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Activity and Learning Agreement Pilots – Programme Theory Evaluation
Incentivising Participation in Activity Agreements (Working Paper 1)

Johnson C, Newton B, Usher T, Hillage J
Working Paper RW028, Department for Children, Schools and Families, January 2008

a study commissioned by the Department for Children, Schools and Families (DCSF)

The Activity and Learning Agreements (ALA) Pilots were launched in 12 areas of England in April 2006. Activity Agreements (AAs) operate in eight of the 12 areas and are designed for young people aged 16 or 17 who are not in employment, education or training (NEET). Young people have to be NEET for 20 weeks to be eligible. They receive a weekly allowance (three variants of which are being tested in different pilot areas) and in return receive continuous support and agree to take part in tailored activities designed to help them progress towards an employment or education and training outcome. Learning Agreements (LAs) are aimed at 16 to 17 year olds in jobs without training (JWT) and also operate in eight of the 12 pilots areas. Under a Learning Agreement, young people take part in agreed activities, which must include undertaking a designated course.

See also:

• Process Evaluation: Year One Report
• Signing Up to a Learning Agreement

This paper is part of the programme theory strand of the ALA Pilots evaluation. This is a realist evaluation method which focuses on identifying and testing some of the key ‘theories’ that underlie the ALA policy to explore which components of the policy work (or not), how, for whom, why, and in what circumstances.

This is the first paper resulting from the ‘focused studies’ element within the programme theory evaluation and spotlights the role of the financial incentive in young people’s decision to participate in the AA. It is based on research undertaken among a sample of young people in two Connexions Partnership areas who either signed up to or rejected the AA between January and April 2007. Both areas offered the £20 weekly payment in return for participation. The aim of this particular study was to gather evidence in relation to the following theory:

If the net additional value of the incentive was sufficiently appealing, certain young people would sign up to the Activity Agreement (AA), or at least attend an initial discussion where the wider benefits of the AA could be promoted (the ‘carrot’ theory).

Methodology

The study used a two-stage qualitative approach. The first stage was a programme of depth interviews with young people who had signed up to the AA (32 interviews) and those who had declined it (five interviews). With the group who had signed up to the AA, a number of follow-up interviews were also conducted using a financial diary, in order to generate greater insight into young people’s income and expenditure patterns and how the £20 weekly allowance fitted into these.

Young people’s contexts

Young people’s experiences of school varied, and although most had achieved some qualifications, very few had the equivalent of Level 2 (five GCSE grades at A*-C). A few were positive about school although many more were simply ambivalent. Among those who actively disliked school, the main factors centred on poor relationships with teachers, an inability to accept teachers’ authority, and feeling uncomfortable about learning in the classroom environment, preferring more practical approaches. Low self-esteem was common. Many felt that their lack of good qualifications had hindered them in their subsequent search for work or for a college or training place.

Following school, around half of the young people we spoke to had become NEET and largely stayed NEET. Quite a few had aspired to go to college or gain an apprenticeship but this was a vague idea which they had not taken forward or had found blocked by obstacles such as a lack of places or a shortfall in their entry qualifications. A few young people had started a college course on leaving school but had left early; others had enrolled on one-year programmes but had not progressed further. Others had worked following school but in short-lived or temporary jobs, and experienced some churn between jobs and NEET status.

Income, spending and the financial allowance

Parents were a key source of income for many, either through providing a regular allowance (up to £80 a month) or, in less well-resourced households, providing small amounts of money when asked. This was usually ‘just a couple of quid’ here and there, for something specific. When young people had been employed, some had worked up to 12 hours a day for as little as £80 per week. Others reported that they had received the national minimum wage and that this was ‘good money’. Doing cash work was fairly widespread and could be relatively lucrative – up to £40 for a day’s work labouring – although this could not be relied on as a regular source of income. If odd jobs were done for the family, the amount paid depended on family resources.

Mobile phone top-ups were young people’s main expense, followed by snacks and cigarettes. Quite a few went out socialising when they had enough money. Many walked, or got lifts from family if possible, to limit travel costs. Some spent money on occasional treats for themselves and others such as their girlfriend or boyfriend.

Some young people voluntarily took (or were given) less money from their parents once they started receiving the allowance, but most could still rely on parents for money if they ran short. For around half of the sample, receiving the incentive did not change the amount they spent or how they spent it. Some now saved more towards paying for things like new clothes. However, for young people in more rural or suburban areas, extra travel costs associated with doing their activities could be significant and the £20 allowance was valuable as a means of covering these upfront. As a result of receiving the incentive, a couple of young people were now expected to pay ‘board’ money, while a few more now contributed to the household food budget.

Reasons for joining or rejecting the AA

Reasons for signing up to the AA tended to be complex and multi-faceted. However, most decisions were underpinned by the incentive to a greater or lesser extent.

Meeting new people (plus the incentive). This group had joined for the social opportunities presented by the AA. They felt that group-based activities would offer a chance to widen their social circle and develop greater self-confidence. Their spending tended to be low; therefore the importance of the incentive was also low as they lived within their means.

Boredom (plus the incentive). These young people had joined the AA mainly for something to do. Their income was mostly sourced from family although some earned money from informal work. The incentive was important as a ‘badge’ signifying the AA was worthwhile in terms of their time. It could also be used as a means of independence as it replaced some or all of the income they received from parents.

The activities (plus the incentive). This group signed up primarily for the activities. However, different elements of these appealed differently and were inter-related with young people’s commitment to work; how the activities were ‘sold’ to them; and whether they felt the activities were worthwhile. The financial contexts in this group were varied: some were relatively advantaged and for these, the £20 allowance was not particularly important. Others had little regular income and the incentive was a strong factor in their decision to sign up although they mainly wanted to improve their chances in the labour market.

The incentive alone. These young people had signed up primarily for the money, although this driver could later be overtaken by the activities or advice. Most had low or irregular income, although some were more advantaged and could spend the incentive as they wished. Some reported that they were waiting for a particular job to come up or that they had the possibility to go back to college to complete a course.

The young people who did not sign up for the AA had quite varied reasons for not doing so. Three were young mothers who received benefits as well as being helped out financially by their parents. One felt that he did not need to take part in the AA when approached about it as he was close to getting a job: he was now working full-time and planning to do an apprenticeship. Another was still NEET at the time of the interview but her priority was to look for work as she was under pressure from her parents to contribute money to the family purse. In this case the £20 allowance was deemed insufficient as her parents wanted her to pay at least £30 per week in ‘board’.

The theory applies differently in different circumstances

Some young people would have taken part in the AA without the incentive, but more said they would not have done. The weekly allowance was important in various ways which underpinned the ‘carrot’ theory:

• As an attention-grabber. Some young people just needed the money, especially if they were ‘disconnected’ from the informal labour market or could not rely on regular income from their parents.
• As recognition for the young person’s commitment to doing the AA. The incentive gave a basic value to the young person’s time and signified that doing the AA was worth something. The net additional value of the incentive was not particularly important as long as the young person felt that the activities were worthwhile.
• As an enabler, supplementing or replacing income from other sources. In some cases, the net additional value of the incentive was not all that important as young people ended up with the same amount of income. In this scenario, ‘passported’ incentives that accompanied the AA, such as being told the value of a course, were critical as these allowed the young person to see beyond the value of the £20 per week.
• As a way to help out parents more by contributing to the family budget. This was particularly the case among young people who had little income from their parents or informal work. The net value of the incentive was less than £20 per week once their contribution to the household was taken into account, so understanding the value of the activities and/or seeing accompanying material incentives, such as being bought a pair of work boots, were important ways that the young person remained engaged.

Table A reviews the role and value of the incentive for various groups of young people, and the implications of this for the AA policy. The carrot theory appears to work most straightforwardly as the ‘attention grabber’. However, for many, the importance of the incentive recedes as the wider benefits of taking part in the AA are recognised. For a few, the incentive becomes more important as the AA progresses: if young people do not see the value of the activities and these are not sufficiently tailored. For some of these young people the incentive alone is not sufficient to retain their interest in the longer term and they may gradually disengage.

Table A: How the carrot theory applies differently to young people in different circumstances

Source IES, 2008

Activity and Learning Agreement Pilots – Programme Theory Evaluation: Incentivising Participation in Activity Agreements (Working Paper 1), Johnson C, Newton B, Usher T, Hillage J. Working Paper RW028, Department for Children, Schools and Families, 2008.
ISBN: 978-1-84775-083-9. PDF Download only: £free

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