Select Committee on Work and Pensions Minutes of Evidence

Examination of Witnesses (Questions 32-39)




  32. Ladies and gentlemen, can I reconvene the Committee and welcome Max Nathan and Andy Westwood from The Work Foundation. Gentlemen, we are very grateful to you for appearing but also for submitting a fascinating memorandum which we have all had the opportunity to read. Perhaps, Andy, if you could maybe start the session. It would help us to understand the recent changes that the Work Foundation has experienced, the metamorphosis from the Industrial Society. Maybe you could start with a word about that and then a short opening statement and then there are some questions we would like to ask you, if we may.


  (Mr Westwood) As I am sure you have realised, the Industrial Society as was changed quite a lot over the last couple of months. At the end of last year effectively we split in two. I suppose one of the things we have been best known for over the last 30 years is training. In effect that has gone, it has been sold off as an entity to Capita and what has remained has become The Work Foundation and the model which we are trying to perpetuate is to retain the campaigning and the interest in working life in the UK with a particular interest on employment, employment levels but also productivity and performance and to be a much more research led body, to inform those campaigns rather than effectively to be a training body. That is the big difference and we felt it warranted a name change, which we know is not the most popular thing to do in the world, which is why we have kept it fairly simple, and we like to think The Work Foundation does what it says in the name rather than anything more elaborate. In common with that, and I think it was appropriate, on the night we launched we were lucky enough to have Gordon Brown to come and speak and whilst the world seemed to be very focused particularly on productivity and performance in the run up to the Budget, the Chancellor chose to speak about full employment and how he felt that was a key route to improving the UK's productivity as a whole, and that we should never lose sight of how the effect that achieving higher and more sustainable levels of employment can feed in to the overall performance on the economy. Obviously, myself and Max, we work very closely in these areas, and we are pleased to hear that. In a sense that brings us to where we are today and brings us to our particular analysis of what the problem is within the UK. Increasingly, as Government policies since 1997 have been a success across the piece, what has happened is that the greater problems experienced by particular people in particular parts of the country, particular parts of cities and towns have been exposed more and more as the people who are relatively easy to help have been helped into work via the effect of the current economic cycle. What has been exposed are the harder to help both in terms of individuals and in terms of particular locations within the country. Our submission was on one level trying to make people more aware of where those places are, what the kinds of problems are in those places and what is holding them back both as individuals and communities from taking part in the economic boom, if you can call it that, experienced by the rest of the country, and then also just some suggestion from our work around where we think it is worth intervening in those problems, both at an individual level but also crucially on a community and infrastructure level. In a nutshell that is where we are as an organisation, why we are here and what we have said. Is that a good enough start?

  33. Absolutely. Finishing the logistics and the changes you have been through, you used to be a membership funded organisation, the Industrial Society, do you now look to public sector Government for your core funding? Do you get any public support in the context of your current funding?
  (Mr Westwood) Yes. We are still a membership body and at the moment that is where most of our funds come from still. It is still a mixture of employers, both public and private sector and that is still a very strong element of where our income will come from.

  34. Nothing from central Government directly?
  (Mr Westwood) Not directly we get bits and bobs for bits of resources, bits of research, bits of policy work but I do not think it covers much.

  35. How big is the residual of The Work Foundation if you have hived off training?
  (Mr Westwood) It is about 80 or 90 people.

  Ms Buck

  36. In the memorandum you talk about there being a political choice in not talking too much about or addressing regional variations in employment, it is more attractive to talk about the national picture. I would like you to explain why you come to that conclusion, partly I think because I would personally have thought—and I am very concerned about regional variation—that we do have a plethora of area based initiatives, we do have regional government on a slow burn, Scotland and Wales and so forth, so I am not sure quite why you have drawn that conclusion, can you just tell me why?
  (Mr Westwood) I think slow burn is the key. What we think is that if we really want to crack full employment now then we have to do via a more regional route. On one level I think that is quite obvious to policy makers, civil servants and politicians but on another level it does not sit as comfortably with the narrative that sits alongside which is that various national level interventions are working very well, we have the highest employment levels for 30 years, the highest number of jobs in the economy ever. I think it is slightly difficult to say on the one hand this is a remarkable success story, we would agree it is a remarkable success story but it is very hard to say that on one level, particularly around election time, and they come and go quite frequently, and also to admit that in essentially deprived areas that there is a problem and there needs to be a hell of a lot more done in particular parts of the country. I think there is a bit of a tension between admitting that, even though we know it, and the overall picture.
  (Mr Nathan) I think it is also fair to say that as time has passed there is this sort of growing awareness of the regional agenda and the importance of spreading economic activity and employment opportunity across the country. I think you are right to say that that is coming through more than it was but that tension is still there between talking up the big national success story of New Deal and admitting, in a sense, that a lot more needs to be done at regional level.

  37. I would like you to help us work through what I think are two very different strands of the same problem. Clearly we have a chronic problem in parts of the country, mostly in the north, where there is high unemployment and not many jobs, and where you have particular characteristics around the population out of work, with high levels of incapacity benefit—and that is a crude profile—and, quite separately, we have a chronic problem in London where there is massive unemployment, in Hackney, Tottenham and bits of my constituency, alongside a lot of jobs. So the regional variation is even more complicated. I wonder if you could help us address both of those and separately. Sticking for the moment with the high unemployment/low jobs agenda, in your memorandum you give the Glasgow example, that only 10 per cent of those out of work might hope to find a job. Just talk us through the greatest hits of the agenda to tackle that. What is the solution for dealing with that particular agenda?
  (Mr Westwood) I think there is one answer that fits both a little bit, which is about individual mobility, and there is another answer which is about: how do you increase the demand for labour in particular parts of the country? If I could start with the first, which is particularly pertinent, not just in London but in parts of the bigger regional cities where job growth is actually relatively high but it is usually in city centres or outlying areas. For instance, in Manchester or Leeds, where you have got growth right in the city centre, the kind of retail and service sector boom, and then you have got a plethora of sort of motorway corridor or airport-based areas and in between there is not very much. There is an issue about the mobility, in a practical but also in a psychological sense, of individuals who have typically worked in one particular industry with one particular set of skills for all their lives, or people from households where that is the norm, and I think there is an issue about actually saying to them, "Look, here is our analysis of where you might physically be able to travel to find work." So in Manchester you might be talking to somebody on an estate, that there is a vacancy in Trafford Park or a vacancy in the city centre, and some of those places are just so far off individual people's radar, either because they think, "No, that is not a job I could do"—which goes back to the previous evidence about an older male who is doing an unskilled manufacturing job thinking, "How could I work in All Bar One in the city centre of a particular city?" So part of that is, "The job does not fit me," and part of it is even more psychological than that, which is, "You are talking about a place I have never been to in my life you know, I have heard of it but I could not place it on a map and it may as well be on another planet." I think that is the kind of problem—the travel to work area analysis, which is still quite heavily leaned on in terms of connecting areas of vacancies to areas of unemployment—where it begins to fall down. I think that is a problem, say, in parts of London, where you have got very high pockets, very high ward level pockets, estate level pockets, which are obviously very close to booming labour markets. But you have to ask yourself the question: if you live one side of the arterial road opposite Canary Wharf, do you understand what Canary Wharf is about? Do you have the skill level or the interest or the knowledge of actually getting across that and finding something that you can actually do? Basically, I think that is true within areas that are close to places with high vacancies but it is also true of parts of the country where the actual job creation rates are not that good. So there is a problem that transfers over to areas where, even within travel to work areas (which I think we mentioned in the submission), there are still vacancies to travel to but the competition for those vacancies might be quite high and that might be a further factor for placing the hardest to help further from the labour market. In those particular areas, I think, there are broader issues to address, where we have to think about the infrastructure within a community. You are talking about things like child care, transport accessibility, reliability, the provision of services in local areas, and I think there are other stepping stones to kind of defeating that problem which are not explicitly government-aided job creation programmes but they are about facilitating the process by which services can be restored which will allow people to get into work and stay there.

  38. I have a huge amount of sympathy for that analysis, I think it is very good analysis, but having met people who regard Ladbroke Grove as something akin to the Great East African Rift Valley, I invite you to be a tiny bit more specific in solving the problem than just saying, "We need a 20-year urban regeneration programme." There have to be some hard, specific proposals that you could research that say, "How can we encourage greater psychological mobility in accessing different kinds of jobs; greater physical mobility in solving these problems?"
  (Mr Nathan) I think the elements of the mobility issue still need to be worked on. This is something we are researching right now. It is a combination of practical and psychological barriers to physical travel and access to jobs. What I would say is there are more established areas of this agenda—the stuff that Andy was talking about. I guess you could call it the cultural and social proximity to employment, which is something that has been fairly well trod over the last few years. I think, particularly within fairly vibrant labour markets like inner London, the key thing is to ensure the mobility of the individual and ensure reliable connections between the individual and the employer. What you find is a variety of barriers in place. There may be confidence issues based on generic skill issues on the part of individuals. Equally, employers may not know where to look or may have particular attitudes which could be construed as discriminatory towards people from particular places and people of particular backgrounds. An intermediary approach there, that takes fairly seriously employer needs and possibly takes some of the heavy lifting away from employers in terms of putting in some kind of HR function, which I think is particularly germane to small and medium-sized enterprises, is one which has worked fairly well in practice. That is something the Government is piloting and it is something that I think we would like to see a lot more of.

  39. One of the things you have not mentioned is ethnicity, because clearly that is a well proven issue. I know the Industrial Society did a very good piece of research on refugees in this context. I would like you, for the record, to say something about what your understanding is of those particular issues in the job market.
  (Mr Westwood) It is fairly common knowledge that ethnic minorities are the group that have done least well in the raft of welfare to work programmes that have been put in place since1997 and I think there is a great deal of concern about that. I think there are issues around skill levels, but harder and more effective ways of translating what skill levels exist rather than starting from scratch again. There are issues again about mobility. We are beginning to find evidence that, where people might have migrated huge distances from other parts of the world, actually the plane ride or whatever it is is almost incidental: they have gone from a very tightly knit local circle in parts of the sub-continent to a very tightly knit local area in East London, for instance. So there are still interventions to make to try to draw people out of that. There is a very clear agenda to try to do that on the demand-side as well, which is to combat what are still effectively discriminatory practices, which we need to keep in touch with.

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