Select Committee on Work and Pensions Minutes of Evidence


Examination of Witnesses (Questions 220 - 240)

WEDNESDAY 22 NOVEMBER 2006

MR DAVE SIMMONDS AND MR WAYNE SHAND

  Q220  Chairman: What have we learnt, if anything—and both of you have referred to disadvantaged groups—about what works for those groups?

  Mr Shand: I think the experience certainly in Manchester and a number of other cities is how you start to work with and through local community organisations, how you develop a clear presence within communities that have a number of disadvantages, and how you are able to be flexible and tailor services to the needs of individuals. I think a real challenge, particularly for the local authority sector, is how we get sufficient flexibility at a very local level to be able to bend a mainstream activity to reflect the specific needs and barriers that individuals might face. The city has been running a project with individuals on incapacity benefits for the last three years and we have worked very closely with Jobcentre Plus using neighbourhood renewal funds to try and find ways in which we can supplement mainstream programmes and to ensure that local individuals, particularly those furthest from the labour market, are able to benefit and access and, more importantly, progress from initial contacts where we are helping them build their confidence and motivation through to training and employment support services, where they can be better prepared to compete for work. On the specific issue of ESOL as well, I would like to make one comment on that. I think Manchester is one of those cities where we do have large numbers of economic migrants coming in, as well as large numbers of foreign students, and clearly we have lots of individuals that are soaking up entry level posts and jobs, particularly in customer service industries. I think flexibility and a joint approach between Jobcentre Plus, the local authorities and the Learning and Skills Councils about how ESOL provision is protected and focused in those communities were language is a significant barrier is very important. The overall lesson I think we have learned from our experience is the greater you can be flexible and tailor provisions to those local areas and not try to standardise activity the more successful you are in engaging and taking people through a process.

  Mr Simmonds: There are four key points in terms of what works from our point of view. First of all, increasing the individual employability of disadvantaged groups—and I stress the individual nature of that because every person is different, everybody has different combinations of both pros and cons when it comes to the labour market, so we need a far more individualised system to increase employability. Secondly, increasing the amount of job seeking. If we are not asking people to engage and look at the labour market then they very often will not, and we have seen the consequences of that over the generations with incapacity benefit, where the average duration is over seven years. Thirdly, increasing the financial incentives to work and the level of in-work support and in-work benefits, there is no doubt that the Making Work Pay agenda is absolutely critical and is the key both incentive and disincentive for many disadvantaged groups. Finally, and I think importantly, a new area of policy which needs to be concentrated on is once we get disadvantaged groups into a job it is how we then help them to stay in that job and progress in it. Certainly the performance of many of our programmes have been undermined in the past by high levels of turnover, and it is a greater concentration of helping people stick in work rather than recycle around benefits which is an important new area of policy.

  Mr Shand: A final point, Chairman. Our experience locally is that once you help individuals who have been away from work for a very long time overcome some of the confidence barriers and attitudinal barriers as to what engaging employment support might mean, our experience is that it is very successful, and Stepping Stones, for example, the project we run with Jobcentre Plus, we have engaged and worked with around 3,500 people and by the end of this year we would have helped 2,000 people from IB back into work. What has really surprised us is that once you overcome those initial barriers that people really then go on very fast and it is really worth making that initial investment to overcome the confidence issues to get them involved, because it does work and they do get into employment.

  Q221  Chairman: There will be questions later on about the City Strategies, so I would ask you not to venture into that, but how well do you think Jobcentre Plus and local authorities are working together? Is that element of the local area agreements actually operating? Is it successful everywhere, is it patchy and is the Accord more than just a piece of paper?

  Mr Shand: I think the Accord that was signed in 2003 helped to set the foundation for greater collaboration formally between Jobcentre Plus and local authorities, and certainly through the LGA it has given the opportunity for local authorities to be involved at a strategic level, both the LGA and individual local authorities themselves, in the design and development of the Green Paper and City Strategy that has followed. So I think in terms of the impact of the Accord it has been very useful in that way to get a foot in the door, if you like, but also to ensure that local authorities' views are conveyed as part of the national policy development. I think in terms of the practical relationships between Jobcentre Plus and local authorities it is fair to say that it will vary across the country. I think where you have had a strong relationship over a number of years it is starting to work well, but I think that the issues about the outcome of the local area agreement, Refresh, and the production of the business plans for the City Strategy will really be quite telling about in practice how much change that brings about in terms of different working arrangements between local authorities and Jobcentre Plus.

  Q222  Mrs Humble: Can I explore a little further the effectiveness of the current programme. Can you tell us if you think that there are particular groups that are not well served by the current programme? I am especially interested, David, the comments that you were making about the over 50s because you told us a minute ago that there are more over 50s now going into the labour market, and yet we have been given evidence to suggest that participation in the New Deal for over 50s has gone down. Can you square that circle?

  Mr Simmonds: The employment rate for over 50s is on a very firm upward path. Go back to 2000, the employment rate was about 67%; it now stands at almost 71%. So that is quite a rapid increase, and if we look at that trend then it is going to meet the present national employment rate of 75% at around about 2010-11. So one of the disadvantaged groups will no longer be technically disadvantaged. That is not to say that there are still lots of over 50s who have other disadvantages and will still be unemployed for a range of other reasons, given the multiple barriers and so forth. So, overall, the numbers of over 50s are increasing quite rapidly. When it comes to participation on New Deal for 50 plus you are right that numbers have been going down and, if I remember rightly, the job outcomes do not look too good either, but here we have to look at New Deal 50 Plus that made a relatively small contribution to achieving the increasing trend for over 50s, and what that is saying is that the supply side interventions probably are not so important for the over 50s; rather, it is the demand side pull and employers saying, in part helped by the age discrimination legislation, "We positively want to pull over 50s back into the labour market. Whilst we were busily shedding them we now see this as a pool of labour that is experienced, that knows how to deal with customers, knows what is required within a work place, knows it is important to turn up on time," et cetera. So the overall message we are getting from that is actually it is probably the labour market as a whole and employers adjusting more and actually Government supply side interventions are relatively less important.

  Q223  Mrs Humble: Do you think that Government interventions through New Deal could be important for those people who have been on benefits for a long time, who were furthest away from the labour market, who need to be winkled out of their armchairs, because many of the over 50s who are actively participating may well be people who have given up one job, taken early retirement, for example, and then decided that they want to go back into the labour market and there are new opportunities. So it is the entrepreneurial group you were talking about earlier, who were already active who were getting in there, but what about the hardest to reach people? And should we, for example, be looking at some sort of compulsion for New Deal 50 Plus to get those people who are not having anything to do with the labour market?

  Mr Simmonds: For us that is more of a matter where multiple disadvantaged comes in because those over 50s who remain out of work will inevitably have health problems and will be on IB, and, yes, more support through, for example, Pathways and the Stepping Stones example from Manchester is important. It is not our view at the moment that any greater compulsion is needed around that, and I think we need to get that legislation in; we need to get Pathways working across the whole country before there are any further decisions about further responsibilities. But also there is the issue of low skills. Many of those over 50s who are out of work are classed as having low or no qualifications; that is about when they were at school, it is about how their skills are not recognised within the qualifications framework, and so you bring into question the problem that we have with the actual declining employment rate for those people with no skills. So for us it is more of an issue of looking at how these different disadvantages combine and how you tackle it for the individual, given that there is a multitude of combinations and permutations of the different disadvantages.

  Q224  Mrs Humble: Wayne, I would like your comments on whether you think there are particular groups that are not well served by the existing programme, but I also want to pick up on the comment that you made in answer to a question from the Chair about flexibility within the system, and you talked about initiatives in Manchester and in other parts of the country where there is flexible working between DWP and local authorities. How can that be better improved in order to get those groups of people who are not best served by the existing operation? And who are these groups, as well as the over 50s—or not?

  Mr Shand: I think our experience has been that it took a fairly long time, probably the best part of a year, to get to a point in our relationship with DWP nationally and Jobcentre locally to start to get below the headline statistics. I think what has been really important for us is to be in the position where we can start to understand the dynamics within communities and to segment the market almost. So the approach that we have taken with Jobcentre Plus with our NRF project, but not in the mainstream, one might say, is to set a number of criteria for those people who have been on IB for two years or more, and basically to have a target group within that. In Manchester we have 37,000 people approximately that are on incapacity benefits, and of those, once we take out people with terminal illnesses or very serious disabilities or people who are very close to retirement age, you end up with about 40% of the overall stock, and that is where we have focused our activity. Within that, I think what we have tried to do is to identify both geographical communities but also target groups themselves, which would include the ones we have mentioned—the over 50s, young people on long-term benefits as well as people from minority communities and people with disabilities would be our priority areas for intervention. But in some ways what we have tried to do is to have those as medium-term targets but work below that to focus activities so that there is sufficient volume within communities to try and deal with those areas where you have almost an overbearing concentration of worklessness, which we think is one of the factors that continues to position Manchester as one of the most deprived areas in the country, despite the rapid economic growth that is taking place in the sub-region. Two particular issues which I think are important around the point on flexibility, one is the complexity of existing mainstream services, particularly with JSA, for example, that 18 to 24 year olds have different eligibility criteria from over 25s, so different eligibility criteria from 50 plus, and I think what we would want to see is greater flexibility locally to be able to move the entry points for those services so that we can better reflect the needs of our communities; but also to look at encouraging work across public sector agencies, so particularly on the skills agenda with the LSC and Department of Health and GP practices and the health sector's involvement, and DTI in terms of business support. I think part of the issue in terms of effectiveness for us is about not only how you start to engage and involve individuals in employment support and have a flexible approach at a local level, but also how you have a joined-up approach across government departments to make the most of the resources that are available.

  Mr Simmonds: Can I just add that as far as I talked about the over 50s I did not answer your main question about who is least well served. I think put simply it is those people with multiple disadvantages who are not well served. I am not going to single out a group of people because I think that is almost now missing the point, because whilst the present programmes we have are defined around age groups with a strict eligibility it is still a one-size fits all approach, and whilst that has worked for many people who have one main disadvantage, who are actually highly employable bar one significant barrier, where a one-size fits all type approach might work, and does on a regular basis for many, those who are not well served are those where it is a lot more complicated—different permutations and combinations of disadvantage, as well as geographical disadvantage in terms of where they are living—and our present system is not geared up sufficiently to tackle the hardest cases.

  Q225  Mrs Humble: We are running out of time and I have two questions and I would welcome fairly brief answers. The first question follows on from the issue of complexity because the people who are dealing with that complexity are the personal advisers. Do you think they are up to the job?

  Mr Simmonds: Yes and no. There are some excellent personal advisers and you just have to go and sit with a bunch of them and they are absolutely fantastic, they are doing a great job. However, the overall quality constantly needs improving. As problems and issues change, up-skilling and training of personal advisers is critically important, plus they also need freeing up, and I still do not believe that there is sufficient freedom in the system as a whole to enable personal advisers to take the right decisions for individuals. If you look at the equivalents in Employment Zones, that is where those personal advisers are taking decisions around what individuals can and should do and have a pot of money to help them do that—they have that freedom. But within the Jobcentre Plus personal advisers their hands are tied, so whilst there is a lot of willingness by PAs, a lot of enthusiasm and commitment by a lot of them for their job, I am afraid we are still tending to tie their hands far too much.

  Mr Shand: The very brief answer is that our experience is that the PAs that work with the hardest clients need to be the best PAs and generally need additional training to be able to deal with the complexity of the issues.

  Q226  Mrs Humble: Finally from me, Building on New Deal, why has it not worked? Why has it not worked as well as we wanted it to? The Government reduced the number of pilot areas. What has gone wrong, what should go right, what is the future for BoND?

  Mr Simmonds: We said back in the summer, I think, that BoND should be buried because in effect, from our point of view, BoND has not happened. The key decisions to roll this out have not been taken, we understand because of resource issues. So from that point of view we have to see it as a direct casualty of the tough settlements for DWP and Jobcentre Plus as part of the CSR. We still dispute the fact that it would actually cost more money; we have not seen any conclusive from the Department as to why it should cost more money. Actually I do not think that the Department, from what I have heard, has actually rowed back on the fundamental principles on which BoND is based, and that is introducing far more flexibility into the system, introducing the menu-based approach so that individuals and personal advisers together can pick and choose. So we still hope that those principles are alive and well. How they are introduced in the future, whether or not it is called BoND or something else, we do not particularly care, as long as the system as a whole is progressively freed up in one way or another, and probably BoND as a Green Paper at the end of the day. Part of what we were saying was bury it because that has now gone, let us carry on with the debate and let us look at in 2007 the best way for strengthening the New Deals and introducing more flexibility and ending the one-size fits all.

  Mr Shand: Very quickly to say that I think we would encourage the Department to not proliferate activities of a vaguely similar nature. I think some of the principles of BoND were right but as there has been very little progress we would encourage them to reintroduce those principles as part of the City Strategy Programme.

  Q227  Miss Begg: That leads me very neatly on to the questions on City Strategy because I was going to ask—and I think you have just answered it—whether with City Strategy we might see the son of BoND rising and whether it works. A very simple question to begin with is how well do you think the development of Cities Strategy is going?

  Mr Shand: In some ways it is a bit early to tell. I think the local government sector welcomed the Green Paper and welcomed the introduction of Cities Strategies. I think the local authorities are working very closely together and with DWP to produce business plans. We are being actively encouraged by the Department to be challenging and to identify those things that we think will make a difference. Those will be put within the business plan and it will be submitted by local authorities, local consortiums in December, to DWP. I think one of the concerns we have is that the experience of local authorities through the local PSA Agreements, the local area agreements in our City Strategy, is that lots of things have been asked for and lots of challenges have been made and it has been very difficult to get a positive response back. So I think we welcome the opportunity but we wait to see how effective it is in practice.

  Mr Simmonds: Just briefly, it was John Hutton in launching it who said that he wanted City Strategies to be challenging and it has precisely been that, so it would be foolish to say that everything is going swimmingly because it is a very challenging set of issues that both local areas have, as well as central government in changing how it thinks and behaves. So I would say, relatively speaking, over the time period, over the three or four months since people have really got down to business, that progress has been pretty rapid, relative to the scale of the challenge and relative to what people have to do. As I constantly say, you are told to deliver a one-size fits all solution for 10 years and then you are told to start thinking again and be challenging, and you cannot do that overnight. From our point of view, the areas that we have been working, there have been some fascinating debates and discussions at the local level as to what the local solutions should be to their local problems, and at long last now our local partners are sitting around the table, they are discussing what the problems are, analysing the nature of the problems and identifying what the solutions might be. But let us not kid ourselves that that is not an easy task everywhere, because it is an entrenched problem plus, also, certainly at the local level, a lot of the capacity to analyse and to look at the nature of local labour market failure, to look at all the different funding streams coming into an area, and just to map activity is a vast job in itself. So progress to date, relative to the scale of the challenge, I think has been pretty good.

  Q228  Miss Begg: You touched on the fact that one of the crucial elements of the City Strategy is the ability to pool the funding, so if I can take Manchester as an example, what funding streams have you identified? Are there barriers to proving this? Is there extra flexibility that the Government needs to put in place in order for those funding issues to be brought together? Is it going to be possible to coordinate all of this at a local level and do you have any evidence that the Health Service or some of the other agencies involved are beginning to get very protective of their funding and are therefore putting up unnecessary barriers into bringing all that funding that needs to happen into that single pool?

  Mr Shand: It is a big question but I will try to be brief, Chairman. The work that we have done within Manchester and Greater Manchester is that we have gone through a process of trying to map what resources are available and working on this issue and these client groups and what provision is in place and how that fits or does not to the needs of the people we need to support. To be honest, where we have been more successful is having discussions around non-core budgets and about how they are brought together more effectively. So with the Learning and Skills Council, for example, we have effectively pooled some of the money for local learning in deprived communities with our NRF resources. We are still awaiting the final decision from Government on the Deprived Areas Fund, but it is intended that that money will be pooled alongside other resources. Where we have had success is in those areas which are large or small relatively but are not part of the core service provision, particularly that which Jobcentre Plus offers. What we have tried to do is to manage the relationships locally and nationally, so where departments are reluctant or not in a position to pool resources to at least align them, so we have a very clear set of goals and objectives and any positioning activity is aligned so that they all fit together as best they can. I think there is a certain institutional resistance from the departments to let go of responsibility for some of their areas so I do not think we are quite there yet in terms of it, but I think certainly the challenge for City Strategy going forward is to demonstrate that we can achieve additional impact from those areas where we do work together and pool resources. I think in terms of health it is not an issue that we have made a huge amount of progress in. We have as part of our plans closer working with GPs and to ensure that we have sufficient capacity within the condition management programme, so that we can help those people who have chronic long-term issues to manage pain or manage their health conditions, but to put support in place where it does not prevent them going back into work. It is early days and it is a bit of a mixed message, but I think there is a certain pull against pooling resources themselves.

  Q229  Miss Begg: Can you see yourselves at some stage, if the blocks are there that you need to unblock to deliver a City Strategy, knocking on Government's door and saying, "You are going to have to come in and help us here," or do you think that the solutions will largely be at a local level?

  Mr Shand: No, I think, again very bluntly to keep it short, that unless the Government departments release grip and allow greater local delegation to this then City Strategy probably will not work. You will be able to deal with the peripheral funding issues around the edges of core, but unless you fundamentally change the approach of how national programmes are delivered and commissioned then City Strategy will not work.

  Q230  Miss Begg: Do you have any evidence that things are changing?

  Mr Shand: We are optimistic. As we say, the process of producing the business plan is going to be the telling point.

  Q231  Miss Begg: Obviously as the plans have to be submitted in December, is it too early to give us any timescale of when we will start to see City Strategies work on the ground; that there will be some impact on the individuals that will be affected by City Strategy?

  Mr Shand: We have been running, using our own resources, a programme called the Core of City Strategy for two and a half years now in Manchester. I think that in a small way it has demonstrated that it works if we can engage the right people and support them. We have set ourselves very stretching targets for Manchester and tried to get 12,500 people off long-term benefits into work over the next three to four years, and we would know by the middle or the end of next year about how effective both the management and administration of City Strategy has been and the buy-in of Government, but also the real impact that it is having within our communities.

  Q232  Miss Begg: We visited Glasgow a couple of weeks ago. They conducted a mapping exercise to find out exactly where the provision was across the city and have set up a programme called the Equal Access and Full Employment Areas Initiative specifically to fill the gaps in provision. Have other cities done something similar? Have they got a separate body that is there to fill the provision or how have other cities tackled that to make sure it is covering all aspects of employment in the city?

  Mr Shand: I think most of the pilot areas of the City Strategy, and there are 15 nationally, are engaging in the process of trying to do that sort of mapping exercise. We have done it in Manchester. We established a skills board two years ago to try and bring the strategic commissioning and delivering agencies together to do exactly that. The intent was to make sure that, particularly in the vocational, training and educational sector, any provision that is being put in place is specifically aligned to the requirements that employers have and to use the resources as effectively as they can, but Dave might have a view on the rest of the authorities.

  Mr Simmonds: I think you can go to every single local authority in our cities and point to a local initiative that is being taken and funded somehow, quite simply because there is that local recognition that more is needed over and above what is being provided through the mainstream programmes, either in terms of improving the performance of those mainstream programmes or reaching out to groups which those mainstream programmes were not designed for outside the eligibility criteria. That action is happening all of the time in our major cities, and the important thing is that, through the City Strategy crisis cities have now got the opportunity to build on those initiatives that they have been running for some years, like the Jets or the one-stop shops in Liverpool and those equivalents in Southwark and so forth, you can point to all of those. However, I would reinforce Wayne's point that city strategies will not be as effective as they can or should be if they are just marginalised to what is called the "funny money" at the edges. It is the performance of the mainstream programmes that needs to be improved, and that is the critical step which City Strategies can and should be taking, and so seeing those mainstream programmes, both in LSC and Jobcentre Pluses, within the City Strategy pot is incredibly important.

  Q233  Miss Begg: One of the other things we have seen in Glasgow, and it is a criticism that we as a Committee have heard before, is that a lot of the services tend to cluster around job search and usually those closest to the labour market and there are not the resources put in to either bring the people who are furthest away from the labour market closer to the labour market or, indeed, to sustain people in work once they get a job. Is that something that exists everywhere, is it just in Glasgow, or is it often the way that New Deal works as well?

  Mr Shand: There is a gap at that end, and I think that is where we have concentrated some of the effort for our Neighbourhood Renewal Fund. There is a principle. Certainly we have tried to set out, within our City Strategy, a proposal about how Government needs to think differently about resourcing in the future. I think, broadly, we would think, certainly in Manchester, that in total, for the whole public sector, there is probably enough resource there to do the job, but we need to be more flexible about how we use it and more intelligent about how that is commissioned and applied. If we can get that working properly, there is probably enough core resource there to get where we want to get. However, I think there is an issue going forward, particularly with NRF finishing at the end of next year, that there will be a gap with regard to those people that are furthest away from the labour market. Certainly one of the principles that we have tried to articulate to Government is that, by getting thousands of people off of benefits into work, there are huge savings to be made in terms of benefit payments, there are huge benefits to the Exchequer in terms of tax revenue as well as local economic impact, and one of the principles that sits within this is about how Government recycles some of that resource to make sure that there is sufficient capacity at a local level to continue to do that engagement work.

  Mr Simmonds: I should flag up the concern around the future of the European Social Fund and the Equal Programme, which, of course, is on a rapidly declining route. Many of the additional programmes that we have been talking about, and you have looked at, are probably, one way or another, supported through the ESF, and the withdrawal of that cash progressively over coming years is of grave concern at a local level. Again, from our point of view, that just points in the direction of the critical importance of freeing up the mainstream so that it is better able to fund those local priorities and the range of different services that are needed. At the moment I would say that we are too channelled down the main core services. Actually, the point that we are constantly trying to get over with the 80% is that you cannot hit the 80% without acting on a wide range of fronts, which means a wide range of services and, in some cases, new services, specifically in terms of the in-work support for disadvantaged groups.

  Q234  Miss Begg: A lot of that is to do with the supply side. We took evidence as a Committee from Cay Stratton on Monday, who said that employer involvement is crucial, and in fact the model which she presented was quite different from the one that we have heard most about this morning, which was that you would engage with the employers first to see what skills, what jobs they had available and then look after your supply of pooled labour and make sure that the programmes, the employment programmed and the work share programmes developed the skills around the jobs that were there that were going to be available to them. To what extent do City Strategies (and it may be different across different cities, I realise) set out with the precise intention of involving employers at a very early stage in the planning and the strategic development of services?

  Mr Shand: Certainly for the Greater Manchester City Strategy, employers have been involved from the very outset. The Employers' Coalition is a member of the consortium. We are currently working with the National Employer Panel in running projects focused particularly on employment for BME communities in Manchester, and we have quite a mature group of sector networks where we try to use some of the intelligence that comes out of those to make sure that certainly the work that we do for the schools' board is specifically picking up on the requirement that employers have. As part of our work going forward, I think we have tried to concentrate on two areas with regard to employers. One is how we prevent large numbers of people falling out of work and into long-term benefits and provide particularly SMEs with the sort of support that they need to manage chronic illness or sickness in the workplace without those individuals then falling into Statutory Sick Pay and then potentially on to incapacity benefits and then getting trapped in that loop. We are aiming to work with the Health and Safety Executive nationally to try and see if we can build capacity in that area. The second area is the point around brokerage—it is about that interface between the individual and the employer—and we have run some activity over the last couple of years that has tried to broker that relationship and present individuals to employers. I think we have learned a number of lessons from that and I think that, as we go forward, what we are looking to do is to both provide the support for the individual to present themselves to the best effect, particularly when they are competing with other people that will have a better track record in employment than they will, but also to make sure that the employers are aware of the support and advantages in taking people from the register.

  Q235  Miss Begg: Is it easy for employers to know where to go for that help? Is there a one-stop shop for them? Again, in Glasgow—and I have taken a knowledge of what happens in Aberdeen—various providers go out to the employers and so a single employer might be approached by a number of different job brokers, or whoever, seeing whether they will place some of their clients, rather than it being a single body that the employer can come to and say, "I need somebody with these skills", and then it is divided out to whoever it is that can supply the individual with those skills.

  Mr Shand: Certainly, in our case, not at the moment. We have got the LSC, the colleges, Jobcentre Plus and other projects that are all approaching employers and one of the aims is to streamline that. We need to be aware as well that employers will not just work through one route. As well as trying to do what we can to capture some of the jobs and present individuals to employers in the best way that we can, we also need to make sure that the individuals themselves are competitive and are able to compete on their own terms with others that are also going for jobs.

  Q236  Miss Begg: Professor Ivan Turok argued that there is a basic choice to be made between a decentralised approach or a more closely planned and co-ordinated city level framework. Which do you think should be pursued?

  Mr Simmonds: Certainly we see that the fundamental building block of a city strategy is the ability for local partners, both policy-makers and politicians and the different government agencies, to come to a strategy which is based on a firm, sound understanding of their local labour market, where the local labour market failures are and what needs fixing to increase their employment rate and to tackle the entrenched worklessness in some of their areas. In that way, it is more likely to be the case that the solutions that are put in place will actually be the right solutions for those local problems, but that does mean that local partners do have to approach the job in the first place by a very sound analysis, by sharing local labour market information, and that means Jobcentre Plus and LSC actually sharing data and their understanding of the local labour market so that we are pooling together all these different perspectives of how the local labour market is working, and that includes employers as well. Certainly, from our point of view, we think that the increased performance that City Strategies can bring will be precisely because they are better at identifying what the problem is and therefore what the fix is.

  Mr Shand: Briefly to add to that, to some extent it does not matter. At the end of the day what we need is a responsive local system that meets the needs of the people that we want to support. If we have got either devolved government arrangements or we have got a more flexible and responsive national system, either way it works, as long as we get the outcome that we need at the end.

  Q237  Miss Begg: In that case, how should the success of the added value that City Strategies will have be measured?

  Mr Shand: I think its impact in those communities that we want to serve.

  Q238  Michael Foster: Do you have a view as to the relative advantages and benefits of employment services being delivered by Jobcentre Plus as opposed to the private and voluntary sector?

  Mr Simmonds: We are constantly looking at who can best provide the most effective performance, and the answer to that, over the years, will probably change. We certainly do not have a dogmatic, ideological view that one group of providers is automatically better than another group of providers or better than a large national agency. Certainly we do believe that it was the right decision to strengthen the Employment Service at the time in 1997 to enable it to run the New Deal, because that was the only way in which you were going to get off the ground what actually was a massive exercise, and the Employment Service successfully delivered that; but we are now living in a different labour market, we are living in a different society insofar as people's expectations of public services are, quite properly, increasing and it is about how those services are individualised, which is all taking us in the direction that probably the delivery of employability support is best delivered through the private and voluntary sector; and we will always lump private and voluntary sector together because, again, we see some very strong pros and cons within the provider sector in terms of what they can bring but similarly for the voluntary and community sector as well. I think the secret is how you get the system as a whole working together and the best set of providers at a local level. Again, I would say that the best people to judge on that are those people at the local level with sufficient control over the funding pot so that they can commission the right sorts of organisations to deliver that performance gain, because at the end of the day that is what we are talking about. We are looking at where we get that performance gain for the most disadvantaged in society, and if the private and voluntary sector can deliver that, then we are for that.

  Mr Shand: I think, generally, we would agree with that position. One of the issues that could become an obstacle is overcomplicating things. I think the experience has been that, as Government has trialled different approaches to delivery of services, arrangements for contracting or different target sets that do not fit together just make it harder to deliver locally. So, I would agree, generally, that we want the best quality and capacity of services locally to do the job, regardless of which sector it is from, but there needs to be a very clear structure about how that is commissioned and delivered so that we do not spend as much money on the administration as we do on services delivery.

  Q239  Michael Foster: We have had comparable evidence, I suppose, by the way we have gone to talk in particular to voluntary sector organisations and their clients, that they welcome not just the individuality of the programme but the ethos and the confidence that they can build with non-state employee programmes. Is that something which is important or do you have any comment or evidence to suggest that that is the case: because, in fairness, I do not believe that we as a Committee have had the opportunity to talk to those same clients who have been serviced by Jobcentre Plus to the same extent in any event?

  Mr Shand: Our practical experience on the ground is that voluntary and community organisations can be very powerful advocates in communities that maybe feel distant from local authority bodies or other mainstream institutions. Certainly, as we go forward with our City Strategy, what we are currently working on is a new formalised arrangement with voluntary and sector community groups to try and help them to take the message out to the people that their working with most closely, and I think that is the key part of this, particularly if we are going to get the volumes of people through into the City Strategy and on to work that we need to hit the target.

  Q240  Chairman: Thank you very much. It has been a long session, but a very important one. You can read about yourselves in our report!

  Mr Simmonds: Thank you.

  Mr Shand: Thank you.





 
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