Select Committee on Education and Employment Minutes of Evidence

Examination of Witnesses (Questions 1 - 19)




  1. Professor Millar, thank you very much indeed for coming to see us and also for the book which you have just recently published. We have only got the one copy and although some of our staff have managed to assimilate it, I do not think the Committee has as yet got to grips with it. The New Deal is not only the most expensive - and I had better say the most generously funded - programme of this nature in my 30 years of political life, but also the most evaluated. We as a Committee thought was rather good. We like to see programmes being properly evaluated, and you have looked at a lot of these evaluations, as I understand it. We would like to ask you what lessons can be learned from evaluation of the New Deal and its performance and how do you think it might be developed in the future?

  (Professor Millar) Thank you very much and thank you for the opportunity to come along and give evidence to the Committee. As you pointed to the report that I wrote on behalf of the Joseph Rowntree Foundation, I should say it was really a synthesis of existing evaluations, so it is not based on any new research of my own. What I did was look at all the reports that had been published (by the Government mainly but also some independent reports that have looked at all aspects of the New Deal) and what the report does is try and look across all the New Deal programmes because each of them, of course, has been evaluated separately, and what I was trying to do was look across the New Deal programmes and see what we could learn by thinking about similarities and differences across the programmes. I agree with you that it has been very extensively and well evaluated. That is still going on. A number of reports have come out since I completed mine, so that is a major exercise. The first thing I would say is that it reinforces some of the things we already knew, if you like, about unemployed people and workless people and their circumstances and their orientations to employment and so on. It showed that the majority of unemployed people are keen to work and that they are ready to enter programmes that they see as offering them real help and support. They are sometimes rather pessimistic, perhaps not surprisingly, about their chances of finding work and they often face a number of significant barriers to doing so. So their position in the labour market can be quite difficult. Some of these barriers apply right across the groups that have been targeted. Some of the things to do with lack of skills and experience, recent work and jobs in the neighbourhood apply across the board, but there are also more specific skills for different groups, for example for lone parents things like child care come up very prominently. There are similarities and differences across the groups. There is also a wide range of work readiness within different groups and between different groups, so it is a challenging set of people that are the targets of these policies, I think it is fair to say, in relation to the labour market. The second thing I would like to say is I think it is true that labour market programmes such as these are not going to be a panacea, they are not going to solve the unemployment or workless programme very quickly, they are not going to get everybody off benefit and into work, but they can make a difference, and I think evaluation will show that they have made a difference for a range of people across the board. That is true for some groups more than others, probably most successfully for the young people, and I think that may be at least partly to do with the resources. You started off by saying it was well-resourced, and the New Deal for Young People is particularly so. I think it has helped people get into work. It has also helped people get into training and helped people improve their confidence and their knowledge about employment. It does not mean necessarily that people will be seeking work immediately. Some groups, like lone parents for example, need information about employment opportunities but that does not necessarily mean they can readily enter employment. I think it has made a difference. The third thing I would point to, which is perhaps a surprise, is how important the personal advisers have been in this process. I think this comes out across all the research studies and it comes across constantly from the point of view of the participants themselves, from the point of view of employers who are taking people on through the New Deal, from the point of view of training providers, and so on. It comes across the board this recognition that the personal advisers are playing a very important role in the whole New Deal process. Indeed, for some groups like the lone parents there is not much more to the New Deal than the personal advisers at the moment, that is what the scheme is all about, and the role they have been given is a challenging role and quite a changed role for many people in terms of the jobs they were doing previously, and I think generally they have done this very well. I think the responses have been generally positive towards the personal advisers. I think that has been an important part of it. You asked me also about where we might go on from here. You are in danger of getting a long shopping list at this point so I will try and highlight a few key issues. The issue of training is very important. There is of course an on-going debate encapsulated sometimes in the work first versus human capital debate. Should you be trying to get people into employment and then allowing the labour market to help them improve their position or do you need to give more training to people? It is clear they both play a part for different people at different times, but the training element has been a very important part of it. It has been important for legitimacy, for getting away from the notion that this is just another scheme—"Here is another scheme I have got to fulfil in order to get my benefits." It is important for motivating people and keeping them interested, and obviously also important for skills development. I think the issue of training and where we go with that is important. I think structure is important. The possibility of discretion and flexibility has been an important part of the implementation, but I think particularly outside the compulsory programmes when you look at voluntary programmes there seems to be a bit of a danger of drift. People are not sure once they have had their initial interview what happens next, where should they go, and I would like to see more structured options like you get in the New Deal for Young People and the New Deal for the Long-Term Unemployed in the other programmes as well. I think we could have a bit more structure alongside flexibility. Having said that, the third point I would make is there are four options in the New Deal for Young People at the moment, education training, subsidised employment, and then the voluntary and the environmental options. I am not sure why we should not roll those into two options, why the environmental and voluntary cannot be seen as just another form of subsidised employment, so subsidised employment in different sectors. I think that might help some of the issues of stigma, if you like, that have arisen around those programmes. The fourth point I would make is about the hard to help and the people most distanced from the labour market. The programme so far has probably helped best those nearest, and that in a way is no surprise, that is what is going to be easiest to do, but the question of what you do with the people with the most barriers and who are the hardest to help is, I think, an important element for the future. Another important element concerns retention in jobs, sustainability, and how far we need to think about following people more into work and offering support to enable people to retain employment, not just get into employment. The final point I would make—sorry, I am rather giving you a lecture here—concerns women. I think one of the exciting elements of the New Deal is that it has brought many women into labour market programmes who previously have not been offered many opportunities for labour market training and so on. I would like someone, maybe this Committee, to take a look across the board at what is happening to women in these programmes, what support they are getting, how does it fit with other areas of policy outside the New Deal programmes in relation to women returning to work and maternity leave and family friendly employment and so on. I think that whole gender issue is an important one that I would like to see addressed as a specific issue too.

  2. Thank you very much, that was very comprehensive and rapid speak, if I may say so, which is very welcome because we have not got a lot of time. If I can ask one more question before passing on to my colleagues. One of the purposes of your recent report was to examine the programme's impact on the labour market. Is it possible to separate out the New Deal's impact from, say, the state of the labour market itself, the growth of the economy and other things? If so, how have you been able to do that?
  (Professor Millar) I think I am not necessarily the best person to ask about this because it is a fairly technical issue and I am not an economist. I am sure that some of the people you will be talking to later will be able to give you more detailed answers on this. My short answer would be that it is very, very difficult to isolate out the effect. The New Deal is being implemented at a time when the labour market is favourable, but also alongside all these other policies, in particular the Making Work Pay policies and Working Families' Tax Credit and so on. It is terribly difficult to isolate those effects. What we are looking for and, indeed, as I understand it, what the Government is trying to do, is engineer a larger change and it then becomes very difficult to isolate particular elements of that.

Mr Twigg

  3. Can I move us on to the whole area of evaluation. As the Chairman said, it is a well resourced programme and, therefore, the processes of evaluation are particularly important, and that is what your work has focused on. Could you tell us broadly how effective you think the Government's evaluation of the New Deal has been so far?
  (Professor Millar) There are different ways to approach the evaluation of these sorts of programmes. What you are always trying to do is look at the effect of these compared with if the programme had not existed, as it were, so you are looking for the counter-factual. There are different ways into trying to assess what that would be. The purist approach, you might say, is the experimental design approach where you assign some people to the treatment group and some to the control and you look to see what has happened. That generally has not been used and, personally, I think for very good reasons, although there are a range of views on this as well. I think experimental design methods work best when you are looking at a quite specific thing, when you are looking at one effect and trying to work it out. It is quite difficult if you have got a broader range of things going on.

  4. Because you would need so many different control groups.
  (Professor Millar) Absolutely, you have got so many different things going on. The other very key problem with the experimental design is that you want to be sure that the control and the experimental group are both not affected, if you like. What we have is a well publicised set of programmes that people know about, that are part of a Government policy which is to do with encouraging people to work and so on, and it is difficult to imagine a control group that has not, if you like, been influenced by this in some sort of way. If not the control group themselves, the people working with them, the advisers and so on. I think experimental design is quite tricky. What the evaluations here have more often used is comparison across sites, so you set up a control area and an experimental area. Then, of course, the difficulties are you want those two areas to be the same and you want the same things to be happening to them, the only difference has to be the operation of the programme which is, again, very, very difficult to achieve in practice. I am sure you will hear from other people who are more competent than I am to talk about the statistical modelling that you can do to take that into account. Broadly speaking, that has been the approach. The third thing you can do is pre and post, compare with what previously was the case, but then how far you can isolate the effect of the programme out of that is quite difficult. To try to answer your question more directly, the main focus has been on comparisons across areas and that is probably the right way to go about it because, in terms of the schemes we have, it would be difficult to adopt other methods. I think the results that we have seen are probably as robust as it is possible to be, but there are margins of error attached to this.

  5. Are there any particular improvements to the evaluation methods that you think the Government could make for the future?
  (Professor Millar) That is an interesting one. I think there is an issue about outcomes and what we are measuring. The outcomes of the New Deal are about getting people into work but they are also about employability. The issue of what we mean by "employability" and how we measure it is a tricky one to grapple with, and I am not going to give you any answers, I can tell you, because I do not know. We need to think hard about if we are serious about employability as a measure, ie moving people closer to the labour market and making it such that they can move around within the labour market, which is also an important part of employability. We need better outcome measures that take that into account. How you do that, which you are bound to ask me, is very difficult, but we could be looking at things like training programmes, skills gained, qualifications gained. We could be looking at people's attitudes and their approaches to job search and to employment. We could be looking at things like moves into part-time work, certainly for some groups, like lone parents, where there is a policy in that direction. We probably need a range of measures but I think they are all important.

Mr Allan

  6. Could I just ask is your understanding that at the moment the only outcomes that are measured are these ones about sustainable jobs and getting into jobs, there is no evaluation as to whether a year after going on a New Deal programme somebody has acquired additional levels of education?
  (Professor Millar) No, I do not mean that. The studies have used a range of different outcomes. They have used things like people getting into employment. They have used exit rates from benefit as another measure but, of course, that is not necessarily getting into employment because people can exit benefits for other reasons.

  7. Not the skills and training gains, that does not figure as far as you are aware?
  (Professor Millar) It does not figure very heavily in the evaluation so far, I think it is right to say, and probably should figure a bit more. I think the other thing that has figured, and also needs to figure, is incomes in work and what actually happens to people as they move into work, so to what extent are people moving into jobs that are providing them with an adequate income? I do not think the programmes are about employment at any cost in terms of the individual, so what we would want is people moving into jobs where they are not in poverty, as it were. Those sorts of outcomes have been part of the measurement and should continue to be part.

  Chairman: Stephen?

  Mr Twigg: I think all of the supplementaries have been covered in the answer.

  Chairman: Richard?

Mr Allan

  8. If I could move on to the issue of compulsion, which was one of the more contentious elements. The no fifth option was seen as a novel element in New Deal and it is in two of the New Deal programmes, the Long-Term Unemployed and the Young People, but not for Lone Parents and Disabled People. In your research I wonder if you found any key findings on the area of whether compulsion had a negative or positive impact on any group?
  (Professor Millar) It is quite tricky to do that comparing across the programmes here because they are such different client groups with such different needs and starting from such different positions in relation to their knowledge and experience of being involved in job seeking and being involved with the Employment Service and so on. I do not think we can draw any easy comparisons, for example by comparing the young people and lone parents. There are too many differences across them. I think in relation to understanding compulsion we can look a little bit at other countries, although you have always got to be careful, as you know when you look at other countries, because of all the other things that are different, However, I still think we can look at how compulsory schemes have operated elsewhere. For lone parents, of course, America is the obvious example there. I think the latest evidence in America suggests that heavy compulsion does not produce any better outcomes but some degree of compulsion does help. You have to temper that with the recognition that the American context is very different and support for the ideas that groups like lone parents should be in employment is much, much stronger. The support amongst the people administering the scheme and the support amongst the participants themselves is much, much stronger. If you look at a counter example in the Netherlands, where they introduced a compulsory scheme for lone parents, what tended to happen in practice was there was not a lot of support for it amongst lone parents nor particularly amongst the workers who felt it was not really appropriate for lots of lone parents. What you got was lots of people being exempted. When you look at compulsion you also need to look at who is in the schemes and who is being exempted and left out of them. That is an important part in understanding what is going on because compulsory schemes to some extent may achieve their success by exempting people who are not going to move forward. The other thing you could look at in relation to compulsion is what the personal advisers and what the participants themselves thought about the issue of compulsion. There you get mixed views, perhaps not surprisingly. There is not a lot of support for strong compulsion across the board because there are different views about different groups. I think that reflects pretty fairly views more generally. There is stronger support for the idea of compulsion in certain circumstances, for example with the long-term unemployed people in certain circumstances, where it may be felt that it will be necessary to help them take up the opportunities offered by the scheme. There is more compulsion about getting people into programmes, less about insisting they take different options on that, and again you can see the logic of that because if you put people who do not want to be there into the options you are going to make it much more difficult for those options to work well. There is less support for compulsion for groups like lone parents where it is seen that they have other obligations and other responsibilities in terms of looking after children and also for disabled people to some extent and for some groups amongst the long-term unemployed where there is concern that compulsion is blaming people for a circumstance that is completely beyond their control. Why should they be compelled into something when it is not their choice or attitudes that are preventing them moving into employment? It is quite a complex issue and we need to tease out compulsion at what stage and what are the sanctions and how are they going to be applied and so on. There is no one answer.

  9. One of the specific concerns was the impact compulsion would have on those who are already marginalised. I think of those who probably follow the categories, almost as you describe it, of the "deserving" and "undeserving" poor. Some people might classify those as the undeserving poor because they are young and able to work but have other problems, for example drug or alcohol abuse and other things that make it very very difficult for them to adapt to a programme. Was there evidence looking at whether compulsion added to social exclusion in terms of those kind of people, and in particular the evaluation of the disappeared? There is a large category of "destination not knowns" for people initially called into the New Deal.
  (Professor Millar) I am not sure if I know the answer to that. I would hate to ever divide people into the "deserving" and "undeserving". The extent to which compulsion forces people out of schemes is a real issue that needs to be considered. To what extent by making things compulsory are you preventing people who could otherwise benefit from the scheme? There is some evidence that suggests that compulsion in the options when people are being sanctioned for things like non-attendance and bad time-keeping, or whatever, can be applied sometimes quite insensitively, ie you have got to be very aware of the needs and circumstances of the people. There may be very good reasons why people are unable to comply with conditions. If you are talking about groups of people with multiple difficulties, there may be very good reasons why they are unable to fulfil the requirements. You have to be very careful how sanctions are applied to particular groups.


  10. Can we turn to the Gateway period just for a few moments. In your study you recognise that there is a wide variety of perceptions about the Gateway period. To what extent do you think those perceptions reflect the differences between the individuals concerned, their needs and abilities, and the difference between the levels of competence of personal advisers, or other factors?
  (Professor Millar) Again, that is going to be quite tricky to disentangle. Clearly for the individuals as they come into the Gateway that is an important part of it and you are right to say that people come with both very different competencies and expectations about what they are going to achieve from it. Some people come with a very clear view of what they want to do. They know what they want to do and they just want the advice and the help and the information. If that advice, help and information is not forthcoming then they are not very satisfied with what they have been getting. Other people come forward with much less idea of what they want to do. This is back to the skills and training of the personal advisers. It is very important the extent to which the personal advisers are able to spend the time with them and have the skills to tease out what it is that people are hoping to get, what skills they already have, and how that can be built upon. So I think it is a combination of these different expectations from the individuals that come forward and the extent to which personal advisers have the time, the resources and the skills to really carry out a diagnostic assessment of what people need.

  11. Do you therefore welcome the introduction of the basic skills training and intensified Gateway?
  (Professor Millar) I think there is a role for more basic skills training. The evaluation evidence suggests that a proportion do come forward with quite severe problems of literacy and numeracy and clearly there is a need for some basic skills. I think it is important not to get too fixated on lack of basic skills. It is there in the New Deal for Lone Parents, for example, some people were very frustrated when they came into the programme to find they could not develop skills, that they were not able to take longer training programmes, that they were not able to go for higher education or higher skills, and so on. I think the focus on basic skills is important but it needs to go alongside the recognition we are talking about also of quite a wide range and we should also be concerned about allowing people to develop higher skills as well—back to the issue of employability if we want to improve their position in the labour market

  12. Are you able to draw any conclusions about the length of time that various people need to spend on Gateway?
  (Professor Millar) There is not one answer is the answer, as it were. I do not think the evidence suggests that the four months for young people and six months for the long-term unemployed is wildly wrong, but I think the evidence suggests that there is a need for flexibility around that. Particularly in the sense that as you get closer to the Gateway period, in a way the Gateway becomes less useful because people are starting to fix on the next stage. I think for some individuals a greater degree of flexibility would be helpful.

Mr Twigg

  13. When we were talking earlier on about the evaluation, you put great emphasis on outcomes and I want to look at the options and evaluation of outcomes from the different options now. I know you touched on this before but could you say a little bit more about how far from your study you feel that the New Deal itself has increased the employability of those who have been through the New Deal? Can you give us an idea if there is a significant difference in the quality of outcomes according to each of the four different options as they stand on the New Deal for Young People?
  (Professor Millar) You focused on the New Deal for Young People, if I can also talk about the other New Deal programmes because I think that is important.

  14. It can be broader, yes.
  (Professor Millar) In the New Deal for Young People I think there is evidence from all the options that they have helped improve employability if we look at things like skills and motivation, there are positive outcomes. I do not think we should forget the people that we lose along the way as well, and we have already mentioned that, the unknown destination people. I think they are an important part of the whole picture.

  15. Absolutely.
  (Professor Millar) Of the people who are in the options, I think their assessment has generally been that they have found it to be useful for them. For the young people, they have got their eye on the labour market, they want jobs and they want skills, so what they see as useful is options that help them do that, so the employment option is the most popular. The Full-Time Education and Training option is also a popular option. The environmental and the voluntary are less popular and I think that is because they are less seen as imparting work skills that employers are going to want. There is a difference across the options, and that is partly why we need to look at the environmental and voluntary options and think about how they might be improved, because I think they are the least successful. On the other New Deal programmes and how far they improve employment, I think that goes back to something I said at the beginning about the lack of training options as a clear option. That is not to say there is not training available, for example, in the New Deal for Lone Parents or Disabled but those voluntary schemes have focused more, in a way surprisingly when you think about the client groups, on getting people straight into work and less on training them and that is something for those other schemes to think about, how far they may also address training issues.

  16. Going back to particularly the environmental task force but also the voluntary sector options within New Deal for Young People, you said earlier on that one possibility is to move to two options. Are there other ways in which you think we can improve the situation where so few people are going for, in particular, the environmental task force option?
  (Professor Millar) Yes. We could pay them more.

  17. Right.
  (Professor Millar) It is an issue, low pay on these options, and also the feeling that you are being exploited. People are willing to accept low pay if they feel that they are getting valuable training and work experience that is going to stand them in good stead.

  18. Which they feel they are getting with the employment option?
  (Professor Millar) They are certainly more likely to feel it. Whereas if they feel that they are providing cheap labour and not getting a lot out of it themselves then they are less positive about it, not surprisingly.

  19. As I understand it, there are a lot more mandatory referrals to the environmental option. Is there a tendency for the personal advisers to see it as the last resort and push people in that direction?
  (Professor Millar) I think there is a bit, yes. There is some evidence which suggests that it is seen as a last resort option. People who go for the employment option are more work ready people anyway. That would then suggest, if you are looking at those options, that the issues of training should be more central to them and not less.

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