Skills / Job- Related Barriers Job Search and Placement In Work Support and Aftercare

For a copy of the reports: Out of work and out of money: credit.org.uk/uimages/File/out-of-work- and-out-of-money-final(1).pdf East of England Financial Capability and Inclusion Project: ion_East_of_England.pdf

Thank you for listening!

Questions for Group Discussion: (20 minutes) 1. What do you think are the key messages from these studies? 2. Funding aside, what do you consider to be the main barriers in delivering projects similar to these? 3. What do you think could be done to embed financial capability in worklessness programmes?