Memorandum from Greater Manchester Low
The Greater Manchester Low Pay Unit is an independent
research and information body which provides advice on pay and
employment rights to employees, employers and other organisations,
and which undertakes research on a range of issues including employment
trends, local labour markets, pay and the interface between welfare
The Unit has regularly contributed to the welfare
reform debate. In addition the labour market position of young
people had been an issue of consistent concern and the Unit has
carried out research in this area particularly in relation to
the minimum wage. In the autumn of 1999 the Unit published a report
"Rhetoric and Reality: The Impact of the New Deal on Young
People". This report drew on the actual experiences of
young people on the New Deal and was widely distributed including
to members of the Education and Employment Committee.
The purpose of this brief paper is not to reiterate
the concerns that were raised in that report but instead to highlight
the practical problems experienced by a New Deal provider. In
the course of our earlier research on the New Deal, which primarily
focussed on the views of young people themselves, it became clear
that there were also a number of concerns amongst those delivering
the New Deal, particularly in the voluntary sector.
The government's extensive evaluation of the
New Deal means that there are already many research studies and
statistics which consider the questions of sustainable employment
and young people's experiences. Therefore, the Greater Manchester
Low Pay Unit thought it would be opportune to consider the issues
of concern that have been raised by a New Deal provider in the
A VOLUNTARY SECTOR
This brief paper is based on discussion with
both a New Deal provider and the young people placed with that
provider. The discussion took place at a workshop organised by
the New Deal provider during their AGM. In addition a few young
people made further comments via an anonymous questionnaire.
The New Deal provider in question is a Citizens
Advice Bureau (CAB) which provides placements on the voluntary
sector option in either advice or administration. The New Deal
has different delivery arrangements across the country. One scheme
in the North West is run by the City Pride Partnership (CPP).
The CPP has created what is commonly known as
an "enhanced" New Deal. This means that the voluntary
sector option lasts for 12 months rather than the standard six
months and the young people are paid a weekly wage equivalent
to the minimum wage. The enhancement has been made possible through
the use of funding from various sources including the New Deal,
the European Social Fund, and the Single Regeneration Budget.
The New Deal is delivered through local partnerships with Employment
Regeneration Partnerships (formerly TECs) playing a leading role.
The CAB is located in the area covered by the
CPP and they saw the enhancement of the voluntary sector option
as an extremely good opportunity for young people. The CAB started
out with an optimistic view about how they could contribute to
the New Deal programme. They rightly regard themselves as good
employers who have a long track record of helping volunteers gain
skills and experience to enhance their future job prospects. Therefore
they thought they would have a useful role to play in the programme
in helping young people become "job ready".
It is worth noting that CABx located outside
the City Pride area have reported that they did not feel able
to participate in the New Deal. The reason being that a straightforward
six month placement is, in their view, not long enough to train
and provide someone with skills and experience. Previous research
by the Unit raised the question of the inflexibility of the options.
This reinforces that point. It would be beneficial to young people
if the government were to consider being more flexible over the
length of time of the options. The current restriction to six
months for the voluntary sector option means that good opportunities
for young people are being missed out on.
The government's claim that the target of moving
250,000 young people off benefits and into work is almost achieved
is based on counting jobs that are both sustained (lasting more
than 13 weeks) and those that are not sustained (lasting less
than 13 weeks). The latest figures show that up to the end of
almost a quarter (56,440) of those who have started work have
returned to claiming benefit within 13 weeks.
Although 237,040 young people have started work
there have actually been 318,390 jobs gained by young people.
This means young people are moving into a job, back onto the New
Deal and then into a job again which reinforces the point that
the New Deal is not creating secure employment. Of the 318,390
moves into jobs only 191,840 have lasted more than 13 weeks. Therefore,
less then two out of every five of all moves from the New Deal
into jobs have not resulted in a sustained move off benefit.
Moreover, the Labour Force Survey
shows that in the three years Spring 1997 to Spring 2000 employment
amongst 18-24 year olds rose by only 1.5 per cent or 50,000.
Some of the rise in this age group must be accounted
for by the growth in part-time working by young people who are
at school or are students. Indeed, there are now 93,000 more students
or school children working part-time than there were when the
government came to office. Given that most students or school-children
will be under 25, and given that 16 and 17 year olds in employment
fell by 24,000 over this period, it could be argued that there
may actually be fewer 18-24 year olds in full-time employment
than there were when the government took up office. There needs
to be closer examination of the impact on the New Deal on employment
opportunities for 18-24 year olds.
It must be questioned whether a move into any
old job is of benefit to young people. A constant moving in and
out of employment means young people will quickly become disillusioned
with the programme and view it as a "revolving door"
rather than an opportunity to secure a job. Arguably, constantly
moving in and out of short-term employment will also demoralise
and reduce the confidence of young people as they question their
ability to find secure employment.
The emphasis on meeting job targets without
questioning the quality or sustainability of employment could
in fact create an adverse impact as is highlighted by the recent
experience of the CAB.
Approximately 30 young people have been placed
with CAB. For many this has been a very positive experience with
a positive outcome in terms of both jobs and self-esteem. For
example, two young people, following their New Deal placement
with the CAB, secured full-time permanent employment as advice
workers with local authorities whilst other young people have
moved into higher education. One of the young people in response
to a question about whether the experience of the CAB placement
was worthwhile commented "yesgood workplace, position
had actual prospects of a job at the endwhich I got".
For those still on the New Deal with the CAB
there was also positive feedback about the quality of the placement
and the likelihood of future employment as the following comments
"It's the first time I love my job and really
want to carry on in this branch if I can. For the first time in
my life I know what I want to do. I believe New Deal is good in
this way as it opens doors to jobs you may not have done or not
thought about . . . I will come out from my New Deal option hopeful
in my jobsearch."
"I have changed so much, I really believe
I can get a good job now, I am so much more confident."
However, the CAB is concerned that the increased
pressure put on young people to find a job during their placement
with CAB could reverse much of this positive experience. Six months
into their placement with the CAB young people are sent on jobsearch
training and encouraged to find a job. The CAB was initially concerned
about this as it would mean that young people were being encouraged
not to complete their placement. However, the situation has notably
deteriorated in that this now happens after only three months
into the placement. As a result, from an early stage much more
pressure is put on young people to find a job. Moreover, the CAB
has been told by the local partnership that it does not have a
good record in terms of job outcomes and that therefore some aspects
of their funding may become related to achieving better job outcomes.
Rather than helping young people find secure
employment, this emphasis on taking a job in the middle of a placement
and the introduction of job related targets may have a negative
impact for three main reasons outlined below:
The CAB has pointed out that to become
fully trained and gain enough experience to compete for jobs in
the advice sector it is imperative that young people spend at
least 12 months with the CAB. Therefore if young people are
put under pressure to find a job prior to the completion of their
placement it means that they will be taking jobs below their full
potential. Moreover, the type of jobs that young people will
gain, without completing a placement and achieving a qualification,
will be more likely to be short-term jobs. Young people themselves
emphasised that it was more time with their placement and more
training that would help them find "good" employment.
In response to a question about how their experience of the New
Deal could be improved upon, one young person commented "more
training would be useful so that it would help to find future
work and more time to gain experience".
CAB training is highly regarded and
if completed would certainly add to a young person's skills and
help in the process of finding work. However, if young people
are not given the opportunity to complete their placement then
it will become increasingly difficult to motivate them to undertake
the training in the first place.
The linking of funding to job outcomes
could have a detrimental impact on the most disadvantaged groups.
If New Deal providers are put under pressure to get young people
into jobs as soon as possible then they will only take on young
people whom they expect to be successful, ie they will become
selective as to whom they take on. The different outcomes
form the New Deal for young ethnic minority people in comparison
with white people has been recognised as one of the main weaknesses
of the programme. The linking of any aspect of funding to job
related targets will only exacerbate and reinforce the discrimination
that already exists rather than overcome it. Moreover, the CAB
saw their role as helping people become "job ready".
They are prepared to put a lot of time and effort into young people
who perhaps are more vulnerable or disadvantaged. If they were
to become selective about who undertook CAB training then this
would go against the original aims of the New Deal.
A major concern raised by the CAB has related
to the advice they were given by the lead member of their local
partnership when they sought advice on questions of employment
practice as the following three examples show:
Sickness: The CAB was
advised in relation to sick pay and leave that "an individual
is entitled to a maximum of 10 days sickness absence, after which
time they should be terminated and advised to apply for sickness
benefit". The CAB pointed out that proper disciplinary and
grievance procedures have to be followed before employment can
be terminated. In addition even if it was judged fair to dismiss
someone then notice would have to be paid.
Maternity: There was some
confusion when the CAB asked for advice on the position of a young
woman who was pregnant and had handed in a sick note for three
months. It was suggested to the CAB that the young woman had no
rights and could be dismissed as she could not be paid for that
length of sickness absence. Again the CAB had to point that dismissing
a woman because of her pregnancy was automatically unfair dismissal.
Holidays: The CAB has
also been informed that "employees/participants are allowed
a minimum of two weeks and a maximum of six weeks annual leave
during a 12 month period. All employees/participants can take
up to a maximum of two weeks in the first six months". In
the firs instance an employer who provided only two weeks' paid
holiday would be breaking the Working Time Regulations and secondly,
an employer cannot stipulate that holiday has to be accrued.
The CAB had been given advice which conflicts
with good employment practice and also with statutory rights.
If acted upon this advice could have left them open to claims
of unfair dismissal or to being taken to an Employment Tribunal
in relation to other statutory rights. Given the service the
CAB provides they were able to recognise this and raise it with
the local partnership. However, it can only be assumed that other
employers would have followed the wrong advice.
The crux of the problem is the status given
to young people on the New Deal. Are they to be regarded as simply
trainees/participants or employees? The New Deal provider clearly
sees them as employees as they are given a contract when they
start their placement. If New Deal participants are employees
then they must be covered by existing employment legislation.
The uncertainty over the status of New Deal
participants also impacts on the young people who feel they have
to comply both with the practices of the employer and the additional
requirements placed by the Employment Service and the New Deal
programme. One New Dealer commented "I feel caught in the
middle as I am neither with the employer nor with the Employment
This is an area where it is imperative that
national rather than local guidance is provided. It surely must
have been anticipated that some young people on the New Deal would
become pregnant and there should be appropriate and fair procedures
for New Deal providers to follow in such situations. At the moment
the arbitrary way in which decisions are made, dealing with each
individual case as it arises at a local level means that some
young people could be "thrown off" their placement.
the Unit recommended a closer and more regular monitoring of New
Deal placements for both general quality and in particular the
quality of the training provided. One story from a young person
reinforces the need for this. Prior to being placed with the CAB,
one young woman was placed with a private sector employer as a
Personal Assistant. Not only was she working in an office with
no equipment but after a short while the manager stopped turning
up, leaving her with the responsibility of opening and closing
the office every day. In addition, she did not get paid for three
weeks and her benefit was never backdated. It was only as a result
of her persistent enquiries that she found out that the employer
was actually in hospital. Throughout her placement she raised
these concerns with her Personal Adviser but they were never followed
up and the placement was never investigated.
This is in stark contrast to the experience
of the CAB which has felt at times that it has been over monitored.
The CAB is a nationally recognised and respected organisation
with proper systems and procedures already in place for managing
staff and volunteers. Moreover, the local partnership recognises
and acknowledges that the CAB is a good employer. In spite of
this bureaucratic burdens have been placed on them which in effect
have hampered their ability to deliver the New Deal. There are
two main areas where the CAB has faced particular problems, namely
paperwork and training.
As was mentioned earlier the Cab placements
are not solely funded by the New Deal. Whilst additional funding
has made it possible to make the voluntary sector option more
attractive in terms of duration and pay it is also the case that
the additional funding has placed onerous requirements on the
New Deal providers in the form of paperwork as the following examples
1. The CAB has been asked to complete more
than one time sheet for each New Deal placement. They have been
told this is necessary for auditing by the European funders and
the Employment Regeneration Partnership;
2. The CAB is required to make a monthly claim
to the lead partner of the local partnership. Not only is this
a very time consuming process, but there is no flexibility as
to when the claim is made. In one instance the claim was made
a day early because of the anticipated absence of the manager
on the normal day of the claim. This caused enormous problems;
3. The CAB managers are required to fill
out different review forms for New Dealers. Although CAB managers
complete staff review forms for all employees as well as the New
Deal placements, these are not accepted and additional forms have
to be completed.
The end result is that many CAB managers have
said they are unwilling to continue with the New Deal because
of the over burdensome paperwork requirements. Although this is
not a direct result of the New Deal programme itself and appears
to be caused by the additional funding that this particular local
partnership has secured, it is still an issue which should concern
the government as it could mean that good placements are lost.
Initially, it was suggested that all young people
on New Deal placements with the CAB should undertake an NVQ in
advice work. The CAB argued that it would be of greater benefit
to the young people for them to undergo CAB training as this was
more highly regarded than the NVQ and would therefore be of greater
value to them in the long run when looking for a job. After much
discussion the Employment Service in Sheffield accepted the CAB
qualification. Following that the local partnership also accepted
that CAB placements should undertake the CAB training rather than
an NVQ in advice work. However, the CAB has faced persistent problems
in being properly and fully refunded for the training they have
provided. The CAB feels that the cost of administering NVQs would
never have been questioned.
In addition the jobsearch training which was
initially delivered by the CAB is now delivered via the local
partnership. The CAB has concerns about the quality of this training.
For example, advice jobs always require a completed application
form rather than a CV for equal opportunities reasons, yet the
jobsearch training still focuses on CVs. In addition the young
people did not rate very highly the quality of the jobsearch training.
The paperwork demands placed on the CAB and
the question mark over their training has given the CAB the view
that they are not valued by the local partnership. The CAB notes
that they are members of NACAB and quality audited by Community
Legal Services and therefore raise the question as to why the
procedures they already have in place for managing staff cannot
on their own be accepted without the imposition of additional
requirements from the local partnership.
In addition the CAB feels that there is still
a stigma attached to the voluntary sector option which is particularly
dependent on the New Deal Personal Adviser. Where an adviser has
known of the CAB and the quality of their training they have had
a number of good referrals. Problems have arisen when the adviser
has just pushed somebody into this option as a last resort. This
is reinforced by the comments from young people who said that
people in general don't want to go on the voluntary sector option.
Although the same person pointed out that if she had known about
the CAB option earlier she certainly would have taken it up but
instead she was encouraged to find a job.
In spite of the difficulties they have experienced,
the CAB concluded that it was still worthwhile continuing with
the programme. For the CAB this was because of the satisfaction
of seeing some young people, who had little in the way of skills
and qualifications, leave the placement with skills and work experience
that have helped them either secure a job or move into higher
education. In addition, the CAB feels that all of the young people
have left their placement with greater confidence and self respect
which in itself has made the programme worthwhile.
Whilst it is the case that many of the problems
the CAB has experienced have arisen as a result of the unique
local delivery arrangements it is important that the government
is made aware of these local problems. Whilst the local delivery
of the New Deal programme has been advantageous in that it has
allowed local partners to secure additional funding and offer
enhanced options it is also the case that local delivery has brought
with it its own set of problems. Of particular concern is that
decisions about issues such as employment practices have been
made at a local level. It is essential that national guidance
is given to all New Deal providers on such matters and that such
guidance shall satisfy both statutory requirements and accepted
good practice. Therefore there would be national minimum standards
that all local providers would have to comply with.
Any labour market programme which aims to increase
and improve the participation of young people in the labour market
is welcome. However, the emphasis on job outcomes could actually
have the opposite impact. Simply pushing young people into any
old job is not a long-term solution to the problem of youth unemployment.
It is right that there is currently much concern about the sustainability
of the employment that young people have entered. Questions also
have to be raised about the quality of employment that young people
are finding as a result of the New Deal. We urge the government
to consider monitoring the quality of jobs as well as the overall
number of jobs young people are gaining.
Greater Manchester Low Pay Unit
23 C Faichnie (1999) Rhetoric and Reality: The
Impact of the New Deal on Young People, Greater Manchester
Low Pay Unit. Back
Statistical First Release on The New Deal released by the Department
for Education and Employment on 28 September 2000. Back
Labour Force Survey Quarterly Supplement No 10, August 2000. Back
C Faichnie (1999) ibid. Back