Select Committee on Education and Employment Appendices to the Minutes of Evidence


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 deliverers.

  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; and

    —  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 more—leaving 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.


Pressure on Personal Advisers to meet targets

  The role of the Personal Adviser (PA) is recognised as key to the success of NDYP—setting 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 individual—or, it was noted—the 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 fostered—too 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 again—often with more problems and harder to help the next time round.


  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 sizes—these should be kept to a minimum and, recognising the additional work undertaken by PA's, incorporate clients on Follow-Through and in Options.

    —  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.


  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 help—a "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 job—although the goal—is 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 job—any job—as 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[27] or less selling useless products over the telephone"[28] (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 important—the 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 steps—getting up in the morning, turning up to something on time—but 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 imaginative—not 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 materials.


  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-Though.

  Follow Through should be re-launched with additional provision, raising the status and profile.


  With specific regard to the FTET option, this should be about learning—with 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 scheme—it's about giving people opportunities and helping them to become more employable".[29] 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 participants—hence 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 another—they have to wait and start all over again. Given that clients signing up to the FTET option make a big commitment—often with no real way of testing out what they want—it 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 the college.

  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 not qualify;

    —  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 of participants.

  Where such training is unnecessary or irrelevant, Advisers should be able to recommend a work-experience only option.


  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 with employment.

Case study

  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 themselves—often after an extensive period on benefits people need help adjusting to sorting out bills and commitments.


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 Service targets.

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

November 2000

27   Written before the introduction of the National Minimum Wage in the UK. Back

28   Unemployment and the Future of Work, Council of Churches for Britain and Ireland, 1997, p 44. Back

29   Interview with E Hitchcock for thesis 09/98. Back

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