Memorandum from Mr Alan Simpson, MP
Nottingham's Welfare to Wages Inter Agency Monitoring
Group was formed in April 1998 as a response to the Government's
request that New Deal should be run in partnership with other
organisations. The group provides a monitoring role of the New
Deal from the perspective of the various organisations that its
members come from, and is a valuable source of feedback to the
I have chaired the group since its inception.
The group includes representatives from the CAB, Race Equality
Council, Welfare Rights advice agencies, the Employment Service,
local councillors, the Benefits Agency, the Local Authority Housing
Benefit Office, Colleges and Training agencies and the University
of Nottingham. It is this diversity of representation and expertise
that makes the group unique. The main aim of the group has been
to identify and offer solutions to overcome the barriers to work
faced by people on New Deal. In doing this, it has also identified
areas in which existing legislation runs contrary to the key objectives
of New Deal.
It is requested that the resulting evidence
from this submission be considered as evidence for the inquiry
New Deal: An Evaluation. The Group has met on a bi-monthly basis
since April 1998, although in the main the feedback presented
here is in response to the Select Committee's Eighth Report
of Session 1999-00, New Deal for Young People: Two Years On
and the current call for evidence. Additional data is from focus
group and individual interviews with New Deal clients, advisers,
employers, Employment Service personnel and Ministers, collected
over the past two years and currently being written as a doctoral
thesis by one member of the group.
This paper limits its contribution to two
key areas of inquiry addressed by the call for evidence:
how successful has the New Deal for
Young People been in moving clients into sustainable employment;
what have been the key factors influencing
its successes and failures.
The Government defines sustainable employment
as jobs that last for more than 13 weeks. As was noted in the
Eighth Report, approximately 75 per cent of people who have entered
employment through NDYP have had at least one job that has lasted
13 weeks or moreleaving 25 per cent who have not obtained
a sustained job. Nottingham can either be a success or a failure,
according to what you measure. Only 40 per cent of New Dealers
make it into jobs, but 75 per cent of those are still in employment
after 13 weeks (and 62 per cent after 26 weeks). We may simply
need a more sophisticated look at core Performance measures to
assess long-term and short-term objectives.
Where there have been problems with moving people
into sustainable jobs, it is important to recognise that this
is inextricably linked with the key factors that influence barriers
to success for New Deal. These are set out below, with recommendations.
Following that, a list of factors that influence the success of
New Deal is given.
1. BARRIERS TO
Pressure on Personal Advisers to meet targets
The role of the Personal Adviser (PA) is recognised
as key to the success of NDYPsetting it apart from previous
schemes. However, high caseloads and Employment Service targets
place unreasonable demands on PA's. This impacts in two main ways:
job outcome targets mean that PA's
are not encouraged to take a long-term view of a person's needs,
if the emphasis is on placing them in a job. In some cases this
means that clients are not referred to an option that may benefit
them more in the long run. For example, the Minister told the
Select Committee on 17 May 2000 that the FTET option should not
become "an excuse for not getting a job", and the Committee
noted that the introduction of the Core Performance indicators
in August 1998 re-emphasised the need to focus on job outcomes
at the expense of clients gaining qualifications. Whilst the group
fully acknowledges that the New Deal should be about employment,
the obsession with moving people into jobs as soon as possible
does not always fit in with the needs of the individualor,
it was notedthe economy.
High caseloads and targets lead to
de-motivation and stress among PA's;
The enthusiasm of PA's that is so
crucial to the success of New Deal is not fosteredtoo much
is expected of them with little flexibility. This has resulted
in "informal" coping strategies evolving (such as trying
to fit clients into existing provision/spending less time with
them), and has the effect of increasing the likelihood of client
dropout. This, of course, has the "Catch 22" effect
of ultimately increasing caseloads further as people churn around
againoften with more problems and harder to help the next
There should be a return to the client-centred
approach envisaged in the original New Deal design. Targets should
emphasise sustainability and other long-term client needs.
The design of the New Deal Personal Adviser
job should be reviewed. This should include:
A review of caseload sizesthese
should be kept to a minimum and, recognising the additional work
undertaken by PA's, incorporate clients on Follow-Through and
A support system, recognising the
stresses associated with the New Deal role, should be established.
In particular, it must be recognised that the PA role often becomes
a counselling role. Advisers need time, training and support mechanisms
to fulfil this.
Pay and grading structures for PA's
need to be reviewed.
While targets for reduction in turnover
are welcomed, the starting point for this should be a study into
reasons for the turnover.
2. BEFORE AND
Despite the Chancellor's clear message that
there is "no Fifth Option", there could be a positive
Fifth Option, in the form of intensive help for a longer period
for those who are harder to helpa "Pre-Option Option".
Evidence shows that there is a hard core of clients who keep coming
around. In terms of using resources well, it would be better to
deal with the problems they face head on, and not use the "pistachio
principle"chucking the ones that you can't open back
into the bag. For a significant number of young people a jobalthough
the goalis often a long way away. In terms of the "success"
of New Deal, we need to ask how we are measuring success.
The idea that getting a jobany jobas
preferable to receiving benefit prevails. This argument, however,
is contested strongly by many. For example, the view taken by
the Council of Churches of Britain and Ireland (CCBI) argues that
the issue that now arises is what kind of work, on what conditions
this should be. In previous generations it was assumed that this
meant full-time work at a wage that would support a family, and
asks "how do we now relate this to a temporary part-time
job at £2 an hour
or less selling useless products over the telephone"
(CCBI, 1997, p 44). The report goes on to ask whether the experience
of insecure, part-time work at low pay is so much better than
the experience of unemployment with much the same income as social
security, and argues that many of the jobs open to the unemployed
may not give them much sense of real achievement.
So which is more importantthe dignity
of work (any work), with the value of a job depending on the experience
it gives and the opportunities it may open up in the future, the
theoretical opportunity to work, or a situation where people actually
do have work to do, appropriate to their abilities? It must be
recognised that when we are measuring success we need to understand
that for some of the pistachios we may need to shift our perception
of "success". It will be achieved in incremental stepsgetting
up in the morning, turning up to something on timebut incremental
steps can take you a long way when you know where you're going.
An enhanced Gateway or a Pre-option Option,
with the welfare of the young person handed over to an intermediary
organisation is recommended. This would go a long way to ensuring
that people had some basic skills before they started New Deal.
Ideally, this would also include some kind of basic information
about where benefits come from, and how they are paid for, in
order to begin to change attitudes towards rights and responsibilities.
There is nothing yet that exists as a programme
that could deliver this. It would need to be something very imaginativenot
a school-type experience (which may have already failed them),
and not a private sector company coming in to sit them in a room
and show them a video of "Dangerous Minds", but intensive
help as a separate programme, not delivered by already overworked
PA's. A pre-option Option, delivered by intermediaries who could
engage those with particular problems, would be a better use of
some of the money currently spent on advertising and publicity
The Select Committee report indicates that changes
are being considered to Follow Through with an emphasis on a fresh
approach. This is welcomed.
There should be an intensive mandatory course
similar to the two week Gateway to Work course in Follow Through.
In exceptional circumstances there should be
flexibility for clients to remain on Options longer (in particular
the VS/ETF Option).
Clients on Follow Through should be able to
access the Subsidised Employment Option. This will support entry
into employment and maximise the skills acquired during their
participation in New Deal while they are still motivated. Losing
them at this point will undo a lot of progress.
Greater involvement of PA's in Follow-Through,
which should be recognised and reflected in New Deal caseload
sizes and workloads. Current analysis of New Deal caseload sizes
concentrates on "live" Gateway caseloads, ignoring the
additional work that PA's have with clients on the Options and
Follow Through should be re-launched with additional
provision, raising the status and profile.
TRAINING (FTET) OPTION
With specific regard to the FTET option, this
should be about learningwith the enhanced possibility of
a job at the other end. Andrew Smith, when he was Minister for
Employment, stated: "New Deal is not a job creation schemeit's
about giving people opportunities and helping them to become more
Current targets and emphasis on finding employment means that
this, as an aim, is not always consistent with reality. Under
New Deal, continuation in learning is not regarded as a positive
outcome, and yet it may be very positive for those returning to
education because it supports social inclusion and addresses the
need for higher-level skills (IT experts, teachers etc). Continuing
in further learning (if agreed with the Personal Adviser) should
be recognised as a positive outcome for New Deal performance measures
and Employment Service purposes. Moreover, it is compatible with
colleges' agendas and Government commitment to Lifelong Learning,
rather than two areas of policy being at odds with each other.
The emphasis on Vocational Education within
the FTET fails to recognise the skills and needs associated with
"adult education". Research undertaken into barriers
to adult learning is also relevant to New Deal participantshence
FTET has to contend with issues such as high drop out rates. The
structure, theory and practice of the FTET Option should be examined
with a view to learning from good practice in adult education.
The FTET option is structured around College
priorities and Jobseekers Allowance (JSA) requirements. It does
not necessarily benefit New Dealers. The majority of courses that
New Dealers are placed on are the 16-hour "part time"
courses designed for JSA claimants. New Dealers must have 30 hours
of study. This usually means they must take "add-ons"and
these are often unrelated to their main course (often known as
the "bread making" or "library skills" options).
Absenteeism is much higher in the add-ons than in the main courses.
Generally, more need to be done to look at ways
of "mixing and matching" options. For example, currently
if someone drops out of an FTET course they cannot transfer from
one option to anotherthey have to wait and start all over
again. Given that clients signing up to the FTET option make a
big commitmentoften with no real way of testing out what
they wantit is clear that there will be some "leakage"
and drop out. Getting on to another option more quickly would
be far more positive than having to churn around again.
Continuing in further learning (if agreed with
the Personal Adviser) should be recognised as a positive outcome
for New Deal performance measures and Employment Service purposes.
The structure, theory and practice of the FTET
Option should be examined with a view to learning from good practice
in adult education.
Extend PA's remits to contract for training
packages appropriate to individuals, rather than convenient to
Re-examine the 30-hour rule. Make it an entitlement,
not an obligation. Tie this to the personal package that the Adviser
and participant contract for in order to cut disillusionment and
drop out rates.
Job specific training through the FTET Option
should also be delivered by approved Employers. This would provide
clients with tangible skills and experience recognised by local
employers as well as giving clients a taste of working in an area.
This would enhance the possibility of matching New Deal participants
with the employer delivering the training. This may be able to
be progressed through the proposed "Approved Supplier"
lists for future contracted provision.
The best way to show the problems with this
is to present the following case studies:
Jim is a local roofer offering to
take two trainees. He is happy to pay for them to undertake extensive
health and safety and skills based training. No relevant NVQ level
2 training exists, but as this is a requirement of the option
Jim was forced to withdraw his offer;
a local firm offered to send trainees
to Brussels for specialist IT training that the company required.
This was not classed as NVQ2 (though well beyond it), and so did
Sarah is a graduate, but on New Deal
with no direct work experience. To qualify for the option she
was still required to take NVQ level 2.
As well as being inappropriate or counter productive,
the current bureaucracy around the issue of NVQ level 2 is also
costly. In Nottingham, any course for New Dealers is charged at
£750 per person, even if it amounts to a £60 computer
course. The in-house alternative to the NVQ is a skills-mapping
exercise that is currently very costly (£1,000+).
Extend the remit of Personal Advisers to allow
appropriate training packages to be negotiated with/on behalf
Where such training is unnecessary or irrelevant,
Advisers should be able to recommend a work-experience only option.
5. FROM BENEFITS
The rigidity and bureaucracy of the benefits
system is the biggest single obstacle to making New Deal work.
Without the introduction of new entitlements or flexibilities,
the recent extension of means-tested benefits will make this a
greater threat to New Deal. It is hoped that changes to the Employment
Service will also mean that some of these problems are alleviated.
The experience of those on the Monitoring Group suggests that
there is not one area of the Benefits system where problems have
not arisen for New Dealers. The specific details are too numerous
to include here, but can be set out if the Committee requests.
An example is given below in the form of a case study. The Nottingham
Welfare Rights Service sees cases such as Michael's day in, day
out, and it is not difficult to see why many people do not persevere
Michael is 18 and on New Deal. He has not worked
since leaving school, but was offered a job and sent in his ES40
card to sign off. Four weeks later he received a letter from the
City Council to say he was in arrears with his Council Tax, and
his landlord issued him with a red letter for non-payment of rent.
He took time off from his new job to see his New Deal Personal
Adviser, who told him he is no longer eligible for extended Housing
Benefit because he didn't claim within eight days. He went to
the Housing Benefit Office for a claim for, where he queued for
two hours. His landlord gave him notice that unless he paid his
rent arrears he would be evicted. Michael needed five weeks' pay
slips, and Housing Benefit could not be backdated because of his
late claim. Michael was paid monthly, and was still waiting for
his first wage slip. Michael's employer gave him a verbal warning
for taking time off.
The Housing Benefit Office wrote to him asking
to arrange another meeting. Michael tried to do this to fall on
his lunch break, but was delayed at the HB office and was late
back to work. His employer was angry, and said Michael could not
have any more time off. Michael didn't go back to work the next
day. He felt it was easier to be on benefit, he didn't want to
lose his flat, and would rather have left than be sacked.
In Michael's case (but as mentioned above there
are so many permutations to the benefits barrier to work), the
changes to the system that would help him are:
Pay Housing Benefit Extended Payment
as a right on leaving to go to employment, or at the least extend
the qualifying period to 14 days;
Set up a call centre to deal with
benefit transition problems on behalf of the client;
Follow up visits from Personal Advisers
would mean that people in Michael's situation would not feel they'd
been left to fend for themselvesoften after an extensive
period on benefits people need help adjusting to sorting out bills
. . .
Key factors influencing the success of New Deal
The Personal Adviser
Despite the paradox here, the PA has been a
really important success for New Deal. Feedback from new Deal
participants consistently identifies the PA as a marked change
from schemes experienced before. We should heed the warnings that
are coming from PA's who are struggling to meet the Employment
Financial Support and Continuity
The Job Seekers Grant has been a valuable asset
to the unemployed, with the flexibility of the grant being key.
The PA has been able to use the fund to suit the individual's
need for equipment, tools, work clothes, travel expenses etc.
The Job Finders Grant has been an important
incentive to finding work, and staying in it. It minimises financial
difficulties in the initial period of employment, during which
time the New Dealer is usually waiting for their first pay packet.
Extended Housing Benefit has been helpful, but
the loophole of the short claim time must be addressed.
the identification of basic skills
gaps in participants has been greatly improved. The OTR Basic
Skills assessment has been essential in identifying literacy and
numeracy problems early on;
in terms of retention, the Subsidised
Employment Option has been more successful in terms of providing
support to the participant than the unsubsidised option;
in Nottingham, the City and County
Council's Environmental Task Force (ETF) options have been outstanding,
focusing on regeneration and addressing the needs of those with
very few skills.
Mr Alan Simpson, MP
Member for Nottingham South
27 Written before the introduction of the National
Minimum Wage in the UK. Back
Unemployment and the Future of Work, Council of Churches
for Britain and Ireland, 1997, p 44. Back
Interview with E Hitchcock for thesis 09/98. Back