ANNEX
RESPONSE FROM THE DEPARTMENT FOR EDUCATION
AND EMPLOYMENT
EDUCATION AND EMPLOYMENT COMMITTEE
FOURTH REPORT: SESSION 1999-2000
EMPLOYABILITY AND JOBS: IS THERE A JOBS GAP?
RESPONSE TO THE COMMITTEE'S CONCLUSIONS AND
RECOMMENDATIONS
INTRODUCTION
1. Attached is a detailed response to each of the
committee's recommendations. This note sets out the background
to those recommendations. It follows the order of the overview
at paragraphs 7-13 of the committee's report.
The Geography of Employment Opportunities [Paragraph
7 of the Report]
2. The UK is now a high employment country with an
employment rate well above the EU average. This is also true for
the vast majority of local authorities However, the Government
agrees that it is necessary to work towards a higher level of
employment not just in certain areas but across the whole of the
country.
3. As the report concludes, the situation is complex
We concentrate on employment here. Government Policy is also directed
towards economic prosperity and regeneration, aimed at reducing
local and regional disparities. There are still a small number
of local authorities where employment rates are below the EU average
and even in the local authorities above the EU average there is
a relatively wide spread. There are also many areas within local
authorities where there are relatively few jobs or relatively
few residents in jobs.
4. That is why the Government has set out a long-term
economic ambition that by the end of the decade there will be
a higher percentage of people in employment than ever before.
Our aim is for at least three quarters of the population of working
age to be in work. To achieve this ambition both national and
local policies are needed. National policies aimed at achieving
a stable macroeconomic framework and dynamic product and labour
markets are necessary but not sufficient to achieve high and stable
levels of employment across the whole country.
Co-ordination At National and Local Level [Paragraph
8 of the Report]
5. The Government notes that the committee believes
that there is a difference in positions adopted by the Department
of the Environment, Transport and the Regions (DETR) and Department
of Trade and Industry (DTI) on the one hand and the Treasury and
the Department for Education and Employment (DfEE) on the other.
The Government does not accept that there is such a difference
between the views of the departments but does accept that it is
necessary to continue to work on achieving co-ordinated and coherent
programmes. Local and regional involvement in policy development
is an important element alongside the delivery of national programmes.
6. In particular, the Government has always accepted
that certain areas of the country need extra help to close the
gaps in employment opportunities with the rest of the country.
As outlined in the report there are already a number of locally
based initiatives such as Regional Selective Assistance, the Single
Regeneration Budget, Employment Zones and New Deal for Communities.
In practice, national policies such as the New Deal for Young
People are also concentrated in areas of labour market disadvantage
because the individuals who need its help most tend to be concentrated
in those areas.
7. As well as these initiatives there is also the
major exercise aimed at neighbourhood renewal initiated by the
Social Exclusion Unit that involved not just cross Government
working but also extensive consultation with outside bodies and
individuals. The first stage of this exercise has now come to
an end with the publication of all eighteen Policy Action Team
reports.
8. The Policy Action Team on Jobs was an important
element of the neighbourhood renewal initiative. As the report
indicates, its findings and recommendations are contained in Jobs
for All, published by DfEE in December 1999. This report concluded
that labour market disadvantage varied more within regions than
between regions with the greatest disadvantage in major conurbations,
some coalfield areas and some seaside and coastal areas. These
areas are the focus of many regeneration and economic development
schemes (including the Single Regeneration Budget, Regional Selective
Assistance and European Structural Funds) which aim to raise the
overall level of economic prosperity. The report also concluded
that even in areas of low employment jobs came up all of the time
because of the natural turnover of vacancies in the economy.
9. The Action Teams announced in the Budget are a
direct consequence of the Policy Action Team on Jobs report; and
also the renewed interest in the geographical distribution of
employment and unemployment (of which the Select Committee's report
is itself an indication). Fuller information of this new initiative
is included in the attached detailed response.
10. The Policy Action Team on Jobs report, along
with all the other Policy Action Team reports, have contributed
to the Social Exclusion Unit's (SEU) proposed strategy for neighbourhood
renewal. The SEU is currently conducting a consultation exercise
and is expected to report later this year.
Which Groups Are Most Affected [Paragraph 10]
11. The Government agrees that the groups which suffer
most from major labour market disadvantage are the over 50s, those
with low levels of skills and ethnic minorities. Other groups
which also have low levels of employment are lone parents and
people with disabilities. All of these groups are the subject
of major policy initiatives. The Performance and Innovation Unit
recently reported on the labour market position of the over 50s
[Winning the Generation Game] and the Government is considering
its recommendations. The New Deal for 50 plus has already been
introduced. Addressing basic skill requirements is a major theme
of all DfEE policies from pre-school, through school and lifelong
learning and are an important element of all the active labour
market policies. Also, as the report acknowledges, the consideration
of the labour market situation of ethnic minorities is a key element
of the work of the PAT report on jobs.
12. The Government believes that it is important
to address these issues of labour market disadvantage not just
in particular areas but nationally. That is why it has given a
commitment that every young person on the New Deal will be screened
on joining for basic skills problems, and then given prompt help
to overcome such problems. Similarly, there is a national target
of equity of outcome for all New Deal participants to be achieved
by the end of this Parliament. This means that the Government
wants the same proportions of ethnic minorities going into employment
as the population as a whole.
13. The Government also believes that in addition
to providing targeted help on the groups with the greatest disadvantage
in the labour market, it is necessary to provide an efficient
system aimed at matching people with the jobs as they come up.
The Jobseeker's Allowance and the work of the Employment Service
in maintaining regular contact with jobseekers and in obtaining
and filling employers' vacancies are important here. The initiatives
aimed at giving a greater work focus to people on 'inactive' benefits
(including the New Deals for the Disabled and Lone Parents and
'ONE') and the planned establishment of an agency for all people
of working age on benefits are important elements in modernising
the state's role in helping get people get into work.
Barriers to Employment [Paragraph 10]
14. The Government agrees with some of the report's
analysis of the barriers to employment. As the report acknowledges,
it is already introducing changes to lower them. We will consider
carefully the specific proposals in the report and also any proposed
change in scale.
Measuring Employment and Unemployment [Paragraphs
7 & 11]
15. The Government would like to highlight and acknowledge
recent improvements by the Office for National Statistics (ONS)
and the Department for Social Security (DSS) in improving the
range, coherence and availability of labour market information
at a local level.
15. The Government also acknowledges that further
improvements would be useful and there are plans to increase information
on the number of total vacancies as well as Jobcentre vacancies.
There are also plans to provide more information for even smaller
areas.
16. The report also has a number of specific statistical
proposals. Consultations by ONS are already planned on a number
of these. The Government remains unconvinced that it is sensible
to highlight another unemployment rate (the Want Work rate) rather
than give greater emphasis to the employment rate. However, the
information remains readily available if others wish to use it.
The attached detailed responses deals with this more fully.
Measures to Improve the Balance Between the
Supply of and Demand for Labour [Paragraph 12]
17. On local tax structures, the Government is currently
considering the role that fiscal incentives might play in a number
of circumstances. The response to recommendation 25 deals with
this more fully.
18. On local labour clauses, it is for local authorities
to judge how far the needs of local employment should be promoted
in their area working within existing UK and EU legislation. The
response to recommendation 26 deals with this more fully.
New Employment Opportunities [Paragraph 13]
19. The Government agrees that intermediate labour
markets can be an important method of increasing the employability
of individuals. They play a role in many of the Government's programmes.
They provide a bridge between being without work and having a
job in the open labour market. The Government provides a range
of different intermediate labour markets where people who need
to develop employability can acquire useful skills.
20. However, the Government does not see intermediate
labour markets as an alternative to a job in the open labour market.
It is important that we avoid the risk of intermediate labour
markets being used as job creation measures.
21. Similarly, the Government believes that local
residents in areas of labour market disadvantage and groups with
relatively poor employment records can take up and be effective
in public sector jobs. It is important to tap into these currently
unused resources. However, such work should be aimed as providing
quality public services not as a method of providing alternative
work. Otherwise the participants are likely to be considered as
second class with potentially undesirable consequences for how
long the jobs will last.
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