Examination of Witnesses (Questions 900
- 919)
WEDNESDAY 19 APRIL 2000
MS MOIRA
WALLACE AND
MR ANDREW
CROOK
Mr Gray
900. I am sorry. What is the Intermediaries
Fund?
(Mr Crook) The Intermediaries Fund is a fund to support
voluntary organisations that link people with jobs in deprived
areas. My second example was going to be about how you encourage
employment, often self-employment, in deprived areas. The Policy
Action Team on Enterprise, again, found that voluntary and community
organisations can be better at spotting, say, good credit risks
in deprived areas, and they encourage things called Community
Finance Institutions—things like the Prince of Wales' Youth
Business Trust. What has been set up is something called the Phoenix
Fund, which is providing finance to these intermediaries to help
identify good credit risks.
Mrs Ellman
901. None of the things you mention are new,
and the Prince's Trust is only effective when it works with other
organisations, when it does do a very good job. What new ideas
have you got to bring jobs to people in deprived areas? Is that
concept right? Do the jobs have to be in the deprived areas, or
should we be looking at the economy outside? What is new that
you have to bring to ideas and practice which are already taking
place?
(Ms Wallace) Can I add a bit to this? First of all,
I think we should not always feel that we have to constantly come
up with a flood of new ideas and new initiatives when there are
initiatives that are already there. The Deputy Prime Minister
has already talked a little about, for example, RDAs. That is
one point I would make. In terms of how you get jobs into or near
these areas, I think I would really pick up three things. First
of all, do some of the medium to big businesses actually appreciate
the commercial opportunities that there are in these neighbourhoods,
and what can be done to actually convince them that there are
opportunities there? After all, there is money being spent there,
there are people who can be recruited. There are lots of under-used
assets there, so there is a lot of potential there. Have we got
the information and the people who can be making that case—"Why
not come and set up in my neighbourhood"?
902. Who should be doing it?
(Ms Wallace) What we are talking about is, first of
all, improving the information—
903. Who should be doing it? These are general
ideas which we are all very familiar with. The issue is implementation.
Who should be doing these things?
(Ms Wallace) One of the things that—as Hilary
Armstrong made clear—we are backing quite strongly is the
idea of local strategic partnerships, which is about having one
partnership instead of ten, to be more representative, have more
clout and be more effective.
Mr Gray
904. It is all waffle, is it not? It is just
pure waffle.
(Ms Wallace) Do you expect me to agree with that?
Can I finish my answer, Chairman?
Chairman
905. Yes.
(Ms Wallace) So one issue is, can you get medium and
big businesses in? Another is, can you encourage local entrepreneurs,
local self-employment, where people who have looked at that in
detail have found that a lot of the services the Government has
to encourage enterprise have not been focused on these areas?
Mrs Ellman
906. Who should be doing the focusing?
(Ms Wallace) The Small Business Service. Our work
has come out quite clearly saying let us make this one of their
focuses. So that is about supporting enterprise and self-employment
there. The third thing is more complex, but is about looking at
how all the public money which is spent in these neighbourhoods
can be spent in a way that generates local jobs. That is about
how housing is run, child care and all sorts of other programmes
that could help. It is a common complaint that money spent in
these neighbourhoods is often spent on earnings for people who
do not live there. Are there ways you can actually get some of
that money kept in the neighbourhood and turn it into local jobs?
These are difficult things to do, but with a bit of a push there
is a chance we can do them.
907. Does the Social Exclusion Unit have any
power to change how things are done?
(Ms Wallace) The document that we have published is
there as a consultation document, and when people have tested
it out, responded to it and the Government has made its decision,
it will turn into policies which the Government will follow.
Christine Butler
908. The Small Business Service is something
new. What can it do now, as a Small Business Service within the
umbrella of the DTI, that was not happening before? The thing
is, it is all very well saying "We have got these things",
we know that, but what exactly could they do now that did not
happen before?
(Ms Wallace) A lot of this is about targeting the
help that is available to support people in businesses into these
neighbourhoods. It is about going to these neighbourhoods and
actively encouraging people there to try—
Christine Butler: But how? What should they
do?
Mrs Dunwoody
909. Suppose they say "I am being burned
out regularly. I have now got double wire on the doors, I have
got the door locked, I have got special cameras. Tell me how else
I can survive in this area, where people are a rough old lot?"
What is the response from the Small Business Service?
(Ms Wallace) The problem you raise, I think, is a
crime problem and needs a crime response. I would agree with you
about that. What I was talking about was looking at people who
are on benefit at the moment but who could, maybe, get some help
to start a business. Self-employment—
910. How can you start a business? Forgive me,
but there is a limit to my credibility. If you are on benefit
now, where are you going to get the capital and the backing? The
thing that makes most small businesses fail in this country is
not just poor management, it is lack of capital; they have to
have enough money to keep them going to become viable. It is not
a difficult economic lesson, it is one that we have learned over
generations. What is the point of saying, seriously, that you
think people can come off benefit into a business of their own
unless you talk about money? Where is the money coming from?
(Ms Wallace) There is money for this. The Government
has already announced a fund of about £30 million for what
is known as Community Finance, which is dealing exactly with the
problem you are mentioning, which is that it is very hard to borrow
money if you have not got any money to start with, or if you have
not got any capital. There are very good examples of bodies—often
grass roots, often supported through some charitable foundation
or other—that are much better prepared to take the risks
and lend to people who do not have the track record and who do
not have capital. The Government is putting £30 million or
so into supporting that. That is quite a practical thing to help
with the problem you describe.
911. That is limited by a number of conditions,
as you very well know. I think we need to know what is it you
are suggesting that is different?
(Ms Wallace) I can write to you and give you lots
of detail about how that fund is supposed to work, but its whole
aim is to be flexible and to serve people experiencing the very
problem you are describing.
Chairman
912. Is the fund working?
(Ms Wallace) It has only just started, so it is impossible
to say.
Mrs Butler
913. Would it not be possible to force the issue
a little and say to, maybe, education establishments, bigger businesses,
local authorities—depending on what you have locally—"We
will work together to get the end we want"? For instance,
in Castle Point I am now asking Anglian Polytechnic University
if they would shelter, as it were, incubator units in a new franchise
they are developing locally, and they are saying "Yes, that
is good, because that cuts down overheads and when these small
people are ready they can be fledged and new people brought in".
That is one idea. Where are the movers and doers? What framework
are you creating for things to happen? I am just sorry we have
not got the detail here at all.
(Ms Wallace) The report we published last week, effectively,
agrees with what you are saying, that very often you have a lot
of people in a neighbourhood, all of whom can see the problem,
but all of whom have another day job, and it is very time-consuming.
They have to fit the very kind of championing you are talking
about into the margins of their busy day. What we are trying to
do is stop wasting some of these people's time in endless meetings
and endless form-filling, and give them more flexibility and single
mechanisms they can work in that we are prepared to work with,
rather than saying "No, you have got to set up a partnership
initiative". That will enable some of them to do the very
championing you are describing.
Mr Cummings
914. In your report you say that the real problem
with deprived neighbourhoods has been the failure of mainstream
services by local authority and national government. Why have
they been so bad? Can you point to any specific examples of a
failure by local authority and one by national government?
(Ms Wallace) I think the failure issue is a very complex
one and has a variety of strands to it. One is that a lot of mainstream
services—and this is the point I was making earlier—have
never been asked to prioritise deprived areas and I think that
can tend to bias services towards areas where it is easier to
achieve results. Another issue is simply about whether mainstream
policies are designed in a way that is going to work. Often they
are designed around different presumptions and they do not always
back things that actually work quite well, which are often run
by the community. The third issue is funding, where the report
is quite open about a number of pieces of research that suggest
that funding for some mainstream services seems to be pretty variable
and does not always seem to get to the areas that you would think
need it most. There are also issues of recruitment, staff training—can
you actually get people into the areas that need it most? Just
to give you one example of that, some research was done on GPs
and where they would like to set up. Perhaps unsurprisingly, the
overall outcome was that on average GPs said they would give up
£5,000 a year not to work in an inner city. That was the
price they put on that. There is also evidence about schools,
where there are going on for 500 secondary schools in England
that have more than a third of children on free school meals—so
a deprived set of pupils. Of those, only 11 make the national
average in terms of GCSE results. Those are some of the hard facts
about the results.
915. You are not telling me anything I do not
know already, and I am sure the same applies to many Members sitting
here.
(Ms Wallace) I am sure it does.
916. What, precisely, is the kernel of what
you are getting at?
(Ms Wallace) The kernel is that we need to start focusing
these services and funding their targets—
917. Are you going to start?
(Ms Wallace) Yes.
918. Every report is prefaced by "We need
to". When is someone going to turn round and tell the Committee
"We have done it"?
(Ms Wallace) I think this comes back to the point
I made earlier. We are talking about a consultation document here.
In a few months we will be able to tell you what was decided.
Mr Cummings: When are you going to tell us that
something has happened?
Chairman
919. Should there not be a public debate about
it?
(Ms Wallace) That is why we launched the consultation
document.
|
