June 30, 1998

 To:Community and Neighbourhood Services Committee

 From:Commissioner, Community and Neighbourhood Services

 Subject: Ontario Works Pilot Projects

 Purpose:

 This report discusses recent changes to the Ontario Works (O.W.) funding model. Based on these changes, the Social Services Division, in partnership with contracted community agencies, is preparing to test new approaches to delivering training and employment placement services to Toronto's O.W. clients. A brief description of one pilot is provided, including a discussion of benefits for clients, the agency and the City.

 Financial Implications:

 No changes are required to existing budget allocations.

 Recommendations:

 It is recommended that:

 (1) the Social Services Division develop and fund pilot projects for 1998 with a range of community based agencies and organizations which provide a blended approach to delivering services under the Employment Support and Employment Placement streams of Ontario Works;

 (2)the Department, in concert with the area office of the Ministry of Community and Social Services, evaluate the outcomes of these pilot projects in order to determine the benefits of the approach, and the required funding levels for the development of the 1999 budget; and

 (3)the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

 Background:

 In July of 1997, the Ministry of Community and Social Services approved the Social Service Division's Ontario Works Business Plan, including service targets within each of the three program streams (Employment support (E.S.), Community Participation (C.P.) and Employment Participation (E.P.)) for 1997-1999. However, based on a significant decline in the caseload and knowledge gained in the administration of Ontario Works over the past several months, the Community and Neighbourhood Services Department entered into discussion with the Ministry to renegotiate its service targets for 1998.

 During these discussions, the Department indicated to the Ministry that experience to date has shown that there is a significant need among Toronto's clients for training, due both to the increased skills required to compete in the labour market and the change in the composition of the caseload. The progressive reduction in the caseload over the past year, from over 94,000 cases in May 1997 to 83,000 cases in May 1998, has seen the most "job ready" clients exit the system for employment.

 Those clients remaining, a greater proportion of whom have lower educational and skill levels, and weaker attachment to the labour market, demonstrate a substantially increased need for a range of training courses and interventions. Similarly, the inclusion of single parents in the O.W. programs, many of whom have been out of the labour force for some time, has created a further demand for training and skill development courses. In both cases, an initial period of training will be required to prepare clients to into employment as quickly as possible.

 At the same time, these same changes in the caseload have reduced the number of clients who could reasonably be expected to participate in the Employment Placement stream. Divisional surveys indicates that a minority of clients are candidates for Employment Placement.

 The implementation of the Employment Placement stream has also taken longer than anticipated, and contracted organizations are experiencing several issues impacting their success in the program. The principal issue noted by agencies providing placements is that, for the reasons enumerated above, referrals to date have proven to be more difficult to place directly in employment than they originally anticipated. In addition, the financial compensation model prescribed by the Province is not structured in a way that allows non-profit agencies to recoup their initial investments in a timely enough fashion. As a result, a number of organizations who had agreed to participate in the E.P. stream withdrew, including those with the greatest referral capacity.

 Consequently, Toronto currently has limited referral capability in the E.P. program stream. The concern the Department has expressed to the Province is that the budget allocated to Employment Placement is significantly high in relation to need, while the funds available for training have been significantly underestimated against demonstrated need. Therefore, while sufficient funds have been budgeted within the E.P. program stream, they have effectively been inaccessible. The basic reason is that, under the Provincially prescribed O.W. funding formula, there has not been sufficient

 flexibility within the stream to reallocate funds to support activities, such as training, that are clearly required to assist clients currently on the caseload move into employment placements.

 The lack of funding flexibility within the program stream, as well as other program restrictions imposed by the O.W. Guidelines, have also restricted community agencies' ability to propose truly blended approaches to assisting O.W. clients, which provided an integrated mix of education and training, and job placements, and which have the potential to move clients directly from training programs into jobs.

 In its discussions with the Ministry, the Department has therefore stressed that Ontario Works must allow for greater flexibility regarding the types of activities, and approaches, that are eligible under the O.W. funding model, both to enable agencies to develop programs that deliver blended programs which will more effectively meet client needs, and to improve the Division's capacity to manage the overall program and meet Provincially approved targets.

 The Ministry of Community and Social Services has recently indicated it will allow greater flexibility under the O.W. program Guidelines and funding formulas, the aim being to permit local delivery agents to explore integrated service delivery proposals from community agencies.

 In light of recent Provincial statements, the Department's goal in 1998 is to gain experience by developing and testing a limited number of pilots, in concert with contracted community agencies, that will provide clients with a blend of training and workplace based learning experiences or job placements. The desired outcomes are models which will be mutually successful: clients will obtain and sustain employment, reducing their length of stay on social assistance; agencies will receive adequate funding to delivery programs; and the Department will realize program cost savings as clients move into jobs.

 This report briefly describes the basic features of the pilot projects that are being proposed by a number of community based organizations.

 Discussion:

 Pilot Project Model:

 A number of community based organizations, including the Learning Enrichment Foundation (L.E.F.), Goodwill Industries and the Toronto Board of Education (York Division), have been engaged in discussions with M.C.S.S. and the Department concerning development of pilot projects under Ontario Works which test blended models for service delivery . The Parliamentary Assistant to the Minister of M.C.S.S., Jack Klees, subsequently referred agency staff to the Department for further discussions related to the development of concrete proposals for pilots.

   Over the past month, Departmental staff have been engaged in active discussions with each agency. The aim is to develop pilot projects which combine training supports available under the Employment Supports stream and experiential learning or work placements provided through the Employment Placement program stream. Under the flexibility offered in the pilot projects, each agency will be able to provide individual clients with a continuum of service options. There will be easy access educational and skills upgrading and job training supports which lead to appropriate job placements upon completion of the training component.

 The expected outcome of the pilot projects is that a substantial percentage of clients who participate will be successfully placed in jobs. Appropriate performance standards will be established by the Department, in conjunction with the participating agencies, and incorporated in service contracts. Agency costs for the pilots will be funded on the basis of O.W. program savings derived from reductions in the length of time clients remain on the caseload as a result of obtaining employment.

 Toronto District School Board (T.D.S.B.) Proposal:

 The T.D.S.B. proposal represents a special case. The York District of the now consolidated T.D.S.B. has been running an Adult Co-op Employment Placement program for nine years, combining a classroom based educational component and an experiential learning component in a workplace setting. The Division has regularly referred clients to the program. Staff who have had contact with the program agree that clients who have used it have benefited.

 Until the beginning of 1998, no student fee was charged to the Department as the program was funded through the education system. Approximately 50 percent of the participants are G.W.A. clients. However, due to the restructuring of education funding in the province, funds will no longer be available to support a range of adult education programs, including the Adult Co-op Employment Placement program. The Ministry of Education and Training (M.E.T.) has indicated it will provide funds for a specific number of unemployed workers who are not in receipt of social assistance.

 In general, the Department is reluctant to fund programs as a result of the side loading of costs from the educational system onto the municipality. In this case, however, continuation of the Adult Co-op Employment Placement program, which provides an effective service to O.W. clients, can only be guaranteed by funding it as a pilot project. Again, continued funding for this pilot will depend on program performance and the successful placement of participants in employment.

 Conclusion:

 The Division is pursuing the development of a small number of pilots with community based service providers to test blended service delivery models. The Division is confident that the proposed pilots will effectively meet the needs of O.W. clients, and improve their ability to rapidly find employment. Pilots will be funded through O.W. program savings. Finally, in conjunction with the M.C.S.S. area office, the Department will evaluate pilot outcomes related to client success in achieving employment. Future funding for any initiatives will be based on meeting the negotiated performance standards, and on an overall review of the pilot, the terms and conditions of which will be established in the service agreement contract.

 Contact Name:

Heather MacVicar, General Manager

392-8953

 General Manager, Social Services Division

 Commissioner, Community and Neighbourhood Services