Select Committee on Work and Pensions Minutes of Evidence

Examination of Witnesses (Questions 186 - 199)




  186. Good morning, ladies and gentlemen. The Committee is in the course of looking at the Government's employment strategy and we are joined this morning by a distinguished group of civil servants who are in the Department for Education and Skills (DfES), the Department of Trade and Industry (DTI) and the Department for Transport, Local Government and the Regions (DTLR). We have Mr Peter Lauener, who is the director of the Learning Delivery and Standards Group, DfES. We have Mr Mark Beatson, who is the director of employment market analysis and research in the Employment Relations Directorate, DTI. We have Mr Chris Riley, who is the chief economist, DTLR, and Mr Alan Riddell, who is the deputy director of the Neighbourhood Renewal Unit, DTLR. Gentlemen, you are all very welcome. Thank you very much for the written submissions you have made, which are very helpful to us. We are trying to understand this morning a little bit about how the various bits of central Government Departments fit together underneath the umbrella of the Government's overall employment strategy. I would like to look at each of the three Departments in turn briefly and then spend some time looking at how they fit together. I might start with the Department of Trade and Industry and ask Mark Beatson a couple of questions about the RDAs[1] and regional selective assistance. We would like to try and understand, first of all, with particular reference to the DTI, how applications for regional selective assistance meet national guidelines and to what extent those guidelines prioritise creation of employment in disadvantaged areas. Mark, could you say a little bit about that by way of introduction?

  (Mr Beatson) First of all, applications for regional selective assistance have to be within assisted areas. The geographical focus of the areas provides a first tier of assistance towards areas, particularly since the assisted areas map has employment as a key component in terms of how it is drawn up. Within applications for regional selective assistance, one of the criteria used is the number of jobs expected to be either created or safeguarded. That is not the only criterion taken into account. One also has to look at the sustainability of the jobs, the viability of the appraisal case and the bid for selective assistance. When cases are appraised, the expected cost per job is one of the factors taken into account. The average cost per job from regional selective assistance is about £4,700.

  187. When you try to coordinate the policy, to what extent are you targeting a reduction in unemployment, the so-called register effect? To what extent is the policy focused on trying to get people off the unemployed register?
  (Mr Beatson) If one is looking at similar schemes that involve safeguarding jobs, you are looking at the issue of employment of workers who are already in place. Essentially, the main criterion used is the quality of the application. The register effect is not appraised separately from the employment effect.

Mr Dismore

  188. Could I ask about the public service agreement which I understand is to generate more sustainable enterprise in disadvantaged communities. Are you achieving this and, if so, how are you measuring it?
  (Mr Beatson) The public service agreement (PSA) target is to generate more sustainable enterprise in the 20 per cent most disadvantaged local authority wards. Progress will be measured by promoting enterprise in these disadvantaged neighbourhoods and in practice by measuring the gap in business start-up rates between the 20 per cent most advantaged wards and the 20 per cent least advantaged wards. The initial target is to reduce that gap, which is currently 35 per cent, by a percentage point each year until 2005. That is five times the current trend. The measurement of that is going to be done by the statistics that we produce each year on VAT registrations.

  189. You will reduce the gap by 5 per cent over five years?
  (Mr Beatson) That is right, from 35 to 30 per cent.

  190. There is still quite a big gap at the end of it?
  (Mr Beatson) It is still a sizeable gap but it is a measurable improvement.

  191. If I was a long-term unemployed person and I thought I would like to set up a business, how would I go about accessing the Small Business Service? What would be the procedure?
  (Mr Beatson) There are various routes.

  192. How well is that known?
  (Mr Beatson) I am not aware if we have any evidence about awareness on that particular question. One approach is through small business links which exist in every area. They are meant to provide a source of assistance to firms in business already and also for people who are interested in setting up a small business.

  193. How do you get to know about business links if you are not in that network to start with?
  (Mr Beatson) That is a good question.

  194. There is a reason for asking that question. We have business link in my area and, talking to unemployed people, they have never heard of it. Part of the problem is getting to know about the Small Business Service network. I just do not think that the network is engaged with unemployed people. Your answer has confirmed that view. There are two roles for the Small Business Service. One is when a business is set up, taking people off the register; the other is helping people who are long-term unemployed think about raising their own horizons and thinking about what they can do to start their own business. I do not think you engage with them at all and you have probably just confirmed that.
  (Mr Beatson) In New Deal there is a personal adviser for people who are interested in starting a small business or becoming self-employed. In terms of how we relate to Jobcentre Plus at a local level, that would be one of the linkages.

  195. Have you any figures about how many people from these difficult, disadvantaged communities have been able to set up their own business through your service, business link, or through New Deal?
  (Mr Beatson) I have not got the figures with me.

  196. But they exist. Can we have those figures for those areas and comparatively with the average and the best performing wards as well?
  (Mr Beatson) We will get back to the Committee on that.[2]

  197. It would be useful to have it regionally too. Going on to Jobcentre Plus and New Deal, there are two aspects to this. One is helping people who are unemployed to find work with existing small businesses; the other is how to set up a small business. Can you deal with those two aspects?
  (Mr Beatson) It is not for me to comment on the operations of Jobcentre Plus. In terms of starting your own business, that would come mainly through the advice from Jobcentre Plus and from personal advisers. There are programmes which can be used to help particular groups to try and become self-employed.

  198. Do you think the personal advisers are plugged into business link?
  (Mr Beatson) There are mechanisms in place to provide for that.

  199. That is not what I asked you. That is a Civil Service answer and this is an MP's question.
  (Mr Beatson) I do not think it is for me to make a judgment on that point.

1   Regional Development Agencies. Back

2   Please refer to the supplementary memorandum submitted by the Department of Trade and Industry (ES 16), Ev 143. Back

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