Select Committee on Work and Pensions Third Report


Economic situation and Government strategy

    (a)  We support the Government's determination to continue its pursuit of active labour market policies, which will be continued even if the labour market cools, but consider that contingency plans should nevertheless be made in case of an unexpected severe economic recession. In particular, we suggest that plans for early implementation of additional Transitional Employment projects would be advisable, specifically in areas affected by lower growth (paragraph 25).

Regional features and variations

    (b)  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 (paragraph 30).

    (c)  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 (paragraph 32).

    (d)  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 eliminated (paragraph 34).

Contributions by other Government Departments and co-ordination of policy

    (e)  While accepting that there is no easy answer we would urge the Government to increase its efforts to simplify the system by reducing the number of schemes, simplifying conditions for qualification and devolving more discretion to front-line DWP staff and to recipients of funding (paragraph 41).

    (f)  We urge the Departments responsible to take account of the effect of transport on employment when considering their policies, and recommend that the DWP reviews its programmes to see whether individuals' transport needs are being adequately addressed (paragraph 45).

    (g)  We do not believe that the number of childcare places is an adequate measure of whether working parents can meet their needs for childcare. A working parent may require pre-school care for young children and care for older children before and after school and during school holidays - up to three or four places for one family. For children with special needs, there may not be adequate provision in schools. We recommend that the Government develops a new measure, related to working parents' needs, and reviews its policies and funding commitments to meet any gaps, drawing on the example of states such as Oregon and Washington that have switched funding from welfare payments to childcare support (paragraph 49).

    (h)  We are concerned that figures are not yet available for the target that every lone parent in the 20 most disadvantaged areas should have a childcare place. We recommend that this data should be collected and published within a year (paragraph 50).

    (i)  We recommend that childcare co-ordinators in Jobcentre Plus offices be given two roles. First, as co-ordinators of more active assistance to lone parents, designed to ensure that every lone parent undergoing work-related training or seeking employment succeeds in making suitable and reliable childcare arrangements for their children. Second, in providing strategic advice to the Early Years Partnerships on the specific childcare needs of lone parents on benefit in the locality who want to work. Childcare is an issue the Committee may well return to consider in detail in the very near future (paragraph 51).

Re-design, streamlining and co-ordination of New Deal initiatives

    (j)  We recommend that the emphasis of the New Deal should shift from the younger JSA claimant population to older JSA recipients, those facing acute barriers to work, those on other benefits, and those who are economically inactive (paragraph 56).

    (k)  We believe that the Government should prioritise its support for more disadvantaged jobseekers, particularly those who have been in receipt of benefits that previously did not qualify them to receive a full range of labour market services (paragraph 61).

    (l)  We recommend the StepUp approach should be extended beyond the original pilot areas in order to accommodate a wider group of clients (paragraph 64).

    (m)  We commend the Government's confidence in the underlying strength of the labour market and its relationship with employers prepared to engage in the programme (paragraph 65).

    (n)  We recommend that the Department for Work and Pensions actively explores routes to create flexibility and encourage these innovative Intermediate Labour Market solutions to unemployment and economic inactivity amongst the hardest to place, like lone parents, longer term unemployed, people with health problems or disability (paragraph 71).

    (o)  We believe it is essential that the 17% gap between the employment rates of ethnic minorities and the general working age population be narrowed. Whilst we commend the active approach being taken by Jobcentre Plus, we recognise that the pace of improvement until now has been relatively slow and highly varied between different parts of the country. Recognising that Jobcentre Plus is aiming to improve performance in 60 areas of deprivation and low labour market participation by ethnic minorities, we nevertheless do not believe that this will necessarily mean better outcomes for ethnic minorities. We recommend that Jobcentre Plus urgently reports on the effectiveness of its ethnic minority outreach projects and identifies further ways in which its programmes can be targeted to achieve parity faster. We particularly recommend that Jobcentre Plus places a greater emphasis on self-employment entry in conjunction with black and minority ethnic business development agencies (paragraph 73).

    (p)  We also believe that additional support should be made available by Jobcentre Plus to help further groups of working-age claimants to access specialist services. These need to address disadvantages such as a history of offending or anti-social behaviour; alcohol dependency; patterns of homelessness or insecure housing tenure; and domestic or family stress. Much of the best expertise in these areas currently lies outside Jobcentre Plus. We believe that Jobcentre Plus should concentrate on its own strengths and rely on expert, independent, specialist organisations in the voluntary and private sectors for the delivery of the many services needed by these clients who face significant barriers to work. From the evidence of Action Teams, Employment Zones and our discussions with providers in the UK and USA, we conclude that services to these clients - and their ultimate entry into the labour market - can be significantly improved by funding private and voluntary sector providers to undertake these tasks. We believe that the contractual architecture inherited by Jobcentre Plus needs to be overhauled so that these private and voluntary organisations are not simply contracted to deliver small bespoke "add-on" packages of help. Instead, their central role should be recognised, they should be given flexible funding and a broad remit of devolved service responsibility, matched by a transparent framework of accountability (paragraph 75).

    (q)  We recommend that the current Tailored Pathway pilot schemes should form part of a national roll-out (paragraph 79).

    (r)  Training in the New Deal needs to be delivered with flexibility to ensure that it is sufficiently work-focussed, brings participants up to employer standards and is relevant to local labour market needs. Government funded training should not substitute for skills development that an employer is already prepared to pay for and which is specific to that firm. Instead, Jobcentre Plus should aim to develop more portable skills ("soft skills") that are specific to the individual and will improve their progression prospects (paragraph 82).

    (s)  We recommend that the Government consider removing the different options and pilot programmes within the different New Deals, and instead allow advisers much more flexibility to design support around the needs of the individual. In doing so, they should draw on the more devolved models evident in our evidence on Employment Zones, Action Teams and the US (paragraph 84).

Engagement in the 'WorkFirst' agenda: the balance between opportunity and obligation

    (t)  We reject the options of time limits on benefits and requiring lone parents to work as a condition of receiving benefit (paragraph 86).

    (u)  We have concluded that the Government is right in steering away from requiring mandatory participation in New Deal programmes for groups receiving 'inactive' benefits (paragraph 90).

    (v)  We accept the need for attendance by certain lone parents at annual work-focussed meetings to be mandatory, essentially as a recognition that Jobcentre Plus staff often have to overcome a degree of fear and suspicion regarding the work agenda, which can make claimants unwilling to attend voluntarily (paragraph 91).

    (w)  We recommend that almost everyone receiving benefit on the grounds of incapacity for work should be provided with a face-to-face work-focussed interview at least once a year, when barriers to work could be explored and strategies discussed to overcome them. Recipients would be required to attend these annual interviews although some (such as those with severe disabilities for whom attendance should remain voluntary) would be subject to waiver or deferral where the interview would not be of assistance to, or appropriate for, an individual. We recommend that such interviews should be confidential, and independent of the Jobcentre Plus benefits administration system so that a client's willingness to consider work should not be used to trigger a fresh personal capability assessment which might lead to the withdrawal of benefit (paragraph 94).

    (x)  Urgent and sympathetic action is needed by the Government to address worklessness among sick and disabled people, too many of whom feel "written off" by society despite their desire to work. Much more needs to be done both pro-actively to engage with people on incapacity benefits concerning the possibility of working and to offer them the support and training necessary to get into the labour market (paragraph 95).

    (y)  Drawing on our experience from the Netherlands and the US, we recommend re-designing the New Deals around three principles:

      -    Work for those who can enter the job market quickly;

      -    Soft skills, work placements, job-specific training and active job search for others; and

      -    Intensive personal help ("re-habilitation" in the jargon) for those with the most significant barriers - e.g. drug abuse, ex-offenders (paragraph 96).

    (z)  We recommend that the principles above should become the principles guiding the New Deal overall, with advisers given the budgets and powers to apply those principles according to the circumstances of their clients and their locality. National benefit entitlement rules would continue to apply and Jobcentre Plus offices would be held accountable through monitoring outcomes rather than as now through centrally set options and programme rules (paragraph 97).

Job retention progression and sustainability

    (aa)  We recommend that the DWP move as swiftly as possible to the collection of data allowing the progress of former New Deal participants in retaining employment over 12 months, and in increasing their wage levels, to be monitored (paragraph 103).

    (bb)  We recommend that 'soft skills' training be an integral part of New Deal programmes aimed at harder to help groups and that the skills training in New Deal programmes be reviewed to see whether they provide these soft skills and workplace ethos (paragraph 107).

    (cc)  We recommend that Jobcentre Plus should develop partnerships with voluntary, not-for-profit and private organisations to provide re-habilitation services for this category of clients. This will involve one to one support, based on outreach work, to address the individual's particular needs (paragraph 108).

    (dd)  We recommend that Jobcentre Plus provides individual advisers for clients and develops its aftercare services for New Deal participants, so that an ongoing relationship is maintained with Personal Advisers or with an independent agency under contract to Jobcentre Plus (paragraph 111).

    (ee)  We recommend that Jobcentre Plus builds up its relations with employers taking New Deal recruits, encouraging them to develop induction programmes, and the use of mentors, and to give feedback and support to assist entry level employees to progress (paragraph 115).

    (ff)  We repeat our recommendation, made in our report on lessons from the ONE pilots, that protocols be developed to assist Personal Advisers to explore, in a more systematic and consistent manner, a new claimant's work readiness and the barriers they face (paragraph 118).

    (gg)  We are pleased that the DWP has taken on board the recommendations made in our report on the ONE pilots and is considering possible measures of 'distance travelled' as part of the development work for the 2003-04 Performance and Resources Agreement (paragraph 119).

Improving delivery

    (hh)  We believe that co-financing is a useful model and recommend that Jobcentre Plus programme funds could be placed with LSPs to be match-funded with other resources from local and central government. This would create real strategic partnerships equipped with a wide range of programme funds and would enable local decision takers to reduce duplication, fill gaps and achieve "double benefits" to both individuals and communities. We recommend that a pilot area be identified to test and evaluate this approach (paragraph 124).

The role of Jobcentre Plus

    (ii)  We fully support the Government's aim actively to engage business and to design interventions that meet the requirements of employers in both private and public sectors. We endorse the sector specific approach adopted by the employer­led "Ambitions" programme and propose that further sectors are actively encouraged, particularly where this can be in parallel with developing Sector Skills Councils. We specifically recommend that all training components of the New Deal, other than soft and Basic Skills, are made job-specific and matched to individual employers' actual recruitment needs (paragraph 131).

    (jj)  We recommend that Jobcentre Plus resources its Local Account Managers, particularly in big city conurbations, to work in small sector-specific teams so that expertise and contacts can be built up and employer and business needs properly investigated and understood (paragraph 132).

    (kk)  We recommend that specific funds be allocated to training Jobcentre Plus staff in the necessary skills to enable them to understand the needs of employers at local level. We also recommend that consideration be given to greater recruitment of staff from the commercial sector to perform the Account Manager function within Jobcentre Plus (paragraph 133).

    (ll)  We are concerned at the apparent lack of detailed knowledge of, and support for, Business Links and recommend that the Departments concerned take urgent steps to promote all the services and assistance available to those contemplating self-employment or starting a small business, and to increase the relationship between Jobcentre Plus and Business Links from awareness to active involvement on a continuous basis (paragraph 139).

    (mm)  We recommend that a range of specific sector initiatives be launched - using the template of "Ambition" to help prepare employers in the public sector for the recruitment of Jobcentre Plus clients and to tailor packages of job preparation for the needs of these public sector employers (paragraph 141).

    (nn)  We endorse the Prime Minister's favourable assessment of the value of Employment Zones (paragraph 151).

    (oo)  We recommend that the proven model of Employment Zones should be extended into a further 15 areas of labour market need within the term of this Parliament. We also recommend that the Government promotes more schemes similar to the Seattle Jobs Initiative, the Oregon "Steps to Success" programme and the "Transitional Work Corporation" in Philadelphia (paragraph 154).

    (pp)  We recommend that a review of innovation financing is undertaken in order to identify ways in which it can stimulate entrepreneurial activity and promote a stronger culture of risk-taking amongst Jobcentre Plus managers and contracted suppliers. The key tests should be focussed on agreed predicted and actual outcomes (paragraph 155).

    (qq)  We recommend a more systematic use and replication of the evaluations, pilots and best practice or innovation within the New Deal's design framework (paragraph 157).

    (rr)  We understand that, following the Social Investment Task Force report, the DTI is sponsoring a range of initiatives that replicate some of the Reinvestment Fund's characteristics. We have not found any evidence that these have been co-ordinated with Jobcentre Plus programmes and strongly urge closer integration (paragraph 162).

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