Select Committee on Work and Pensions Minutes of Evidence

Supplementary memorandum submitted by the British Retail Consortium (ES 15A)

Employment Support Services (Q2, Mr Kirkwood)

  In addition to Ms Rosewell's answer, we would add that local delivery is not assisted by inconsistent policy application. This manifests itself in two ways. The proliferation of agencies and arms of Government with local remits, both within England (47 Learning & Skills Councils and eight Regional Development Agencies) and their Scottish, Welsh and Northern Irish non-equivalents works against a co-ordinated and consistent delivery of Government programmes. Larger retail companies (who have the most employees and whose growth creates the most new jobs) are dissuaded from engagement with such programmes, unless like Ambition Retail there is clear national impetus behind it.

  Furthermore, the subtle distinction between many of these government organisations confuses and ultimately devalues the overall economic goal. For example, jobcentres may have developed, and constantly seek to improve, their links with the retail sector because of its size, growth trend and employment opportunities, but local Workforce Development Plans tend to value manufacturing and IT skills as priority development areas above retail/business/management skills despite the latter's greater bottom line effect on the performance of UK plc.

  DFES Ministers' recent decision to establish Sector Skills Councils is a positive signal that the demand side (employers) must be played into this equation. The BRC is delighted that its proposal to establish a retail SSC was one of the first five approved. But as Skillsmart (the retail SSC) and the other four SSC's have already encountered, there is a huge emphasis on Government funding for supply side initiatives without equal support for the demand side. The BRC and Skillsmart would be delighted to work with the Committee in seeking ways to align the supply side Government programmes to employer needs.

Middle term growth of job opportunities (Q4, Mr Kirkwood)

  The retail sector continues to grow, although the pace of growth is slowing as the sector emerges from an unprecedented growth period. In terms of jobs the sector has grown by an average of 5 per cent a year over the last five years (an average of 100,000 new jobs a year). This is despite the burden of dealing with the implementation of many significant pieces of employment and business regulation over the same period. The speed and volume of new legislation, coupled with the one off implementation costs, have probably been as big a burden as the cumulative additional cost. There is no doubt that growth has been restricted, and the effects will be probably been more keenly seen in the medium term.

  The situation has been exacerbated by associated Regulatory Impact Assessments for many of these regulations, many of which have been woefully inadequate in their analysis of cost and impact.

  The BRC would, therefore, forecast that the service sector will continue to grow in comparison to manufacturing, but that the rate of growth will be subject to further government regulation. For example the forthcoming regulations in relation to pensions and the employment circumstances of agency workers will adversely affect employment patterns.

Job entry rate of welfare to work programmes (Q9, Mr Dismore)

  Welfare to work programmes are designed primarily for social rather than economic reasons or as a solution to employment needs. However they rely upon employment opportunities to succeed.

  In terms of investment by an employer they are a highly uneconomic means of recruitment. Many retail employers, for example, reported the costs of administering New Deal far outweighed the benefit. Employers will inevitably select better skilled, more literate and numerate recruits when there is a well-qualified labour market to select from. To that extent, welfare to work programmes are subject to the economic cycle.

Effect of Welfare to work programmes (Q10, Mr Dismore)

  Welfare to work programmes perform an essentially social function. It is more economically effective to channel resources towards assisting those out of work who are most appropriately skilled back into employment, than assisting those with least skills. But the political and social imperative of assisting the most needy in society outweighs the economic arguments. Therefore, the entirely laudable goals of welfare to work programmes are not primarily to have a major economic effect, nor do they. However, as Ms Rosewell remarks, at a micro level the effect is much more significant.

Attracting a workforce (Q12 /13, Mr Dismore)

  As Ms Rosewell points out, willingness is a key issue, but it is extremely difficult to instil willingness.

  Clearly employers and trade associations are responsible for improving the attractiveness of their own sectors. For retail this is a key area of activity that Skillsmart, (the new Sector Skills Council for retail) will be engaging.

  In our own case, we need to improve understanding of the variety of opportunities that are available and the career development prospects. In many entry-level retail jobs, hours can be anti-social and pay is comparatively low. But retailers are amongst the most flexible employers and the package and prospects for recruits with potential are very competitive.

  As employers we would like to see Government action to improve the standard and reputation of vocational qualifications. There is much to be gained by promoting a viable and credible alternative to academic qualifications. It is important that those who under-achieve under compulsory academic education do not leave school at 16 with a stigma that they have no talent or route for self-improvement. This would require intervention before an individual has completed compulsory education.

  Ultimately employers value quick learners who are reliable. There is perhaps a role for Government in shaping the expectations and understanding of what work is about for people that are about to take up employment for the first time.

Russell Hamblin-Boone

Head of Parliamentary Affairs

20 May 2002

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