Examination of Witnesses (Questions 140
MONDAY 20 NOVEMBER 2006
STRATTON CBE AND
Q140 Miss Begg: Have you got any
examples of that kind of community involvement which has increased
the employability of people from the ethnic minorities?
Ms Stratton: I am not supposed
to talk about Fair Cities yet.
Q141 Miss Begg: I was going to come
on to Fair Cities. You mentioned that the involvement of employers
in the design and the execution, as you said, matters a lot and
Fair Cities obviously has done that. Really it is that kind of
detail I would like. What was it that was so special about Fair
Cities, what was it that, in your judgment, made the difference
from all the other programmes that we have seen?
Ms Stratton: Conceptually, Fair
Cities is really easy to understand; in terms of implementation,
it is a nightmare. Let me start with the concept. The concept
is a deal, a deal between employers in a locality, on the one
hand, and the supply system, on the other. The supply system,
I am grossing up LSC, Jobcentre Plus, FE colleges and community
organisations, essentially employers are saying, "If you
give us qualified candidates, we will guarantee an interview,
in principle we'll hire them and moreover we will work with you
to shape that provision, so to help re-engineer it, and"
perhaps most important "we will examine our own recruitment
and HR policies to ensure that they are fair and not discriminatory."
That is the concept, and there are employer boards in the three
cities, which are composed of top chief executives, which have
influence within the peers in their sector, and actually can have
enough influence about the performance in the supply system to
use it as a lever up. The way that this works is not to create
another parallel system but rather to build on what is there,
to take the best, identify the best community organisations, the
best private or public providers and, effectively, create pipelines
which stop with an employer and say, "Okay, if we want a
job of engineer in BT Openreach, here are the competencies; now
let's work backwards to find out which provider and community
organisation can best deliver that." What we are trying to
do is create almost supply chains, if you will, where all the
outreach is done by community organisations. Some of those community
organisations do the whole thing; in some cases you have the specialised
vocational training, work experience component which goes into
the employers are all very different. I think what Fair Cities
does is it deploys or draws on employer experience in helping
community organisations meet both sides of it.
Q142 Miss Begg: The thrust of the
original New Deal was just to get people job-ready. The argument
was that the jobs were there; if only people were job-ready then
they could get the jobs. What you are describing is the reverse
of that, that the employer is at the front end, deciding on the
kind of person they want to employ and then they are looking out
into the community for that. Is that particularly useful, because
obviously today we are looking at the employability of minority
ethnic people, is that a much better approach for everyone, or
is it useful specifically in terms of minority ethnic people?
Ms Stratton: Knowing what employers
want is useful and I think applies to everybody, but this is pretty
labour-intensive stuff and, as the Chairman indicated, there are
a lot of people who come through the system who need simply better
interviewing skills, better job-search skills, and so forth. For
those who do not have social networks, maybe who have troubled
families or drug or alcohol problems, and so forth, language,
no skills, low skills, or have cycled through New Deal two or
three times, this makes a lot of sense, I think.
Q143 Miss Begg: Along with that,
you are involved in the Ambition programme; did you find that
it worked similarly to your Fair Cities strategy, again in working
with employers and looking at skills in a particular sector?
Ms Stratton: Ambition really was
the learning laboratory, if you will, for Fair Cities; it focused
on one or two sectors in a city, I guess in most places it was
one sector, so you had construction in Birmingham, for example.
What Fair Cities tries to do is combine a sector and an area-based
approach in one place, so that you will have, I think, all told,
between the three areas, about 20 pipelines, different pipelines.
Q144 Miss Begg: In Aberdeen, we had
Ambition construction which was delivered through a voluntary
sector organisation which deals with the young homeless and recovering
drug addicts and was very successful locally, but then they were
dismayed to find that the Government funding of the programme
was being pulled. We did manage to get it reinstated. It seemed
to be the argument the DWP was using at the time that while it
may have been quite successful, that particular programme in Aberdeen,
it was not replicated elsewhere?
Ms Stratton: I think Ambition
is mixed. If you look at the energy sector, it was fantastic;
we had really, really high rates. If you look at retail, it is
much less, much less pull; the jobs do not pay much, there is
high turnover. It was our opportunity to learn. We made a ton
of mistakes with Ambition. Do I think conceptually it was right?
Yes. We have just done a new report called Ambition Revisited,
where I think, if you look and compare it with other vocational
training programmes, there is no question it is cost-effective
and it produces better performance. If you compare it with simply
putting somebody through a job search and into a job, it is much
more expensive, so you need to have regard to who it is you are
going to invest in.
Q145 Miss Begg: You said that you
made mistakes, but obviously they are valuable lessons. Do you
see that those lessons are reflected in the way that Jobcentre
Plus is delivering its employment programmes now?
Ms Stratton: I think I can say
today that the best news is that Jobcentre Plus and the LSCs have
just agreed to relaunch Ambition, so I feel that is almost a small
Miss Begg: I know that will delight the
Foyer in Aberdeen.
Q146 Justine Greening: I want to
ask a question on the further education role in all of this. It
is interesting what you said about the Fair Cities strategy, because
on Friday, with a load of women who were enrolled on construction-related
courses at South Thames College, I went along to the Battersea
Power Station site, and there will be quite a big focus on women
in construction happening in that area. It is a very good example,
I think, of recognising that there is a pipeline which needs to
be filled at the end, we will probably have some regeneration
in Roehampton, which, if we can get people from Roehampton to
come up to Battersea, in four years' time they may have spent
two years on the Power Station and then actually can work really
close to home, on their own estate, in fact, regenerating that.
It does seem to me that the further education college has a vital
role to play in this, because they are the sorts of people who
will put the skills in place to help these people go down the
pipeline and come out with a job at the other end. Do you think
that is a fair point to make?
Ms Stratton: I do, and I think
it is the direction in which the FE colleges are going and I think
it will be very interesting to see what comes out of the Leitch
review next year, so I wish I knew more than I did. There still
is a difficulty in you saying FE colleges, in the sense that this
is a really sweeping generalisation, you need to be very, very
careful about it, but, to the degree that you are bound by semesters
or terms, that is not responsive to what employers need and it
is frequently not responsive to what a lone parent needs. If you
are trying to customise both ends of this, there are relatively
few that I would say are demand-led, either demand by the employers
or demand by people who are not your traditional students, and
until the FE college system gets fluxed up or uses their adult
skills money in a slightly different way then I think we will
struggle. I think that one of the most promising parts of all
of this is Train to Gain and I think, as FE colleges become more
skilled and more adept at using Train to Gain or get closer to
employers, they will see ways of responding quickly and well to
the market needs. The more that we can actually tie in New Deal,
get somebody in a job and lock them into Train to Gain, the better
we are, so it is all very promising, but we are not there yet.
Q147 Natascha Engel: When you were
talking about looking at the outcome and then working backwards,
if you were looking at the City Strategy, how successfully do
you think that, given what we are trying to do is get harder to
reach people into employability, as a structure, the City Strategy
is engaging with employers to get people into work?
Ms Stratton: It is very early
days; none of them is operational yet and their business plans
are due in at the end of this year, so we can speculate. Some
of them will be very good because they are employer-led. We are
working particularly with west London, but Birmingham and Sheffield,
and certainly to a lesser extent Tyneside, have employer boards
which are built in so that they are responsible for articulating
their needs and take responsibility also for working on discrimination,
fair recruitment practices, so in those cities which have them
right at the table, I am pretty confident. I do not think necessarily
you have to have an employer board to do this but you do have
to have the mechanisms in place which work with employers, help
them articulate what they want and then connect with the providers.
Shrupti can tell you that one of the real challenges of Fair Cities
is working with providers to make them up their game. We have
a lot of providers who are pretty used to producing somewhat less
than ambitious outcomes for disadvantaged people and it is pretty
labour-intensive stuff to monitor that. Really, it takes people
who are both intimately connected and knowledgeable about employers
and also can then walk over and say to a provider, "Wait
a second; that's not what we agreed. This is the competency; you
don't need the entire qualification, you need three marginals,
if you're going to get somebody into that job, which pays £20,000
Q148 Natascha Engel: Going back to
your point about it depending upon the local labour market and
the local needs, do you think that the City Strategy, as a sort
of blueprint, has got the flexibility to work with the good providers
and ignore the bad providers and work with those employers that
are willing, and it does have that flexibility?
Ms Stratton: I do. I think that
is what is so exciting about it.
Q149 Natascha Engel: What do you
think that means for more rural areas? I know that the City Strategy
is not necessarily just in cities. Certainly where I am is very,
very rural and everything is very, very widespread and you may
have employers who are perfectly willing to engage, but those
people whom we are trying to pull into the labour market are physically
further away from work.
Ms Stratton: I think rural poverty
is one of the most challenging things. In the United States, it
is a really, really big issue. I do not think that employer-led
strategies work particularly well in rural areas. Where there
are concentrations in towns, yes, you can get them in partnership,
but I think it is much more challenging. I think there are different
kinds of areas, like transport and communication, and I think
there are quite different solutions, and I do not have one.
Q150 Natascha Engel: Do you think
that is the point about pilots, and we have been part of lots
of pilot areas, that actually the City Strategy does have the
flexibility to roll out those principles which make them successful
within more dense populations in rural areas?
Ms Stratton: I believe that the
principles which underpin the City Strategy should be charting
the direction for the future of welfare reform. I believe fundamentally
it is right. I think we would be crazy not to do it; we are doing
it as piloting. I think your point about how you apply these in
different contexts, rather than just inner cities, is a really
important one, which we have not dealt with, we have not addressed.
Q151 Natascha Engel: We need a pilot
in my constituency?
Ms Stratton: Yes, we do.
Q152 Natascha Engel: I want to ask
something about the 10 Employer Coalitions, and I quote, "helping
Jobcentre Plus districts to better understand and respond successfully
to their local [labour] markets" back to that point. How
successful have the Employer Coalitions been, and specifically
the role of Jobcentre Plus in delivering those; have you found
that there are very marked differences in the 10 districts or
has there been a kind of uniform pattern?
Ms Stratton: There are; it is
like having 10 personalities, which is not always helpful. They
reflect almost the personality and the culture of the area that
they are in, and what works for Glasgow is not going to work for
Derby; what works in London is totally inappropriate for other
places. I think, by and large, we now have something like a thousand
employers, public and private, involved in the Coalitions. By
and large, there are a few, like in the North East, which have
been very strategic and taken the entire region, and are working
with the LSC and Jobcentre Plus and the RDA on how to engage employers
across the region. Most of them are much more operational and
they are doing some very practical things; they are helping personal
advisers understand what the construction industry, or the retail
industry, needs are and opening those doors, almost being ambassadors
for Jobcentre Plus. In some cases, they are almost like management
advisers to Jobcentre Plus district managers, who find it easier
to talk to some people outside the line, almost like mentoring,
but all of them have been engaged in opening specific pipelines.
They are all focused, right now, particularly on IB clients, so
we have a programme called Able to Work, which in some ways is
using the lessons of Ambition and Fair Cities and saying "What
do we need to do, working with employers and working with IB clients
and working with providers, actually to open up more varied and
better opportunities?" those groups. They do have a national
agenda, that we say there are three or four priorities and then
each one works specifically with their Jobcentre Plus, and increasingly
LSC, partners to say "What do you need from us, particularly?"
Q153 Natascha Engel: I can see not
just that employer engagement but that massive engagement is absolutely
fundamental, because otherwise there is nowhere for those disadvantaged
groups to go when ultimately that is the aim of it. When you look
at the 80% employment rate target and you look at the role of
Jobcentre Plus and that whole kind of employer relationship with
Jobcentre Plus, generally what is your feeling about that; do
you think that Jobcentre Plus, as an organisation, is able to
deliver that 80% employment rate by adequately working together
Ms Stratton: I do not think that
any organisation or agency is going to be able to deliver the
80% alone, but I think Jobcentre Plus plays a pivotal role in
this, they provide the fundamental link between benefit and work.
It is quite clear that Jobcentre Plus, compared with other public
employment services, has an exceptional record in this. As a gateway
to the system, as providing personal advisers, particularly with
groups like lone parents, in helping with just seeing people regularly
and referring to work, I think they do a terrific job. I think
probably they are less good, and I think most Jobcentre Plus staff
would recognise it, in reaching deep into communities, and that
is done best by community organisations. Most of Jobcentre Plus
provision is actually contracted to other organisations. I think
that what they do, by and large, they do well; and most of them
know what they do not do well and contract that out.
Q154 John Penrose: I am getting more
and more concerned, listening to you, not by what you are saying,
the notion of starting with the local job market requirements
and sort of working back from that all sounds very sensible, actually
I am more worried that, as a Committee, we may be asking the wrong
questions. We are trying to go through the data and say is the
Government focusing in the right areas, is it focusing on the
right groups of people, and we are going through and seeing whether
or not Bangladeshi women have a higher unemployment rate than
this group or that group. Also I am trying to work out the relative
importance of multiple labour market disadvantages. I think what
you are saying is that, actually, the most important one is the
local labour market's requirements and it is only sensible to
look at, for example, Bangladeshi women or Afro-Caribbean men
insofar as that is some sort of proxy for a likely mixture of
potential labour market disadvantages encountered by a particular
individual within that community. But it is no more useful than
saying that a particular community is likely to suffer from a
particular set of physical diseases if you are a doctor, you have
still got to make the individual's personal diagnosis and treat
the individual's personal problems. Therefore, if we are starting
to look at the unemployment of a particular ethnic group or a
group of people with a particular sort of incapacity, that is
actually the wrong question to be asking, we should be asking
the question the way you are describing it?
Ms Stratton: I think it is very
helpful; you need to be able to draw some broad conclusions and
have some general information about groups in order to design
programmes, but, in terms of working with people on the ground
and understanding the particulars, I do think customisation is
absolutely critical. You have to understand the needs of each
individual, and that is really what Jobcentre Plus does, at the
initial stage, and personal advisers I think are really important
in that. In a similar way, we have to do a better job of understanding
what employers' needs are, or what they are not doing that they
ought to be doing.
Q155 John Penrose: Therefore, the
local adviser, in your world, should be a local commissioning
person, to pull down the required programmes to deal with that
specific individual's set of disadvantages, rather than, as you
say, becoming a supplier-led thing?
Ms Stratton: I will now speak
for the Panel. I think the Panel would say two things. Local communities
being able to tailor their local programmes is very important;
how many, right now, have the capacity to commission those, and
to make sure, to procure networks better than it does now, that
the standards are right, and so forth, may take a while. I do
not know that we are there yet. What it may be is that there is
an interim point where a City Strategy says to Jobcentre Plus,
or the Department, whoever is commissioning it, "Okay, you're
commissioning this for Birmingham, but when it gets to our IB
clients or ethnic minorities this is the kind of provision we
want, and we want to be sure that the tenders get sent to these
organisations because they have a demonstrated track record in
this in Birmingham."
Q156 Chairman: You mentioned a thousand
employees; roughly, what is their total labour force, do you know?
Ms Stratton: What a good question.
No, I do not, but I will find out and I will send it to you.
Chairman: Thank you.
Q157 Harry Cohen: I want to ask some
more about engaging employers. Your Panel published a report in
May last year: Enterprising People, Enterprising Places.
You said, "after accounting for educational qualifications,
age, gender and location, ethnic minorities are less likely to
be working and less likely to be earning as much as their White
Counterparts." You made some recommendations, which were
accepted by the Government, including a Commission of business
leaders, to advise and assess progress in achieving race equality
in the private sector. This business Commission has been going
for a while; how has it been contributing?
Ms Stratton: It has not been going
for a while; it started in August and it has to produce its report
to the Chancellor in time for the March Budget, which is challenging.
I think it is an important piece of work. It is an outstanding
group of business leaders, for the most part business leaders,
which is looking at a subject which we feel is absolutely crucial
particularly to the issue of ethnic minority employment. There
is no question that ethnic minorities experience disadvantage
in the labour market, and one of the things which is particularly
worrying is that does not change a lot in the second generation.
We have something called the Ethnic Penalty, which I think is
what you are referring to, which is when you factor out skills,
employment, work experience, you still find a penalty, which is
part of the 15% gap. One of the things the business Commission
is trying to do is trying to quantify how much of that can be
attributed to private sector or employer discrimination. We think
it is about 30%, which is substantial; we do not know that. Part
of the business Commission's research will look at that. We are
trying to do four things with the Commission. The first is to
set some national indicators which will help us measure the progress
in private sector recruitment, retention and progression of ethnic
minorities. The second is to look at what kinds of goals we can
set, and we are working here in the context of the City Strategy,
so we picked five cities, they are all City Strategy pathfinders,
to set goals for them, and then to bring some great new area to
this, to say what kinds of strategies and practical measures would
help close this gap, in the construction industry, in finance
and professional services, and so forth. The third area is to
look at what kinds of levers you have got to tackle discrimination,
and those range from the ones that you all know aboutpublic
procurement, positive action, corporate reporting, better advice
and guidance, and so forthand to see if we can figure out
which ones will be the most effective in influencing private sector
behaviour. The last thing will be to recommend, in terms of national
policy, what to change, in terms of what Government can do to
help accelerate progression in the private sector.
Q158 Harry Cohen: That was a very
helpful answer, actually, and very interesting. I will come back
to some of those points. If I may pick you up on one point, about
the 15% gap and you said the thinking was that the private sector
contributed about 30% of that, really I am seeking clarification;
really you are saying that other sectors, the public sector, contributed
70% of that? I find that extraordinary.
Ms Stratton: No, no; sorry.
Q159 Harry Cohen: Clear that up for
Ms Stratton: By employer discrimination
I mean both public employer and private employer; on that one,
I was not making any difference. I do not think we have disaggregated
it. There are other kinds of things, like spatially, if people
live far away from jobs, just by virtue of living in poverty,
and so forth, which relate to that.