Examination of Witnesses (Question Numbers
116 - 119)
WEDNESDAY 15 DECEMBER 1999
MR JOHN
WATSON, MS
HAZEL SUTTON,
MS CATHY
HENDERSON, MS
SATWANT PRYCE
AND MS
ELSIE HOPPER
Chairman
116. Ladies and gentleman, you are very welcome.
Thank you very much indeed for the evidence that you have submitted
to us already in written form. We are looking forward very much
to hearing from you this afternoon. I will let you play yourselves
in, if I may, by asking you a general question to begin with which
each one of you can briefly cover. Can you give a brief outline
of the labour market conditions in your area? What are the main
barriers to employment faced by your client group and would you
say that you have a jobs gap in your particular area?
(Mr Watson) The Glasgow jobs market has,
over the last 20-odd years, been in decline but over the last
few years has seen a very welcome increase. However, whilst that
increase is welcome, there is still a very high level of unemployment
in the city. The claimant count is 5.9 per cent compared to the
national 4.0 per cent. If you look at the male rate of unemployment
compared to female, compared to nationally, it is much higher.
In Glasgow, there has been an increase in jobs. They have been
though in sectors, in finance, in administration, and the jobs
that have been lost are in manufacturing and construction. That
pattern is expected to increase and continue over the next few
years. We are expecting to see an increase in employment continuing
in Glasgow but compared to the national average of vacancies in
job centres they are running below the national level. Our real
concern though is that if you take the activity rate in Glasgow
that is very much lower and has been falling; whereas the national
employment rate has been increasing. A simple, back of the envelope
calculation would show, if you took the national employment rate
in Glasgow, there would be an extra 84,000 jobs in the city. We
would be looking at the hidden unemployment rate. In terms of
barriers to employment, I think there are a number. One of the
important things is perception. I started my comments by saying
that there had been a decline in jobs over the last 25 years.
There is still a belief among some people that that continues,
not only within the context of the employment zone, but school
leavers, for instance. I heard this year someone saying, "There
are no jobs for school leavers" and yet there has been a
shortage of school leavers over the last three years. This is
something that we found in looking at the new sorts of jobs, retail,
hospitality and call centres, which are growth sectors in Glasgow.
There is a lack of knowledge amongst the participants of the zone
about those jobs, the skills employers are looking for and the
conditions of pay and so on. That knowledge is known by case workers
and so on and professionals and trainers but it is getting that
awareness and expectation that those jobs are for them. "I
do not have the right accent", etc. We commissioned a survey
in the zone and one of the things that came out was that people
apply for jobs which they know about. Only six per cent of the
unemployed that the researchers spoke to had ever worked in a
call centre, they did not want to work in the retail and hospitality
sectors because they had had experience of low paid conditions.
They did not want to work in call centres because they had never
worked in them! There is this real issue of perception about jobs
which we think is quite important. That perception also indicates
to employers about people from certain post codes, how do they
apply through all the various mechanism, what are the account
management procedures for grants and so on. There is also a financial
gap in terms of benefits, transport costs, etc. People come off
benefits and then the real costs of living come through. Those
are barriers. There is also a question of accessibility, transport,
do the links exist, particularly if the jobs are outwith the normal
commuting areas, and also call centres work 24 hours a day; does
public transport work 24 hours a day? Is child care available?
In summary, yes, there is a gap in jobs. We think that there is
one, although there clearly are jobs available, but there is also
a very important sub-text of issues about perception, finance
and accessibility.
(Ms Sutton) It is not a terribly dissimilar pictureto
Glasgow in Liverpool and Sefton. The unemployment rate is currently
at 9.5 per cent in Merseyside, but there are definitely pockets
in Merseyside where it is rising to 20 per cent and occasionally
even higher. In Liverpool, for example, it is nearer 15 per cent.
There is obviously an issue there compared to the national average.
The other thing we have had in Merseyside compared to the national
picture is that there has been a decline in employment over the
same period where there has been an increase nationally. In the
north west generally it has been 0.3 per cent. In Merseyside,
it is a decline of seven per cent compared to a national growth
of four per cent.
117. In the north west in general there is a
decline of 0.3 per cent?
(Ms Sutton) Yes. This is in the period 1991 to 1996.
Over the same period nationally, there was an increase of four
per cent growth in employment. In Merseyside, it was down seven
per cent. There has been a population dispersal from Merseyside
as well in a similar period and it has gone down approximately
nine per cent in that period, but evidence suggests that that
is from the already economically active and better educated sector
of the population. In terms of economic activity rates, similar
to Glasgow, there is a decline from 1981 when it stood at 73.3
per cent. It has gone down to 69.2 per cent in Merseyside compared
with the national average.
118. What was your final year?
(Ms Sutton) 1999. Generally, the rate of unemployment
has reduced in line with the national picture, but at a slower
rate. The national rate suggests a decline of about 50 per cent,
whereas the north west Merseyside reduction is only about 40 per
cent. It is similar to the national picture but at a slower rate.
There is quite a lot of long term structural unemployment. Of
the people unemployed in Liverpool and Sefton, about 50 per cent
have been out of work for a year or more or two years or more.
There is a skills gap, very definitely, in that the traditional
jobs that the people of Merseyside have gone into have now gone
in the docks, some manufacturing and so on. There is a perception
issue in terms of barrier. The traditional jobs, particularly
for males, are not there any more. The jobs growth that has been
seen tends to be in the part time service sector industry to date,
although we do have some other growth areas coming into the area,
particularly automotive, but continuing in the service sector.
They are not traditional jobs that are taken by males. Any growth
of employment activity has been in females but mainly in part
time jobs. There is a perception issue from the clients' point
of view about the sort of jobs that they can do and that are out
there but also again from the employers' point of view. Access
to jobs can be quite difficult for some people. It can be difficult
for people to want to travel distances within Merseyside to get
to where the jobs are. It is not something they are used to having
to do. Another barrier that faces people in Merseyside is the
benefit system in that it does not readily support today's labour
market. It does not readily encourage people to take temporary
jobs and move between jobs in quite the way that the labour market
is happening now. There has been some change in the benefit system
over recent years which is going some way to doing that but it
is not changing as radically or as fast as the labour market.
There is a lack of appropriate jobs for some of the client group
that we work with, the older end of the client market, in that
if somebody has been out of work for two years or more—in
some cases for ten years—it is the level at which they can
get back into employment and the level of what would traditionally
be called entry level jobs. They are the ones that are disappearing
fastest. We need to find a way of helping people make that transition
from unemployment back into the jobs that are now available. In
answer to the question is there a jobs gap, yes, there is in our
part of the country. There is also very much a perceived jobs
gap. I talk to clients on a fairly regular basis. When asked,
"Do you feel more ready to go back to work now? Do you think
you stand a better chance of going back to work now?" having
done whatever opportunity it might be, the answer tends to come
back, "Definitely, when the jobs are there."
(Ms Henderson) I would echo some of the comments that
my colleagues have made. Our zone was perhaps a little different
in being a predominantly rural zone. The significant feature is
the sheer geographic size of the area. As in Glasgow, there has
been a slight improvement in vacancies, but a very slight one,
again away from the traditional types of work that individual
are expecting to be able to find. The perception point which Hazel
made is a very important one. The jobs gap is the major barrier
that the individual experiences who has been out of work for any
length of time, but particularly the long term unemployed. About
44 per cent of the working age population are economically inactive
in North West Wales. The size of the region is a significant factor
and the poor road links and poor transport. The sheer size means
that even if vacancies are available in one particular location
it is not a viable option for the individual to take the job either
because of the expense of public transport or that it does not
tie in with working times. There is a high proportion of the working
age population in receipt of disability benefits. That is a significant
element of the unemployed which is not always initially recognised.
The seasonality as a nature of employment is a significant factor
in two senses. One, the annual bulge of employment opportunities
but just for six to eight weeks in the summer, but also in the
variation in the different parts of the zones. Along the north
Wales coastal strip, there is a high transient population coming
in, expecting to be able to find seasonal work, which they may
indeed do for a while, and then that work ends but they stay with
no employment opportunity. There is very little manufacturing
at all. There are other issues—for example, the language
issue. It does present hurdles in both directions for individuals
seeking work. As Hazel mentioned, the changes in the types work
available, so that whereas I mentioned a slight improvement that
improvement is more directed towards part-time work and predominantly
part-time work that females will be taking.
(Ms Pryce) The economy in Plymouth is essentially
characterised by long periods of industrial decline, particularly
in the defence related industries, and more recently in utilities
and financial services. We have high levels of poverty concentrated
in the inner city areas. One of the wards in Plymouth on the index
of local conditions was regarded as the most deprived ward in
England. We have a very low wage economy in common with a fair
proportion of Devon and Cornwall and that presents a key issue
in terms of definitions of the jobs gap and how real it is. We
have an unemployment rate currently of 4.6 per cent and, since
about 1995, there has been some degree of convergence with the
national average. Our economy is highly vulnerable due to a number
of factors—a dependence on defence but also a preponderance
of externally controlled manufacturing companies. The current
high value of sterling is preventing exports making up our share
of jobs as we would wish. In terms of major barriers to employment,
we have identified through the employment zone specifically a
whole number of areas that we need to work on. Over one third
of our clients have basic skill needs. An offending background
is a key factor. At the moment in Plymouth, there are not any
agencies that specialise in provision for that group. The benefits
trap in a low wage economy and the differential between work and
unemployment is not very great so for some there is very little
incentive to go into work. The benefit system does not facility
the flexible, easy in, easy out work that we can sometimes get
in a tourist related area. There is also the issue of security.
Many long term unemployment people learn to live a life on benefit
and to curb their aspirations accordingly. The knowledge that
benefits will be paid indefinitely almost acts as a security in
itself which short term work cannot provide, and that is precisely
the sort of work that is growing in Plymouth. Informal family
arrangements can also help to keep people out of work. For example,
people take on child care responsibilities for a working daughter.
People become more removed, more isolated, from the labour market.
Age discrimination by employers seems to affect particularly older
men and it is very difficult to counter. Where there is a jobs
gap, it is very real for some people but it does not exist for
other people. Things like child care availability and affordability
are key issues in a low wage economy and for some people it simply
does not make sense to go into work.
(Ms Hopper) I can only echo things my colleagues have
said. The unemployment rate in South Tees at the moment averages
about 9.2. There is a skills and jobs gap. There are some jobs
available but unemployment people do not seem to apply. The perceptions
of a new job, fear of applying for a job, because they do not
know the skills that are required, particularly call centres and
the electronic industry. They have no knowledge and there is no
push from the family because the family do not have that. We have
quite a few families in the area who are third generation benefit
dependents. The demise of the steel industry and the chemical
industry in the Tees area obviously has had quite a dramatic effect.
People were used to going to the end of their street and walking
to work. They do not want to travel. They do not want to go from
one community into another to work. All of the things about the
benefit culture, about the wages offered by employers, the fact
that employers are a bit suspicious of taking on somebody who
has not worked for two or three years because it will take them
some time to get into a working ethos. Also, years of unemployment
and going on to other government initiatives which I have been
involved in in the past. They have not succeeded on them and therefore
why should something else succeed. "If I go on to this, will
I get a job out of it?" Lots of them have unrealistic job
aims. They are either too low or too high. There is no happy medium.
My colleagues have said everything that I could say.
Ms Atherton
119. We have heard of the environment in which
you are working. Can you talk a little bit about how successful
your different zones might have been in combating unemployment
and getting people into work? I gather some of you have set targets
of X number of unemployed people into employment. Can you give
some idea of how that is working?
(Ms Henderson) The issue around targets is perhaps
we need to bear in mind that the employment zones were a laboratory
experiment situation, if you like. Whereas targets are somewhat
of a useful measure, they are by no means the total measure because
there are other benefits that are there, that we know of anecdotally,
but are not always measurable. In North West Wales we have had
quite a measure of success in terms of individuals going into
work. At the moment, about 50 per cent of the individuals who
had an agreed action plan, having come into an employment zone,
have accomplished an employment outcome. What one cannot measure
is the impact for each of those individuals. One of the reasons
is that in North West Wales there is probably a strong culture
of self-employment already there and the flexibility and client
centred response around employment zones has made things possible
to these individuals whose intention was to set themselves up
in business, such as the purchase of equipment or specific training.
I think one in four of our job outcomes are people who have set
themselves up in work and hopefully some of those will expand
and offer employment opportunities to others. The key of that
is the client's voice has been heard. In all our evaluation, that
is the key response that comes back: "I was listened to.
The reasons why I am not working were heard and that response
was met."
(Ms Sutton) Our rate of people who agree to our action
plan into employment stands at around 39 per cent, so slightly
lower than North West Wales but we are still very proud of that.
It is very early to say in the overall scheme of things how successful
we have been but as an indication already we have seen 400 people
going into work who have been helped through the employment zone.
If you add to that the people who are in paid work in intermediate
labour markets or currently in subsidised jobs, who are being
assisted in setting up their business, you can nearly double that
figure. That is quite an achievement, we feel. The full impact
will not be known until post-March.
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