Examination of Witnesses (Questions 20-36)
21 MARCH 2005
PROFESSOR STEVE
FOTHERGILL AND
COUNCILLOR BILL
FLANAGAN
Q20 Mr O'Brien: When do
you expect to enter into dialogue with them?
Professor Fothergill: We have
had a preliminary discussion. We have asked for representation
on the task force which already includes, for example, representatives
of the core cities. In the Northern Way area there are round about
two and a half million people in the former coalfields so we think
it is not unreasonable to look for coalfield representation on
there. The response we have had is, "Look, the whole structure
of the management of the Northern Way is a little bit in flux
at the moment." They hear what we are saying and they will
come back to us, but if they do not come back quickly I am sure
we will be pressing.
Councillor Flanagan: I think the
point about this is that we do not just want to go on the Northern
Way whinging and saying, "Don't leave us out. We do not want
to have to keep travelling in." We take a lot of stuff in
with us. We have gathered information. We know the situations
in the older mining areas. It represents an area as big as the
North East in the Northern Way. We have got two and a half million
people in the Northern Way. We have got information not just on
them but on the jobs available. So we have asked that the Professor
here goes on the task force and if he is on that task force he
will be a good contributor as well as making sure that some of
the areas that the Deputy Prime Minister has mentioned in the
coalfield areas are not forgotten. It is a question we ought to
ask of Clive Betts because he would like all my lot in Chesterfield
to move into Sheffield to work because he has been after Sheffield
for a number of years when he was Leader of Sheffield.
Chairman: On that note, I am going to
bring Clive Betts in now!
Q21 Mr Betts: Thank you
for volunteering to come, Bill! Can we just have a look at housing.
The Government promised some specific action in the coalfield
communities to deal with the housing problems. Has there been
any progress or is it still one of the real concerns that you
have got?
Professor Fothergill: That is
correct. I think we did have hopes in the autumn that we were
getting close to having a ring-fenced programme to address low-demand
housing in the former coalfield areas. That is not now going to
happen. At least it is not going to happen in the foreseeable
future. It does not close down all the avenues for action. There
are possibilities of using some of the money that has been allocated
to be used outside the Pathfinders. There are possibilities for
influencing the spending and the priority of the Regional Housing
Boards but it does leave us in a situation with very little tangible
to hold on to. We are still quite a long way from actually delivering
money and action in most of the areas of low-demand housing in
the coalfields and that is not really where we thought we were
going to be if you had asked the same question six months ago.
Q22 Mr Betts: Do you notice
a difference between the Pathfinder areas and the rest? Is that
a distinction that you think is going to cause further division
in what is achievable in the next few years?
Professor Fothergill: You have
got to bear in mind the existing Pathfinder areas only cover a
minority of the coalfield areas. They cover part of the South
Yorkshire coalfield and they cover part of the North Staffordshire
coalfield, but there are large areas elsewhere in the country
which are affected by low-demand housing, and English Partnerships
did their best to document this. They identified 50 areas—cold
spots—outside the Pathfinders in the coalfield areas where
there was a problem with low-demand housing. It is quite how we
find a practical way forward to address those 50 areas that is
the issue at this stage.
Q23 Mr Betts: One or two
have initiatives but you say the majority have not and there is
nothing on the horizon?
Professor Fothergill: In the recent
announcement of the five-year housing plan that ODPM announced
in January, I think it was, there is going to be progress in the
East Wakefield area, I understand, also in the former mining bits
of West Cumbria, but that still leaves important areas in County
Durham, in the Wigan area of Lancashire, around Mansfield, and
even some areas in South Yorkshire in Doncaster where there is
not an obvious way forward at this stage, and that is of some
concern to us.
Q24 Mr Page: Professor
Fothergill, in response to John Cummings you mentioned that some
90,000 people are still looking for jobs to replace their coalfield
jobs that have been lost. Have you any timescale on that? Have
you any graph that you can monitor the progress of your initiatives
against the take-up of these numbers?
Professor Fothergill: I have been
undertaking research to try and look at new job creation in the
coalfields, really looking at what has happened since the early
1980s. Our numbers are showing quite clearly that the pace of
new job creation for men in the coalfields has accelerated in
the early years of this new decade. There is no doubt about that.
I think you can see that particularly in the numbers for Yorkshire.
You can also see it as you drive around South Yorkshire. There
have been very real improvements recently. If that present rate
of job creation can be sustained we might only be on about another
five to seven years to plug that 90,000 gap.
Q25 Mr Page: Okay, good.
Professor Fothergill: On the other
hand, as I said earlier, it is not just a question of plugging
the gap created by the pit closures. Those areas had huge unemployment
even before the pit closures started so you have to go a little
bit further than just plugging that 90,000 gap to really eat into
the inherited imbalance in the local labour market, if that is
not too much jargon.
Q26 Mr Page: That is fine.
That raises just two supplementaries as far as I am concerned.
The first is the Committee has already expressed a degree of concern
over the type of jobs that have been created. Everybody keeps
quoting these call centres as a classic example. If I could quote
from the Committee's report it says: "The EP and the RDAs
need to draw up masterplans for new developments setting out the
required links of employment, housing . . ." et cetera,
et cetera. Has there been any improvement in the quality and
the diversity and the availability of jobs coming forward or are
they all rather quick-fix jobs?
Professor Fothergill: I have got
to say I cannot give you a definitive answer to that question
but at the same time I would say that we perhaps ought not to
have an over-romanticised view of the jobs that were there in
the coal industry in the first place. Maybe in more recent years
some of the surviving jobs have been well paid because of high
productivity but if we go back 20 or so years ago they were not
always wonderfully well-paid jobs and the terms and conditions
of employment were not always absolutely wonderful either. There
has been a shift over time in the whole economy and indeed in
the coalfields away from manual work towards white collar work
and it is true that on the whole the terms and conditions are
somewhat better in white collar work. Giving you a definitive
answer to that question and saying on balance are the jobs better
or worse would need quite a bit of extra research. All I have
been able to do is put numbers on this game and say, "Look,
of the jobs that we have lost we have now replaced 60%."
Q27 Mr Page: Can I quote
some of your own words back to you, which is always helpful. In
your paper you mention: "The evidence supports the view that
in the coalfields, as in some other parts of older industrial
Britain, there is a huge diversion of people with health problems
from unemployment to incapacity benefits. Estimates suggest that
as many as 100,000 men in coalfields are currently hidden unemployed
in that way." If we are chasing the 90,000 and you feel that
there are 100,000—and we all know the difficulties of getting
people off incapacity into active employment again—how confident
are you of that original statement of five to seven years?
Professor Fothergill: We are in
the situation now where the economic growth which has happened
nationally and indeed in the coalfields has brought down the numbers
of conventional unemployed on Jobseeker's Allowance but it has
made virtually no dent in the stock of people on incapacity benefit.
Q28 Mr Page: Is it still
2.4 million?
Professor Fothergill: It is 2.7
million if you add in Severe Disablement Allowance. From here
on if there is to be economic growth nationally, and indeed locally
in the coalfields, there has got to be not only jobs for those
people to go to but they have also got to have labour market activation
policies to facilitate re-entry into the labour market for those
who want to work. We have got to recognise that many people on
incapacity benefit are unable to work in any circumstances because
of their health problems, but the evidence does suggest and does
show very clearly that in the parts of the country where you have
a very, very strong economy—in parts of the South East of
England for example—it is possible to get incapacity benefit
numbers way, way down. But to do that in the coalfields we have
got to have a strong economy, and we are getting there but we
are not there yet. And then we have got to have the help for the
individuals to re-engage with the labour market, which is indeed
being put in place but it is a huge problem. It is where the unemployment
has now disappeared to in the coalfields. If you look at the claimant
unemployment figures, it is now very low, lower than when the
pits were working indeed, but that does not mean to say that the
imbalance in the labour market has disappeared. That joblessness
just shows up in other parts of the benefits system these days.
Q29 Mr Cummings: I was
just reflecting on the answers to Mr Page. Evidence to the Committee
last year suggested that the coalfield areas still have very low
educational achievement and indeed still poorer ill-health. Has
the gap between these areas and the rest of the country now narrowed
or do you see it narrowing?
Professor Fothergill: There is
some, as yet unpublished, research from the Department for Education
and Skills which has been monitoring attainment at school of kids
at 16 in the coalfields. At 16, kids in the coalfields are well
behind the national average and what this research has been doing
is looking at the rate of catching up, if you like. And, yes,
things are getting better in the coalfields. Educational performance
at 16 is improving. And, yes, the gap between the coalfields and
the national average is narrowing, but to completely eradicate
that gap would require another 50 years because that is the speed
at which that gap is being closed. It is closing but very slowly
indeed.
Q30 Mr Cummings: To what
do you attribute that? Record sums of money are now being put
into education?
Professor Fothergill: Educational
performance is improving. It is about closing the gap here. To
understand why some areas lag behind others I think you undoubtedly
have to look at deep-rooted social and cultural factors.
Q31 Mr Cummings: When
you say some areas, are you comparing coalfield area with coalfield
area or coalfield areas with other industrial areas?
Professor Fothergill: With the
national average. Other older industrial areas often share the
coalfields problem, it is fair to say, yes.
Councillor Flanagan: I have got
to say I do not think for all the massive amounts of money that
have been put in—and nobody can dispute there has—that
it has been earmarked specifically (unless this latest research
that so far nobody has got is showing this) for the coalfields.
They have spread it across the board, and that is a good thing,
and everybody has gone up. Steve is saying we have gone up slightly
and narrowed the gap. I did not think we had. I thought we had
maintained the same differential.
Professor Fothergill: It is such
small progress it is almost not noticeable. One argument can be
discounted though and that is that somehow the raw material in
the coalfields is worse than anywhere else because if you look
at the performance of kids at age 11 in the coalfields compared
to the national average, it is only fractionally behind the national
average. It is a tailing off of performance in the mid-teen years
that is at the root of the problem, and that must surely be rooted
in social and cultural factors.
Councillor Flanagan: The ones
that go on to get a university degree after 16 or 17, wherever
they have gone to get their degree that is where they stop to
look for their job because they know what there is where they
have come from. As was pointed out by Mr Page, the jobs that we
have tend to be the stacking jobs and call centre jobs although
they are not totally, so the educated youngsters tend to go away
and stop away.
Q32 Mr Cummings: To what
extent are government departments—health, social services
and education—recognising the special needs of the coalfield
areas and concentrating their resources there?
Councillor Flanagan: From the
government settlements that have been made to places like Derbyshire
County Council last year and the year before somebody has recognised
that there is a need and they have had more money for education
and social services than perhaps the average. I used to come down
here and always moan about the amount of money per child in Hampshire
compared to what there was in Derbyshire and Nottinghamshire.
It is not the case any longer and that has been narrowing. In
both social services and education I think there has been a move
in the amount of money that is coming into the coalfield areas.
Q33 Mr Cummings: Obviously
much more could be done?
Professor Fothergill: Could I
just add a rider to that. If you look across government departments
it has always been the case that the closer you are to ODPM, which
is where the Coalfield Initiative started, the greater the emphasis
on helping the coalfields. Those departments which do not have
very close working relationships with ODPM or are only tangentially
related to it, for example the Department of Health, are pursuing
rather different agendas. That is not to say we have not had some
benefit but it is ODPM first and foremost that has been in the
driving seat and has been the most conscious of our needs.
Q34 Mr O'Brien: Funding
is obviously an important factor and in our report we did express
concern that a number of funding programmes were coming to an
end—the question of single regeneration, the question of
enterprise zones and the fact that funding from the European Social
Fund will end in 2006—and the question that I would put
to you is is there a need to replace them? Do former coalfields
still need that special funding or is regeneration producing its
own income and self funding? What do you think?
Councillor Flanagan: They have
been the big ones. They are the ones that have helped us initially
from the days of Objective 1 and Objective 2. I do not suppose
it is within the compass of any of us to say that we are going
to keep getting the same amount of money. There are another 10
members who are going to take a lot of that and they are entitled
to it more than we are. The development in South Yorkshire has
taken them out of the figures that warrant them to be in Objective
1. However, on state aid I think our Government ought not just
knuckle under as easy as it is doing to Europe when they say,
"We are going to reduce the numbers to five million from
11 million." I think state aid does a lot of good and it
helps our Government to redress the areas and to enrich the areas
that are poor. I know Europe think that we subsidise goods. We
do not want you to subsidise the older industrial industries that
cannot compete but to help kick start the new industries that
might come onto those sites. So state aid has got to continue
and it is all that there is left really.
Q35 Mr O'Brien: Private
finance initiatives on public services?
Councillor Flanagan: That is the
public side.
Professor Fothergill: What is
at risk here when you mention state aid is Regional Selective
Assistance, which has been the principal form of UK central government
support to businesses in less prosperous areas. The issue that
we are dealing with at the moment is that Europe wants to eliminate
state aid, ie eliminate Regional Selective Assistance from large
parts of Britain and much of that would come from coalfields,
and we are trying to claw as much of that back as possible.
Q36 Mr O'Brien: We are
back to the RDAs again, are we not?
Professor Fothergill: No, I think
this is about the relationship between Britain as a Member State
of the European Union and the European Commission and the Commission's
desire to bring a lot of policies into line with the enlargement
of the European Union, which means it is saying to Member States
like ours, "You can, out of your own money, only spend less
on regional development because we think the priorities are elsewhere
in Europe."
Chairman: Gentlemen, I am afraid we are
out of time. Thank you very much for coming along to help us with
our inquiry today. We very much appreciate it.
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