Select Committee on Education and Employment Fifth Special Report


The Education and Employment Committee has agreed to the following Special Report:—



The Education and Employment Committee reported to the House on Recruiting Unemployed People in its Third Report of Session 2000-01, published on 7 February 2001 as HC 48. The Government's response to that Report was received on 23 March 2001. The response is reproduced as an Annex to this Special Report.







1. A detailed response to each of the Employment Sub-committee's recommendations is set out in Annex A. This covering note outlines the background to those recommendations. It follows the order of the introduction at paragraphs 8-61 of the committee's report.

Employers' Recruitment Practices [Paragraphs 8-17 of the Introduction to the Report]

2. 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. It is committed to meeting the crucial challenge to improve employment opportunities for long-term unemployed people. Our aim is for at least three quarters of the population of working age people to be in work and the Government increasingly recognises the part improved links between employers and this group of jobseekers can play.

3. As the report concludes, the attitudes of employers towards certain groups can act as a barrier to employment for many unemployed people. Many employers prefer to recruit people who are either in employment or who have a recent employment history. Even when employers are keen to recruit unemployed people, they may be using recruitment criteria or processes which discriminate against unemployed applicants; for example, specifying qualifications or experience that are not really necessary to do the job, or failing to notify vacancies to the Employment Service.

4. That is why the Government has set out a range of measures to encourage employers to recruit unemployed people. We believe that if these policies are effective in bringing more people into the world of work then more vacancies can be turned into jobs rather than remaining unfilled.

Overcoming Barriers [Paragraphs 27-35 of the Introduction to the Report]

5. The Government's strategy has been to extend the opportunity to work to all and thus reduce the proportion of working age people living in workless households. For people at a real disadvantage in the labour market, the success in finding sustainable work depends on the extent to which the barriers that prevent their employment can be removed or overcome. The Government believes that it is important to address these issues of labour market disadvantage. Policies and resources are aimed at helping those who are most disadvantaged, including those outside or excluded from the labour market, putting in place measures that will help them compete for the jobs available.

6. That is why the Government 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. Addressing basic skill requirements is a major theme of all DfEE policies and is an important element of all the active labour market policies.

7. The Government has also introduced Work Trials. Their aim is to overcome caution on the part of both employers and long term unemployed people. Evaluation of Work Trials found that they are an effective way of helping jobseekers into work. Six months after participating in a Work Trial jobseekers are much more likely to be in work than members of a comparative group who have not participated. Moreover, whether or not a Work Trial participant was successful did not vary according to their age, sex, ethnic origin and period of unemployment or level of qualification. This indicates that Work Trials offer a genuine opportunity to people who might not be considered by employers using conventional recruitment methods.

Mainstream Intermediaries [Paragraphs 36-46 of the Introduction to the Report]

8. The Government believes that in addition to providing targeted help for 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 Jobseekers 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 crucial elements in modernising the state's role in helping people get into work.

9. The Government agrees that to focus on employers alone as principal customers would risk losing the Employment Service's distinctive role in helping the most disadvantaged jobseekers. It agrees also that the closer the Employment Service is to understanding and targeting employers' needs, the better it will be able to serve those seeking employment.

10. That is why the Government has set up the New Deal Innovation Fund. In addition to the Employment Service we know there are many other organisations providing support for people. These organisations can offer value independently from statutory agencies; they can act as an intermediary between client and employer, providing an effective link between employers' needs and the labour market.

11. One of the principal objectives of the Fund is to test the intermediary approach. Intermediaries can be public, private or not-for-profit and need not be New Deal contractors. The Employment Service can bid or form partnerships, and we are keen to see increased involvement from local authorities, which have a clear understanding of local needs and aspirations. We believe that using intermediaries can offer a valuable way of building on the support already available from the Employment Service. Intermediary organisations can provide specialised pre-employment and post-placement services. They can help unemployed and disadvantaged people to get, keep and advance in jobs and careers. They help to define business requirements and offer assessment and then education and training that are specially customised for employers. Many provide support services and skill development after job placement along with training for front line supervisors. They have an employer-focused, demand-led approach.

Demand-led Approaches [Paragraphs 26-57 of the Introduction to the Report]

12. The UK Government believes there are few organisations in the UK capable of delivering demand-led strategies at present. That is why the Government launched the Innovation Fund in 1999. The underlying principle of the Fund is that although New Deal has made good progress in helping people to get and keep jobs, the challenge remains to undertake a programme of continuous improvement in the services New Deal provides. We want to focus on identifying what employers want—the demand—and ensuring our clients can meet those needs—the supply. We believe that the better a programme meets employer requirements, the better it will be at helping unemployed people succeed in the workplace. This will help jobseekers—and especially the most disadvantaged—to secure better paying jobs and achieve economic self-sufficiency.

13. Wildcat is an American organisation that provides training and technical assistance for intermediaries interested in implementing a demand-led approach. Like the Employment Sub-committee, we welcome Wildcat's willingness to share its expertise in accelerating the development of demand-led strategies. Through the fund, the Government has set aside £9.5 million to support the development of demand-led intermediaries in the UK. £5 million of the fund has been ring-fenced for use in the 11 inner-city areas where there are Employers' Coalitions. The objective is to support inner-city intermediary organisations in developing demand-led strategies that will increase the placement, retention and progression of unemployed people in work. The remaining £4.5 million is to be used to fund the same objective for the rest of the country as well support continuous improvement projects under New Deal.

Expanding the Role of Employers in Employment Assistance [Paragraphs 59-61 of the Introduction to the Report]

14. The Government agrees that employers should be encouraged to develop a commitment to the community, and that recruiting from the ranks of the unemployed is a practical demonstration of such a commitment. Some employers have moved in this direction through their active involvement in Employers' Coalitions and through membership of New Deal Partnerships.

15. Over the last three years the Employment Service has been engaged in a major programme of change to deliver improved services to employers and to involve them more fully in developing the Employment Service's operations and initiatives. The active involvement of employers is critical to the successful development of intermediaries and demand-led recruitment strategies.

16. The Government notes the Employment Sub-committee's comment on the future nature of the Employment Service. It is essential that the Employment Service continues to accord high priority to helping into work those who are most disadvantaged. This is entirely consistent with its position as a public service agency and with giving the needs of employers' equal treatment. The more the Employment Service can come to understand the needs of employers the more it can place suitably qualified clients in the right jobs.

17. Employers too have a role here. There is a hardheaded business case for employers to recruit from the ranks of unemployed people, particularly when there is a tight labour market. Earlier intervention from employers will ensure the provision of an adequately skilled workforce. Getting the right people into the right jobs eases bottlenecks, skill shortages and reduces the risk of inflationary wage increases. With better matching of people and jobs it will be possible to run the economy with a higher level of employment and lower levels of inflation.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 30 March 2001