Select Committee on Education and Employment Third Report


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



1. The Employment Sub-committee has devoted much of its time in this Parliament to monitoring the development and implementation of the various strands of New Deal. We have produced three Reports on the New Deal for Young People and another which examined the New Deal for Lone Parents.[1] Our Report on Opportunities for Disabled People examined the New Deal for Disabled People in particular.[2] We have broadly supported the New Deal Programme which has benefited many young people. We have nevertheless been consistently aware that New Deal has not solved all of the problems faced by unemployed people when seeking employment. In our Report on Employability and Jobs in particular, we sought to emphasise the need for a co-ordinated response on the part of Government to structural unemployment and explored other barriers to employment which unemployed people have to overcome such as prejudice, low-skills levels and access to information on vacancies.[3] In this Report we have focussed on the means by which the Government, the Employment Service and employers can help unemployed people into jobs, and into jobs that match their abilities and aspirations, and by doing so, extend the range of talents available to employers. In August to October 2000 there were 1.62 million unemployed people in the UK (using the International Labour Organisation's definition of unemployment), an increase of 36,000 over the previous quarter. Of those 422,000 had been unemployed for twelve months or more.[4]

2. The Employment Sub-committee's inquiry into the recruitment of unemployed people was influenced by three other factors in particular. It was aware of evidence which indicated that unemployed job seekers are disadvantaged in the search for employment by poor recruitment practices on the part of employers. It recognised that the tighter labour market conditions which currently prevail mean that employers need to find new pools of labour from which to recruit.[5] It was also concerned that existing methods of intermediation (see para 25) appeared to have failed to engage fully employers and were not meeting their needs.

3. The Sub-committee also wished to determine whether the demand-led (see para 4) approaches to labour market intermediation which have emerged and developed in the United States, and which are now being championed by the Government here, could help to improve the employment prospects of unemployed people and to improve their chances of retaining a job once in employment.

4. Labour market intermediaries that seek to bring job seekers and employers together are not new. Recently, however, an alternative approach to matching job seekers and recruiters has begun to emerge, with organisations adopting a demand-led, or employer-orientated, strategy. Demand-led intermediaries seek to develop a solid understanding of the employers' recruitment needs as the starting point for their activities, targeting employers' vacancies specifically or skill shortages and then matching job seekers to those demands, often by equipping clients with the specific skills required for a particular employment opportunity.[6] Some will view employers as their main customer; others will view employers and job seekers as dual customers.

5. We wish to record our gratitude to those who assisted during the inquiry. The Sub-committee took oral evidence on seven occasions from a range of organisations including employers and their representatives, expert commentators on employment policy, labour market intermediary organisations, private employment agencies, the Employment Service and Rt Hon. Tessa Jowell MP, the Minister for Employment, Welfare to Work and Equal Opportunities. The insight and expertise provided by these witnesses was supplemented by written submissions from a broad range of organisations and interest groups. The Sub-committee is particularly grateful to those institutions and individuals it met during visits, both in the UK and during its visit to Washington and New York in July 2000, for their generosity with both their time and expertise, from which we have benefited greatly. We also wish to record our appreciation of our specialist advisers for this inquiry, Dr Dan Finn, Reader in Social Policy at the University of Portsmouth, and Mr Dave Simmonds, Director of the Centre for Social Inclusion.

6. The inquiry has largely focussed on the links between employers with vacancies and those in search of employment and the means of bringing the two together. The Employment Service has a pivotal role to play in the process as a mediator between and an adviser to both groups. The inquiry has shown that in some areas, especially in relation to services for employers, the Employment Service is not performing as well as it might. Nevertheless we acknowledge the great improvements that have been made in the Service's provision for employers in the last three years and the progress towards its change into a more employer-orientated organisation. The Employment Service should not be allowed to be deflected from this important task.

7. We also acknowledge the pivotal role that some intermediary organisations play not just in placing unemployed people in jobs but in assisting them into sustainable jobs with good prospects. The successful development of further demand-led intermediaries will be a key factor in improving the employment prospects of unemployed people in the short to medium term.

1  Second Report from the Education and Employment Committee, Session 1997-98, The New Deal, HC 263; Eighth Report from the Education and Employment Committee, Session 1997-98, New Deal Pathfinders, HC 1059; Eighth Report from the Education and Employment Committee, Session 1999-2000, New Deal for Young People: Two Years On, HC 510. Back

2  Ninth Report from the Education and Employment Committee, Session 1998-99, Opportunities for Disabled People, HC 111. Back

3  Fourth Report from the Education and Employment Committee, Session 1999-2000, Employability and Jobs: Is there a Jobs Gap?, HC 60. Back

4  First Release: Labour Market Statistics, December 2000, Office of National Statistics, p. 3. Back

5  Q. 82. Back

6  Q. 52. Back

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