Employment, training and education

Employment, training and education

Providing opportunities for people to reach their potential

£38.6m
committed to charities and social enterprises

74
investments

26,000
number of jobs and training opportunities created

86%
of investments on track to deliver social impact

Summary

Education plays a fundamental role in young people’s lives, influencing their opportunities now and in the future. But the attainment gap for pupils from less advantaged backgrounds remains huge. There is also a challenge equipping young people with the skills needed for work and retraining older people to secure jobs in emerging industries.

Charities and social enterprises are using repayable finance to address these issues by delivering additional education programmes, preparing students for life after they leave the school system, connecting people with jobs, supporting young people at risk of unemployment and providing training opportunities to people further from the labour market. Revenue is generated from both from selling products and services to consumers and business as well as directly contracting with government, sometimes through outcomes-based payments.

High quality impact measurement in this area is essential to help organisations sell services to commissioners, win business from employers and understand the relationship between impact and profitability. Metrics which appear to be used commonly focus on education, jobs created and sustained employment. We would like to see greater alignment and transparency about success and challenges of different interventions in this area. This will help commissioners and investors make more informed choices about investment. 

Further information is available on our socal issue pages for education and employment

K10

Social impact

Connecting people with jobs

GetMyFirstJob, an innovative web based platform that improves the speed and quality of matching young people to suitable apprenticeships, took on £1 million of repayable finance from Nesta Impact Investments to help scale-up its reach and impact. Revenue is generated through subscription fees paid by employers and training providers. At the point of investment 145,000 young people were using the platform. Now over 300,000 young people are currently registered and 25,000 apprenticeships have been arranged. 

Supporting young people at risk

In 2012 we invested £1.7 million in five social impact bonds that delivered early interventions to improve the lives of disadvantaged young people at risk of not being in education, training or employment as part of the Department for Works and Pensions Innovation Fund. Target outcomes for young people were met or exceeded, particularly those that improved confidence and broadened employment prospects. The evaluation of the Innovation Fund found that the employability and transition to work aspects of interventions were seen by schools as the most valuable, having a particularly positive effect on disadvantaged young people. There was concern that young people with complex needs were harder to recruit and help within the timing of the programme. 

Providing training opportunities

In London, K10 helps young people find sustainable full-time employment by providing pre-employment training and paid apprenticeship opportunities in the construction industry and financial sector. K10 employs apprentices directly, billing developers, contractors and subcontractors for the hours an apprentice works on site. An £800,000 loan Impact Ventures UK provided working capital to grow the team and build the business. Of K10’s apprentices, 84% were previously unemployed, 12% are ex-offenders, 10% have a disability and 30% were unemployed for more than 12 months. 

Learning

Social enterprises that employ people furthest from the labour market need to allow for around 20% additional operating costs to cover their support. Social enterprises that have grown and taken on repayable finance without addressing this core aspect of their social business model have struggled to scale and repay investment. To ensure long term sustainability, social enterprises can adopt a mixed revenue model by finding additional funding for support or selling a higher value product (for example Miss Macaroon), or diversify their workforce to include people with lower or no support needs, such as Social Bite.  

Preventative spending unlocked by social impact bonds has been shown to provide positive outcomes for young people at risk of unemployment and can generate a significant new income stream for those organisations with a well-evidenced intervention. For example, Career Connect and Teens & Toddlers were the first providers from the DWP Innovation Fund to be recommissioned as part of its Youth Engagement Fund. However, the lack of a sustained strategy for outcomes commissioning and the complexity of developing such schemes continues to be a barrier to replication.

There has been relatively low take-up of social investment by charities and social enterprises delivering employability support through programmes such as the Work Programme. This largely reflects the terms on which contracts were awarded to charities and their position in the contracting structure. This affected their ability to operate a viable social business and deliver sustained outcomes.

With school budgets fragmented and under pressure, it can be challenging for social enterprises to sell their services and products into schools. However, here are some successful examples such as Third Space Learning, who have taken on social investment at different stages to invest in their management team, sales capacity and technology platform. Improved infrastructure to link schools with social enterprise could improve opportunities to grow impact for more organisations. 

Although national unemployment rates are relatively low overall, the growing ‘gig economy’ means that the quality and security of some jobs is poor. By comparison, social enterprises aim to provide high-quality jobs and support and be responsive to local economic conditions and skills. Social investment is enabling them to scale up their operations and compete with other employers.