THE GOVERNMENT'S EMPLOYMENT STRATEGY
III. Regional Features and Variations
26. Within the generally acceptable national economic
situation and encouraging employment statistics there are some
quite wide regional variations. This is particularly the case
in areas with a historically high proportion of employment in
industries that have been in decline, such as manufacturing. As
Mr Andy Westwood of the Work Foundation told the Committee:
"If we really want to crack full employment
now then we have to do it via a more regional route. ... 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, ...
and also to admit that in essentially deprived areas...there is
a problem and there needs to be a hell of a lot more done in particular
parts of the country."
Mr Nathan of the Work Foundation agreed "that
a lot more needs to be done at regional level".
Mr Westwood drew attention to the fact 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."
27. There has been a tendency for the Government
to downplay the regional variations. Mr Webster of Glasgow City
Council when asked for potential solutions to the regional differences
"The most helpful single thing that the
UK Government... could do would be to stop saying that there are
not any important local jobs gaps and start saying that they expect
all levels of government to promote maximum employment growth
in the areas which have the most difficult labour markets."
Mr Reeves, Chairman of Tomorrow's People, felt that
the Government did not have sufficient flexibility at local level:
"They are too tightly constrained. There
is not enough flexibility. It is almost inherent, when we are
dealing with Government money. It is almost inherent in the process
that nobody trusts anybody."
Mr Charlesworth, Managing Director of the Shaw Trust, agreed.
28. Another worrying aspect of the local variations
is the effect on local communities when a large employer closes
or is forced to make large numbers of workers redundant. In order
to establish how well the Government's strategy had coped with
such a sudden surge of unemployment we took oral evidence from
the Trades Union Congress, the Transport and General Workers Union,
the East of England Development Agency (EEDA) and the Luton Vauxhall
Partnership, concentrating on the measures taken following the
announcement of the closure of the Vauxhall Luton Car plant, resulting
in the loss of some 3,000 jobs in the Luton area. There was general
acceptance that the arrangements which had been made were good.
The Luton Vauxhall Partnership had been set up with four main
"to look at re-training and re-skilling
the Vauxhall workers. Second, to look at the effect on the supply
chain and local businesses. The third aim was to create new job
opportunities to replace those lost at Vauxhall in the supply
chain. The fourth was to get external funding to do it."
29. There had been some difficulty in accessing the
necessary funds for the last of those aims and the Partnership
had encountered one major problem as described by Mr Hart:
"in terms of rapid response...we got into
a Catch-22 situation at Vauxhall. Vauxhall did not want to issue
compulsory redundancy notices, final notices. We had agreed at
European level and with the company that they were going to do
everything possible to avoid compulsory redundancies; whether
by redundancy terms, movement to a plant next door or volunteers,
they wanted to avoid any person being made compulsorily redundant,
so they did not want to issue compulsory redundancy notices....
That meant that the monies could not be triggered because that
required a redundancy notice. So Vauxhall was doing the good thing
and this was causing problems in getting a lot of the things off
the ground. That standoff lasted for some time and it really does
seem absolutely daft that that happened. If there is one thing
you ought to have a good look at, it is whether there are ways
of short-circuiting that. A factory was closing, there was no
two ways about it, it was going to close and it had been announced.
That apparently was not good enough to trigger the money from
the Rapid Response Service."
30. We agree that similar situations should be avoided
in the future. We would expect the Government to have appropriate
policies to deal with large-scale redundancies such as those experienced
in the steel and car industries. In particular, the current "Catch-22"
situation which means that the full range of Government assistance
can only be given once redundancy notices have been issued, should
be urgently reviewed.
31. Looking at the wider picture of local and regional
differences, the Minister agreed that:
"The core problem relates to the employment
base of the regions and in particular with the substantial fallout
from employment in the more traditional heavy industries, mining,
ship building, steel, where communities have been very reliant
on a single large employer and that employer just is not employing
the numbers they used to. That has had a dramatic effect on local
communities and often accounts for the differences in employment
levels within regions as well as between regions."
Each region had been asked to produce their own employment
and skills framework to inform policymakers. The Minister believed
that "the Great Britain policies which the Department pursues
are sufficiently flexible to take into account local situations".
32. We welcome the acceptance by Government that
within the generally positive employment situation, there are
areas which are doing less well. We recommend that the employment
and skills frameworks produced by the LSC and the RDA should be
used to anticipate the skills and support required in these areas,
and allow greater funds for Jobcentre Plus to go to those areas
likely to experience, or experiencing, greater problems.
33. Another symptom of local differences is the situation
which applies in some major cities such as London where there
is a rapidly growing population, but also high levels of non-employment
at the same time as a tight labour market with skills shortages
and bottlenecks acting as a drag on the local economy. Mr Brown
drew attention to the improvements likely to result from the roll-out
of Jobcentre Plus, but accepted that much of the outreach work
was new for the Government and agreed that the Department would
learn lessons which might well have wider impact.
We drew the attention of the Minister to the poor take-up in London
of the Working Families Tax Credit and he agreed to look at the
"I have to confess that the take-up point
in London is new to me and I will have a look at that myself.
It may need something simple like a take-up campaign or making
sure it is properly explained if there is an issue there with
lone parents, which is a possible explanation, then I will make
sure we have a hard look at that as well."
34. We welcome the Government's commitment to
investigate the question of poor take-up in London of the Working
Families Tax Credit. As the new tax credit arrangements come into
effect, we recommend that detailed monitoring of take-up in London
continues, until this regional variation is fully explained and
18 Q. 36. Back
Q. 36. Back
Q. 32. Back
Q. 71. Back
Q. 142. Back
Q. 143. Back
Q. 173. Back
Q. 315. Back
Q. 315. Back
Q. 318. Back
Q. 321. Back