Examination of Witnesses (Questions 20
- 39)
WEDNESDAY 9 NOVEMBER 2005
MS LESLEY
STRATHIE, MR
KEVIN BONE
AND MR
MATTHEW NICHOLAS
Q20 Mr Dunne: Yes.
Ms Strathie: Actually we did with
previous ministers develop a set of criteria that we would apply
broadly to whether we considered an outlet had now reached a point
where we had to start a process of saying, "How many customers
do we serve and how much activity is there?" and so on. That
is not something that we took and applied, but we had actually
worked through that these would be the kind of things we would
have to take into account if we were going to consider closure
of an outlet. For us, closure for those reasons is quite separate
from bringing on board the new model offices of Jobcentre Plus
and deciding which offices close as you do the makeover for the
new ones. That is a pinned-down programme of work and has been
for a very long time, but, as we took on board the Efficiency
Challenge and as the population changes and as traffic changes,
we are actually developing a blueprint for the organisation, what
our end-to-end range of services are and that will be something
for the future for us. What I am saying, just to be absolutely
clear, is that we developed a set of criteria, they are there
on the shelf, but we have not taken that set of criteria and started
applying them anywhere, if that makes it clear.
Q21 John Penrose: I just want to
move us on to talk about the employment initiatives strand of
your work. I think you have already mentioned that you are starting
to think of an alternative way of measuring your success, job
outcomes and other things like that.
Ms Strathie: Yes.
Q22 John Penrose: I think that the
performance against the job entry target, as I understand it,
is slightly worse than expected and that you have got people staying
on Jobseekers' Allowance for longer which means you have an increased
claimant count. Firstly, what is your reaction to that and, secondly,
what are you doing to sort it out?
Ms Strathie: I will ask Matthew
to come in in a minute to talk about job outcomes and job entries.
First of all, we are struggling against our job entry target points
which are the explicit weights we apply to different types of
customers. The transformation of Jobcentre Plus was to move the
business away from the job-changer and the very short-term unemployed
and a much greater focus on the hardest-to-help, the lone parents
and people on inactive benefits, Incapacity Benefit. Now, where
we are struggling this year, we are not going backwards in terms
of how many we are helping, but the gap between last year's performance
and the targets that we have set ourselves for moving those priority
group one customers, lone parents and those on inactive benefits,
is a big challenge for us and that is where we are not making
the numbers yet. We have a national job entry action plan which
has been launched right across the organisation in the summer
which focuses on three areas. Our analysis shows that there is
not one clear area or issue that we can say is contributing to
job entry poor performance or rising claimant count. That is under
analysis between us and the Department every month by our economists
and analysts. But we focused the plan on the things that we could
change and where we knew we had an impact and that was adviser
productivity where we have asked for an increase of 50% from our
advisers on their job entries. Advisers do a whole range of things
as well as get people finally into work. For adviser productivity,
our process is for how we handle all of this and our employer
service, so we know that we need to get more vacancies, and this
is back to your point, Terry, at the start about vacancies, we
need to get more vacancies for the type of jobs in the sectors
that our customers can go into. For example, one of the things
that analysis tells us is that 58% of people that we help, we
help into entry-level jobs. One of the biggest sectors that we
work in is retail and I do not think anybody around the table
would need me to spell out what a difficult time retail is having
in this country now. So, issues for the markets we are in, what
is happening globally. We have issues around us trying to make
the transformation at such a level in the priority groups we help
and we have issues in our personal advisers producing enough job
entries. We monitor this on a daily basis. I and my management
team manage this on a weekly basis and we have a pulse report
which comes out which tells us every single job submission and
every job entry and so on at every point. I am delighted to say
that week four's performance this month has not only shown a significant
leap in job entries, but in job entry points, so far more of the
priority groups. As for green shoots of recovery, well, one week
is too early to say, but I would like to think that, from everything
I am seeing out there myself and the deployment of this plan,
we are on course and that we will make a difference. We will not
know until January whether we will hit the target at the end of
March. Once we have had our big seasonal months and our validation
processes, I will be clear then if we make it, but we will push.
It is a big challenge for us this time compared to any other time
and we have had a performance gap in this, and I need my people
to deliver those job entries, but I need them to do it without
the loss of strategic direction. There is no point in us spending
money in this public service by just helping those who can help
themselves to where the job entry is. But, if we are going to
help end child poverty, the focus has to be on lone parents and
if we are going to move people off Incapacity and help the Government
deliver that 80% employment rate, we have to help those people.
That is the real challenge for us now.
Q23 John Penrose: If I can just follow
up on two of the points you made there, the first one which was
slightly concerning was where you said that, having done the analysis,
there was no one obvious area and that just leads me to wonder
whether or not you are confident that you understand all of the
things that need to be done or whether or not you are just pulling
on the levers that you can pull on, but you do not know if there
are other ones you should be pulling on. Secondly, a 50% improvement
in adviser productivity is a big number and it would be tremendously
impressive if you could achieve it, but could you tell us a bit
more about how you are doing it other than just shouting, "Work
faster"?
Mr Nicholas: We have tried it!
The analysis I have seen of our adviser productivity did show
enormous variation. It is very easy with advisers who are very
customer-focused to find they spent their time with customers
on activities, but were not actually getting anywhere, and it
was not that they were sitting around twiddling their thumbs.
Every one of our adviser managers now would see every week the
productivity of every one of their advisers and we have set up
a rating system so that we can sit down with the ones who are
performing less satisfactorily and see what the barriers were
to their succeeding. So it is not just, "You're not working
hard enough", but it is actually, "Why are you not succeeding
with your customers, whereas the adviser next to you has actually
got three times as many into jobs?" If we can improve the
amount of productive time that our least-productive advisers spend,
we could make a significant improvement, so it is targeting those
who are not proving as effective. I think one of the reasons why
we are not recording quite the performance we were is that some
of our channels for engaging with our customers mean that we do
not put our fingerprint on their job entries, so if they are dealing
directly with an employer successfully, we cannot count that as
a job entry in our system. Therefore, things that we want strategically
to encourage because we do not want to be intervening just for
the sake of it do mean that we are not counting performance. Adviser
productivity is an area. We are looking at whether every contact
with a customer counts. If we are talking to somebody on Incapacity
Benefit, are we also suggesting to them that they see one of our
IB personal advisers? It is trying to get everyone in the office
focused on the contribution they can make. That is why we feel
that if we put all of those bits of the jigsaw together, every
one will contribute rather than us just pulling randomly at a
set of levers.
Ms Strathie: The rise in the claimant
count, which is about 60,000, that is a concern for us because
we have to keep reviewing everything we are doing. If you have
a choice of whether you spend your money here or you spend your
money there, that was a choice and a set of risks that we took
our Ministers through and agreed our transformation at every stage
on how we did it. We know that there are risks because over all
the years, way back to the original Restart programme of intervening
with people, we know that if you intervene with people you have
an impact. You actually have an impact on claimant count as well
as an impact into jobs, so we are very mindful of monitoring this
increase and we have to keep questioning, "Have we tried
to do too much too quickly?" and my message to my people
is, "It's not one or the other. It's not get the priority
groups in or deliver your target. It's not deliver the job entries,
but don't worry about any rise in the claimant count". So
I am not saying for one minute, and the analysis shows that you
cannot at the moment say, that the reason the claimant count is
rising is because Jobcentre Plus is doing less with that JSA load,
but every month we meet Ministers, analysts and economists and
we sit and go through what it is telling us for that. Therefore,
we have not any answers, but we will keep on searching and we
have a demand-led intervention regime, so for all of our customer
groups, the more people we have claiming, the more work there
is to do, and that then becomes an issue if we have a rise in
the Jobseekers' Allowance claimant load. It is demand-led, and
I need to look first and foremost to see if I can move resources
from another part of the business. If that becomes unmanageable
for me. I have to have a conversation that says, "Do we maintain
this regime? Do we change it? How do we do it?", but that
would be for ministers to decide.
Q24 John Penrose: We will take that
up with ministers then. Just on the Building on the New Deal target,
where I understand the roll-out is a good deal slower and more
limited than was originally announced, presumably that is going
to have an impact on your ability to increase employment rates,
but what impact do you think that is going to have and again what
can we do to mitigate that?
Mr Nicholas: I think it is very
difficult to put a figure on it, saying that the Building on New
Deal, happening when it does and to that scale, will have X impact
on helping people into work. At the moment I know ministers are
looking very carefully at a balance of where we can spend our
funding for next year because there is a great number of calls
on the pot we have for training and employment programmes. It
will be balancing expenditure there against expenditure on more
provision for people on Incapacity Benefit, for example. I could
not say that Building on a New Deal to that scale at that time
would take so many thousand off our success or not; it is not
as scientific as that.
Ms Strathie: I think our aspirations
as a business in the business of getting people into work are
that taking the huge success of the New Deal and all its successor
New Deal programmes, we want to take the resources for the New
Deal, build on everything we have learnt and have a much greater,
tailor-made approach to the individual in what the adviser deems
as the best way of getting this person into a sustainable job.
Q25 John Penrose: But given the fact
that you have described all the challenges you are facing at the
moment and you are struggling to deliver those, and there is a
huge amount of change going on, is it possible that Building on
New Deal being postponed is actually a bit of a blessing in disguise
in letting you actually get on and solve what is on your plate
already?
Ms Strathie: I am a well-balanced
Libran on this because any extra change coming into the system
eats up your management capacity in the organisation, so would
I, from where I sit, wish that BoND, Building on New Deal, had
come a long time ago? Yes. At the time when we started to develop
with the Department, with our strategy colleagues, saying, "We
need to reshape this, we need to revamp it, we need a future",
well, then it was a longer time in gestation and agreeing resourcing
and so on with HMT. So when we finally had the delay, I would
say yes, it would have been another major distraction. That is
on one side—just implementing change. On the other side,
we have finite resources to devote to our third-party provision—Matthew's
area there. We have had to take considerable cuts in that and
Ministers have had to take very hard decision on priorities, and
more of that as we manage the rest of this year and more into
next year. Had we had BoND sooner we would have been in a much
stronger position. So it may not be helpful but, on one hand,
I breathed a sigh of relief when it was delayed for a bit; on
the other hand, to balance the books I would like to have it much,
much sooner.
Q26 Harry Cohen: Can I just ask you
to be a bit more specific? What are the average waiting times
for applicants getting a work-focused interview after their initial
application? How does that compare with your Department's target,
and what is the trend?
Ms Strathie: I may have the answer
to that in here. We certainly have standards on answering the
'phone, we have standards for the call-back for the second telephone
contact and then we have standards for the first financial assessor
interviews to decide on entitlement and personal advisors.
Mr Bone: I have got the indicators
that we work against—a different one for each of our benefits.
For Income Support it is 12 days from a claim through to the customer
getting payment; for Jobseeker's it is 12 days as well and for
Incapacity Benefit it is 19 days. Currently, against those targets,
for Income Support we are running at 10.8 days nationally (so
beating that target); for Jobseeker's Allowance we are at 13.5
days (so just over the target) and for Incapacity Benefit at 15.2
days, so beating that target there.
Mr Nicholas: That is the full
end-to-end, from making your claim to getting it paid. I do not
think we have figures with us on how quickly you see a personal
advisor. We would have figures available and could let you have
those.
Q27 Harry Cohen: What is the trend?
Is that deteriorating?
Mr Bone: As we said earlier, we
had an impact through the Contact Centres in the summer. The action
plan we put in place to address that is turning that round now.
Q28 Harry Cohen: Can I just put one
more point here? It is a bit of a crossover between your call
service and employment initiatives. Clearly, we have a picture
of struggling with it all (let us put it that way). Are you getting
close to putting to Ministers that you should be concentrating
on your core services and not having any new employment initiatives?
Ms Strathie: I do not think I
am getting close to having any different conversation from that
which we always have. Jobcentre Plus's success brings with it
many, many parties across Whitehall and beyond who want to interface
with Jobcentre Plus because nobody has the amount of contact with
the citizen that Jobcentre Plus has. So we have lots and lots
of projects (which Kevin may want to say a bit about because this
is all in his domain, as Business Design Director and CIO) where
we are developing various changes that have been in the system
for a long time, agreed by different Ministers, agreed by different
strategists, which have long lead-in times. Our challenge is to
stop that growing as we focus hard on our core services and to
constantly ask ourselves whether something can stop.
Mr Bone: One of the things that
Lesley mentioned earlier was that in the organisational design
review we have brigaded responsibility for all change into my
area and we are still going through getting our arms round all
of that. What we have learnt is that in total there are over 150
different projects of change, whether they are business changes
or business changes with IT, going on in the business at the moment.
So we are going through a process of looking at that and saying:
"Which are the ones we absolutely have to do and which of
those are, as Lesley said, old ones which we might not need to
continue doing?" That is a process that is just getting under
way and we will let that process mature to make sure that we are
only doing what is absolutely necessary to deliver our services.
Q29 Michael Foster: I wanted to go
back, for a moment, on this issue you were talking about in terms
of the difficulty of getting people into work. Is not one of your
partners the voluntary sector, the providers? Why is it that there
has been such delay in sorting out arrangements with those voluntary
sector providers?
Mr Nicholas: It has been very
difficult this year—as you picked up—partly with the
election and the change in our ministerial team in May. The new
team wanted to look across the whole of the funding pressures
on employment programmes and decide what the priorities were,
which meant that we could not move forward as we would have done
at the beginning of the year with our contractors, giving them
a clear signal of what was going to happen through the year. That
meant that we had to roll over some contracts earlier in the year
and then, again, in September, which was not satisfactory for
the partners we deal with in giving them a clear signal. We have
now started proper re-contracting for a provisional start next
April. We are also spending less money this year than we spent
last year—we had about £186 million less to spend—so
that has led to some very tough discussions with the providers
about which contracts we could afford to continue, which were
our most productive ones and where was the quality satisfactory.
So as well as the delays it has been difficult for them because
we have been offering less business and having to take some tough
decisions about how to continue.
Q30 Michael Foster: Have you any
idea what a shambles that all is? People are actually not knowing
whether there are jobs to continue, whether they can continue
to employ people, whether they need to make people redundant or
whether they can even offer you a service in the future, because
their organisation has collapsed in consequence.
Mr Nicholas: I spend a lot of
time with providers; I was with the Association of Learning Providers
last week, I am meeting them again immediately after this session
and I speak to individual providers a lot of the time so I am
very aware this has been a very difficult year.
Q31 Michael Foster: I have correspondence
here from East Sussex Archaeological Museums Project. They have
an 80% success rate. They have not a clue whether or not you are
going to need their services next year. What I really want to
know is about the future, and it is this: have Ministers yet given
you any direction at all as to the numbers for next year so that
you have any idea about what you are going to be able to offer?
If so, what are those numbers?
Mr Nicholas: We have got clear
signals about what we are expected to do for the New Deal, which
is the big procurement, and we are in the middle of seeking bids
from providers now for contracts for next year. We have not yet
decided on what we can buy in some other areas of provision. There
is a stock-take going on this month between strategists and Ministers
about what money we have to spend, and I am expecting that to
be sorted out early next month.
Q32 Michael Foster: So early next
month you will start being able to tell people. The figures I
have here are that you have got something like a 75% reduction,
they are anticipating, for work for the over-25s. Is that alarmist
or is that right?
Mr Nicholas: No, there have been
very significant reductions in what we call work-based learning
for adults, which is a big programme. That is where the bulk of
this year's financial reduction was made, so there have been very
significant cuts there.
Q33 Michael Foster: Can you see any
logic at all, if people can get an 80% success rate, in reducing
that particular project?
Mr Nicholas: That is a strategy
decision by Ministers—how much money they want us to spend
on different groups of customers.
Q34 Michael Foster: So the money
has nothing to do with the results?
Mr Nicholas: The money is a political
decision about where Ministers want to invest; it is not a decision
we take.
Q35 Mr Dunne: Some of my fire has
been stolen by Michael, but it is very valid. My concern is more
on the training budget, which is part of what Michael has been
talking about. The Guardian reported that you had over
£100 million taken out of the training budgets for last year,
which you are having to recoup from this year, and you have just
referred to £186 million in the current year, which is the
total figure for the total reduction of spending in the current
year, I think you said, on all third-party providers. Can you
address the training issue in particular, in relation to the training
of your own staff? You talked about the problems in the Contact
Centres coming from a lack of training. How much has that budget
been cut? Secondly, training of customers, in particular lone-parent
families. The evidence we have had from one-parent family organisations
suggests that the entire training budget for one-parent families
has been cut, and we have already identified that as a key target
for getting one-parent families back to work.
Mr Nicholas: I do not have the
figures here for the training of our own staff. We could provide
those if you wanted them. You have raised two points. One, the
expenditure last year; we did not have to recoup that from expenditure
this year, so we spent more than we originally planned last year
but we covered that from other areas. That did not roll over into
this year. We have taken a very significant reduction in our provision
for training, as I said, and that means there is less contracted
provision available for lone parents and for other adults.
Q36 Mr Dunne: Is there any training
provision for lone parents at the moment?
Mr Nicholas: Some, but less than
there was.
Q37 Mr Dunne: Would you be able to
quantify the budget that was available and compare it with last
year for lone parents?
Mr Nicholas: We could probably
produce figures about the number of lone parents who have been
on training programmes this year. I do not seem to have that.
Ms Strathie: I think it is important
to note that in a geographic area there will be a range of provision
and a range of providers. We have encouraged, over the years,
the efficiency of providers providing for more than one customer
group. You may have a programme centre dealing with a whole group
of our customers, so it is not just isolated, lone-parent training.
That is why it would be difficult to break down the detail. However,
we could tell you how many we have helped and how many went through
that provision, if that would be helpful.
Q38 Justine Greening: In your memorandum
that you sent us you noted that Pathways to Work continues to
be very encouraging, in terms of its performance. What lessons
do you think Jobcentre Plus has learned from those initial pilots
and which elements do you think have been most successful in Pathways
to Work?
Ms Strathie: I think we are learning
because we have independent evaluation. The learning will be ongoing
and that is just early learning because the long-term impact study
will be evaluating the success. I am so pleased with what we have
achieved in numbers—over 17,000 people now helped into work
through Pathways. We are helping people who are sick and people
with disabilities, and we must be clear that some people who are
sick and claiming Incapacity Benefit also have disabilities, but
many do not. The first thing I have learned—and I have learned
this very much from going and talking to providers helping people
and talking to employers who have taken them in on the pilots
and talking to the individual customers—is that many of
these customers just have initially the same needs that any long-term
unemployed, any disengaged in the labour market person had, whether
they had a health problem or not. They need their confidence to
be built, we need to get them into a room with like-minded people
and we need them to understand there are jobs out there even if
you are over 50, even if you have a condition to manage or even
if you are a person who has a disability. That, for me, is the
big thing; we need to focus on the individual and what they can
do, not their condition or their disability. We have learned that
many, many of this customer group want to work, they just did
not think they would have the opportunity. So we have the various
elements of that and the take-up has been great. We started off
with the voluntary approach and now we are bringing in more people
for a work-focused interview. Why do we do that? The interview
is mandatory, engagement in the programme is not. That is because
we have learned from all of our labour market programmes that
the point at which you can engage the person in that face-to-face
contact, and learning, you can start to move them in a way that
sending people mail-shots etc does not.
Mr Nicholas: I think the latest
evaluation shows that probably the key thing we have learned is
our advisers feel more confident. I think our advisers were very
tentative at first because they thought the disability issues
would be the main concern. When they have realised that the issues
are about confidence, about lifestyle, about activity—which
are more similar to the ones they have been dealing with—I
think advisers now feel more confident they are intervening more
effectively. That is probably the biggest learning of the latest
evaluation.
Ms Strathie: The training that
we give our personal Incapacity Benefit advisers is eight weeks.
It is the greatest degree of training that we give to any of our
adviser groups, but that, for me, is crucial to the success of
Pathways.
Q39 Justine Greening: Do you think
that eight weeks is enough, or do you think it could be more than
that in the future?
Ms Strathie: I think the evaluation
suggests that we have got it just about right. It is one of the
things that we feel is a real success. With anything, as you are
developing things you tend to start off with the more expensive
model and then look at ways that you can do it with less. At the
moment, I am convinced that where we are now is the right place
to be.
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