Kimberly Burrowes
Urban Institute
Research Associate II

DWP Innovation Fund show positive outcomes for disadvantaged youth in the UK

In May 2011, the United Kingdom’s Department of Works and Pensions (DWP) launched an Innovation Fund to invest in new services for improving the lives of young people at risk of being “not in education, employment, or training” or NEET. In the U.S., these youth are sometimes referred to as “disconnected youth” or “opportunity youth.” The results of the Innovation Fund’s first cohort of projects offer considerations for managing challenges that could arise during implementation and broadly how programs can demonstrate early outcomes through evaluation design.

DWP had prior experience supporting disadvantaged youth aged 18 and older, but the Innovation Fund intended to target young people from as early as age 14 to prevent them from becoming NEET at age 18. The Innovation Fund offered up to £30 million over three years, starting in 2012, to support social investment programs aimed at addressing these challenges.

On average, the share of NEET youth has been higher in the UK than the rest of the European Union. By the end of 2011, there were approximately 2.7 million NEET youth aged 16-24 in England alone, according to the International Labor Organization:

                                                                          

 Source: International Labor Organization - Share of youth not in education, employment, or training, total (% of youth population

Youth who are NEET face significant challenges, including persistent unemployment, high risks of criminal involvement, and physical and/or mental health issues. The discouraging increase in the number of NEET youth has propelled the government to think more innovatively about solutions. Research has shown that these negative outcomes can be lessened or avoided by strengthening the education to employment pipeline. For example, the U.K.’s Private Equity Foundation believes that “the problem is not a lack of information about what makes a young person work ready, but rather the lack of a common, evidence-based language across all stakeholders.”

The DWP Innovation Fund created measures to help channel NEET youth into education, and eventually employment. Its aim was to support interventions that could become replicable evidence-based programs and lead to future investments. The DWP developed a rate card to link outcomes achieved, such as improved attendance and entry into employment, to the maximum prices it was willing to pay out per participant who achieved that outcome.

DWP awarded ten social impact bond (SIB) deals to test innovative programs to support disadvantaged youth. Two of these were awarded to Social Finance UK, a social investment intermediary, for the management of the Energise program and Teens and Toddlers. Social Finance UK worked in partnership with the programs to develop methods to track their performance throughout implementation. After three years of service delivery, both SIBs demonstrated substantial impact: both programs had improved outcomes related to school attendance, attitude, behavior, attainment of accredited educational and skills qualifications, and entry into and sustained employment.

The final program report discusses these positive outcomes in more detail, and also highlights some of the important lessons learned during implementation:

  • As a result of the SIB, Energise strengthened its relationship with participating schools and built in flexibility for its model to adapt to schools’ schedules.
  • Initial challenges around data collection were mitigated after the first year with formalized data use agreements. Adviza, the service provider facilitating the Energise program, also saw improved capacity to manage data and measure performance.
  • Teens and Toddlers also saw improved efficiency in data collection and reporting. Using a SIB provided the opportunity to increase the program’s capacity and work closely with the participating schools to ensure the necessary data was being recorded.  
  • The program was able to respond to implementation challenges that arose, such as the inconsistency and infrequency of program sessions, and the lack of capacity for the volume of interested teens. This was done by providing opportunities to meet beyond the programs’ allotted times, and developing cohorts of 8-10 teens to facilitate optimal group sizes.

These findings at the conclusion of the Innovation Fund SIBs are promising for social investing. The programs highlight the importance of capturing data throughout the process, being flexible during implementation to address potential challenges and setbacks, and how capacity can be increased to expand service provision into new areas without compromising the outcomes. The lessons learned from program implementation are valuable contributions to the field and can help us think more critically about how we can use SIBs for NEET and other disadvantaged youth. 



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