Select Committee on Work and Pensions Minutes of Evidence


Examination of Witnesses (Questions 140 - 159)

MONDAY 20 NOVEMBER 2006

MS CAY STRATTON CBE AND MS SHRUPTI SHAH

  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 triumph.

  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 a year."

  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 with employers?

  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 about—public procurement, positive action, corporate reporting, better advice and guidance, and so forth—and 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 me, please?

  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.


 
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