Conclusions and recommendations
1. We
welcome the setting of an employment rate aspiration and the DWP's
commitment to making sure everyone has the opportunity to work.
(Paragraph 17)
2. We recommend that
the DWP produce a clear list of the groups which it thinks should
not be expected to work, together with estimates for the percentage
of the UK's working age population which fall into each of the
groups it has identified. We recommend that it should then take
the percentage of the population which remain as its long-term
employment rate aspiration. (Paragraph 22)
3. We therefore recommend
that the DWP publish employment rate measures relating both to
the ILO definition and to those who work for 16 hours a week or
more. (Paragraph 23)
4. The measure of
the working age population should continue to start from the school
leaving age, whatever that may be. The issue of NEETs aged 16-18
will remain a crucial one, and we note that DfES publishes a measure
of the numbers of people aged 16 to 18 in employment or training.
(Paragraph 35)
5. However, for the
sake of clarity, we recommend that the DWP retain the link between
the employment rate and the SPA. The measure should, of course,
change in future in line with planned increases in SPA. (Paragraph
37)
6. We recommend that
the DWP agree a PSA target of increasing the proportion of people
over State Pension age who work. (Paragraph 39)
7. We conclude that
an employment statistic expressed in terms of a percentage, but
which does not actually represent the proportion of any single
group which is in employment, would be misleading. The measure
used by the DWP to track progress towards the employment rate
aspiration should be a rate and not a ratio. (Paragraph 42)
8. As we have explained
above, we think that the figure of 80% needs to be more firmly
grounded by an explanation of who is expected to be within the
remaining 20%. If the DWP is going to take the employment aspiration
seriously, then it ought to include it within its PSA targets
arising from the next Comprehensive Spending Review. This could
be done by agreeing more ambitious targets for raising the employment
rate than the current PSA target (Paragraph 43)
9. We have recommended
above the way in which we think the employment rate aspiration
should be calculated. In setting a new PSA target for the employment
of disadvantaged groups, we recommend the DWP make clear how far
achieving the sub-targets will take it towards its employment
rate aspiration. The DWP should specify the timeframe within which
it wants to achieve the targets which it has set for the employment
rates of disadvantaged groups, and, based on this, the timeframe
within which it hopes to achieve the employment rate aspiration.
(Paragraph 46)
10. The Committee
is concerned that, apparently, no progress has been made in piloting
BoND and concludes that there is a lack of clarity in the information
the DWP has provided on what has happened to the programme and
the extent to which delays were the result of resource constraints.
We ask for an explanation in response to this report. (Paragraph
73)
11. We welcome the
agreement to pilot re-using benefit savings as part of Pathways,
and recommend that the DWP continue to press the Treasury to allow
further pilots of this in the Cities Strategy. We consider that
the ability to re-use benefit savings will encourage the DWP to
innovate, and consider that, if successful, it should be introduced
across the DWP's employment programmes in future. (Paragraph 74)
12. Evidence to this
inquiry has led us to conclude that there would be clear advantages
in allowing greater flexibility in employment programmes to respond
to individual needs and local labour market conditions. We recommend
that the DWP pilot BoND, or a programme based on the same principles,
as soon as possible, and also incorporate those principles into
the Cities Strategy. (Paragraph 77)
13. The demand-led
approach exemplified by Ambition and Fair Cities is promising,
but resource-intensive. We welcome the news that Ambition is to
be relaunched, and recommend that the DWP consider extending the
Fair Cities programme to more areas. We recommend that the DWP
explain in detail how it will incorporate lessons learned from
these two programmes into other initiatives, such as the Cities
Strategy. (Paragraph 101)
14. We recommend that
the DWP should use a new definition of sustainable employment
of 26 weeks, both in its targets for Jobcentre Plus and contracted-out
provision. We also recommend that the Government liaise with employers
organisations to promote sustainable employment. (Paragraph 109)
15. We recommend that
the Government liaise with employers' organisations to promote
take-up of the Skills Pledge. It should set out a timetable for
assessing delivery on the pledge. We also note with interest Lord
Leitch's proposal that the introduction of a statutory entitlement
to workplace training at Level 2, in consultation with employers
and unions, should be considered following a review in 2010 of
progress in employer delivery. We intend to monitor developments
and revisit the issue if necessary. (Paragraph 119)
16. The Leitch report
sets out a compelling argument for an overhaul of the UK's skills
strategy. Better skills provision is essential if the DWP is to
achieve its employment rate aspiration; increasing workplace training,
and the relevance of qualifications to the needs of employers,
will improve in-work advancement and make an important contribution
to job sustainability and retention. We are concerned that, as
yet, there has been no commitment to financing the implementation
of Lord Leitch's proposals. The Government should be prepared
to make a significant early investment in skills provision, in
order to reap these rewards. (Paragraph 123)
17. The DWP should
clarify in what ways the benefit entitlements of people out of
work who use Learner Accounts will be affected and what particular
impact such participation will have on the job search obligations
of those who claim Jobseeker's Allowance. (Paragraph 129)
18. The DWP should
consider the interaction between basic skills training and short-term
job placements, and set this out clearly in its response to this
report. (Paragraph 130)
19. Accepting that
the issue of what effect migrant labour may have on the UK labour
market is a complex one, we conclude urgent, up-to-date, high
quality independent research is required. This research should
consider the impact of different groups of migrants, particularly
those with high and low skills, in different local employment
markets in the UK. Such research should be published. (Paragraph
137)
20. We recommend
that the Government include, in its response to the Leitch review,
details of how the transition from out-of-work to in-work skills
support can be facilitated and how such an approach will be reflected
in job entry and learning outcome performance targets. (Paragraph
141)
21. We recommend that
the ESC have within its remit a requirement to continue the employer-led
work which the NEP has carried out in order to improve the employment
chances of people from ethnic minorities and other disadvantaged
groups. (Paragraph 142)
22. Centralisation
of procurement may reduce the extent to which Cities Strategy
consortia can make locally appropriate decisions. We recommend
that the DWP make clear how consortia will be able to "influence"
procurement decisions, and ensure that they have a significant
role in choosing providers. Consortia should be able to control
at least some funds directly; [for example, their allocation from
the Deprived Areas Fund as recommended below in Chapter 9]. (Paragraph
178)
23. We recommend that
DWP publish the full list of flexibilities requested by the 15
Cities Strategy pathfinder areas, as it has published the initial
Expressions of Interest. If it has decided not to grant any of
the requested flexibilities, it should explain why. (Paragraph
185)
24. Unless the Cities
Strategies are able to make use of core budgets from organisations
such as Jobcentre Plus and the LSC, and make significant alterations
to the way in which services are delivered, it is doubtful whether
they will be able to achieve as much as the DWP hopes. We recommend
that DWP clarify as soon as possible what budget and programme
flexibilities will be available to the Cities Strategies. We recommend
that it be bold in allowing local consortia to make real changes
in order to tackle worklessness and social exclusion in cities.
(Paragraph 186)
25. We recommend that
the DWP's next set of PSA targets include a clearer target for
increasing the employment rate of people over 50, as a stepping
stone clearly linked to the achievement of the employment rate
aspiration. (Paragraph 193)
26. We recommend that
the DWP publish data on whether those employment programmes available
to over 50s and under 50s are working equally well for both age
groups, and this should be done at least yearly. Area based initiatives,
including the Cities Strategy pilots, should be included in this
data. The DWP should more explicitly monitor the participation
of people over 50 in skills training programmes. (Paragraph 203)
27. As recommended
in Chapter 3, the DWP should move towards a flexible New Deal
along the lines of the Building on the New Deal proposals, and
pilots of this programme should include people over 50. Allowing
older people to become distanced from the labour market, and come
to think of themselves as "early retired", is a loss
to the economy, limits the choices of older people and increases
their risk of poverty. We recommend that the DWP move towards
making New Deal support available for this age group as soon as
benefit is claimed. (Paragraph 209)
28. We recommend that
the Government monitor, through the new CEHR or directly, the
effectiveness of age discrimination legislation. (Paragraph 217)
29. We welcome the
Government's initiative on outlawing age discrimination, but we
remain concerned that it still leaves people over 65 without adequate
protection. Given that the State Pension age is due to rise steadily
in future, and that there is a consensus in favour of making retirement
a process rather than a cliff-edge event, we recommend that the
Government reconsider its decision not to address this issue until
2011. (Paragraph 221)
30. We conclude that
Jobcentre Plus needs to do more to successfully engage harder
to reach lone parents. The further increase in the frequency
of WFIs announced in the Pre-Budget Report 2006 may not be an
effective use of Jobcentre Plus advisers' time and may undermine
the quality of the provision that is already there, making it
more difficult effectively to engage disadvantaged lone parents
in preparing for paid work. We recommend that DWP monitor carefully
the success of the implementation of this measure. (Paragraph
248)
31. The Committee
welcomes the introduction of the Work Related Activity Premium,
which appears to be a sensible way of engaging lone parents to
prepare for work. We have received evidence, however, that targeting
it at lone parents with secondary school age children may not
be the most effective use of the programme, and we conclude that
the DWP should consider making it available to lone parents with
children of all ages on an opt-in basis. (Paragraph 249)
32. We recommend that,
in its evaluation of the WRAP, the DWP should attempt to quantify
the effectiveness of the quarterly work-focused interviews which
accompany the WRAP payments. Particular attention should also
be paid to whether the six months allowed is long enough to engage
disadvantaged lone parents. (Paragraph 250)
33. We conclude that
it is essential to ensure good links between voluntary and community
organisations and Jobcentre Plus and the Learning and Skills Council
to help engage lone parents with Jobcentre Plus provision. (Paragraph
251)
34. We recommend that
Personal Advisers be given greater discretion over further benefit
extensions. (Paragraph 256)
35. We recommend that
the Government ensure that lone parents receive advice on their
existing employment rights. The Committee welcomes the piloting,
in the New Deal Plus for Lone Parents, of measures which offer
increased support for lone parents preparing for and moving into
paid work. We recommend that a commitment be made in the Comprehensive
Spending Review to roll out the effective elements of this nationwide,
either as New Deal Plus for Lone Parents or as part of a more
flexible Building on the New Deal programme, as recommended in
Chapter 3. (Paragraph 258)
36. We conclude that
the performance of Jobcentre Plus and the New Deals in London
will need to improve if the DWP is to have a chance of achieving
its 70% lone parent employment target. Lone parents and other
groups with low employment rates face particular barriers to work
in London, including a lack of affordable childcare and high housing
costs. We also recommend that the Government should examine the
take-up rate of the childcare element of Working Tax Credit in
London. (Paragraph 269)
37. We will follow
with interest the evaluation of Employment Zones, and the development
of the Cities Strategy pilots in London. We recommend that the
DWP also consider offering enhanced incentives to work to lone
parents in London, and ask it to set out how it intends to improve
its performance in helping lone parents in London overcome the
particular difficulties they face. As we have already recommended,
the DWP should move towards a more flexible menu of provision
for all. (Paragraph 270)
38. Because the allocation
of DAF funding has been delayed, we recommend that areas should
be allowed to roll this year's allocation over into the next financial
year, rather than being required to spend it by the end of the
current financial year. (Paragraph 278)
39. We hope that the
end of the Ethnic Minority Outreach programme does not demonstrate
a reduced commitment on the part of the DWP to improving employment
opportunities for this group. (Paragraph 280)
40. Evidence suggests
that the Ethnic Minority Outreach programme was working well at
improving employment opportunities for people from ethnic minorities,
using small local organisations. Since this is to be replaced
by the Deprived Areas Fund, we will want to see evidence that
organisations contracted to administer the Deprived Areas Fund
are working with small local groups to reach the same clientele
as the Ethnic Minority Outreach programme did. It is important
that the focus on offering employment services to people from
ethnic minorities should not be lost, either in Cities Strategy
areas or other areas. We recommend that Cities Strategy consortia,
or, in those areas receiving DAF which are not Cities Strategy
pathfinder areas, Jobcentre Plus District Managers be given control
of DAF funding, so that they can contract directly with local
organisations, instead of having to go through centralised procurement.
(Paragraph 281)
41. We expect to see
that those of the 15 Cities Strategy pilot areas which have significant
ethnic minority populations have given a high priority to addressing
ethnic minority unemployment in their plans; the DWP should monitor
this, and report back to the Committee on this point in six and
twelve months' time. The Department should also, in its response
to this report, set out its plans to ensure that the focus of,
and lessons learned from, the EMO are taken forward outside the
Cities Strategy areas. (Paragraph 283)
42. We recommend that
a higher priority be given to making ESOL training available to
those people from ethnic minorities for whom it would increase
their chances of finding work, and that the Government monitor
the success of this provision. (Paragraph 292)
43. We conclude that
the DWP and the DTI should work with businesses to promote the
advantages of a diverse workforce, and to encourage them to review
their recruitment policies to ensure that they offer equal opportunities.
The Government should also charge the new CEHR with providing
clear guidance to employers on their responsibilities. (Paragraph
301)
44. As well as working
to improve the employment of people from ethnic minorities, we
think Jobcentre Plus should promote self-employment as an option
to people from these groups. (Paragraph 302)
45. We recommend that
the DWP publish an updated strategy, underpinned by evidence of
the costs and effectiveness of its proposals, setting out how
it plans to reduce discrimination of all types. (Paragraph 306)
46. The Government
should make clear in what circumstances it would consider extending
to the private sector the duty to promote racial equality. (Paragraph
307)
47. We recommend that
the DWP ensure that its own procurement sets an example to other
public bodies in setting high standards for equal opportunities
policies in the firms with which it contracts. Promoting racial
equality should be one of the priorities of the new "centre
of excellence" in procurement. We recommend that if public
procurement proves to be a useful tool in improving racial equality,
all public bodies should adopt a similar approach to procurement.
We also recommend that the DWP set out what "further"
approaches it would consider to promote racial equality. (Paragraph
315)
48. If the DWP is
to obtain the best value from PVS providers, it needs clear evidence
on their comparative performance levels in different fields. We
recommend that the DWP continue with its assessments of the relative
performance of PVS providers and Jobcentre Plus, and provide us
with details of their findings. (Paragraph 329)
49. We repeat our
previous recommendation that DWP needs to "consider carefully
how best to progress with [outcome-based] funding to ensure that
all providers - private and voluntary sector - do not skew their
focus towards helping into work those who are already closer to
the labour market". Providers for all groups should receive
payments that recognise the ongoing support needed, not only to
move a person into work, but also to ensure that their jobs are
sustained. The need for the system to be improved to reflect
these objectives is becoming more acute as the level of private
and voluntary sector provision increases. (Paragraph 334)
50. Prime contractors
must not be allowed to become sole contractors, or valuable local
expertise will be lost, reducing the opportunities to engage with
those far from the labour market. We recommend that the DWP should
publish data on how many organisations prime contractors are,
in fact, contracting with, and the value of these contracts. We
also recommend that the DWP should clarify what its response would
be if a prime contractor was found to be consistently underperforming.
(Paragraph 338)
51. Given the importance
of welfare to work policy, we are concerned at the lack of clarity
around the timetable for the review (which is not mentioned in
the press notice) and the fact that there seem to be no formal
consultation arrangements. Such a crucial process must not be
rushed and should be - and be seen to be - transparent and actively
engaging all those who have an interest. We expect DWP to ensure
that this takes place. (Paragraph 342)
52. We recommend that
any changes to the system of benefits for lone parents take account
of the fact that paid work may not be the best option for a lone
parent, even if they have children of secondary school age. There
may be a range of reasons why a lone parent does not wish to work.
We recommend that the DWP concentrate its efforts on providing
better support for the majority of lone parents who do want to
work, as discussed in the chapter on lone parents above. (Paragraph
345)
53. We recommend that
the Government continue to improve the provision of suitable,
affordable childcare in all areas, which will be essential in
order to improve the ability of lone parents to enter and keep
paid work. (Paragraph 346)
54. We conclude that
the effects of complex benefits are potentially significant, and
we intend to inquire into benefit simplification in the near future.
(Paragraph 347)
| 
