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28 Nov 2007 : Column 85WH—continued

10.48 am

The Parliamentary Under-Secretary of State for Innovation, Universities and Skills (Mr. David Lammy): I am pleased to be here this morning, which is my first opportunity as Skills Minister to speak in an Adjournment debate under your chairmanship, Mr. Cook. I thank my hon. Friend the Member for Barnsley, Central (Mr. Illsley) for initiating this important debate. I also thank my hon. Friends the Members for Barnsley, West and Penistone (Mr. Clapham), for Barnsley, East and Mexborough (Jeff Ennis) and for Sheffield, Hillsborough (Ms Smith), and my right hon. Friend the Member for Rotherham (Mr. MacShane), who was present earlier. I am pleased that there has been a shared commitment this morning among all parties to this important agenda.

My hon. Friends know that, over the years, great solidarity was forged in our party between MPs representing constituencies such as mine, which is very different from those in Yorkshire, but which shared the high unemployment that blighted the lives of our young people. Many of us came into the movement because of what was happening, particularly in former coal mining areas. I was therefore pleased that one of my first major visits as Skills Minister was to South Yorkshire, where I spoke to employers and providers to get a sense of what is happening on the ground. I was particularly pleased to speak to people at the Forgemasters site in the constituency of my right hon. Friend the Member for Sheffield, Central (Mr. Caborn). Just a few years ago, the business had almost gone bust, but it has now brought on apprentices, who not only work alongside much older colleagues, but provide for the future, and they are seeing the business prosper. The company is therefore leading the way and showing what more we want to see in the region.

Hon. Members will be aware that much of my Department is also based in Sheffield, while the Sector Skills Development Agency is based in Wath upon Dearne, and I have visited both. Hon. Members will therefore see that the issue is close to the Department’s heart, and there is no way that it can slip off the agenda.

Not all Ministers can say this, but I hope to indicate that the spending review has been a good one for the sector. On 16 November, the Secretary of State announced the sector’s funding settlement for the coming period. It was a good settlement for post-16 learning and skills and will allow us to increase investment to about £12.4 billion up to 2010-11, compared with only £6.5 billion previously. I am particularly pleased that that will allow us to increase funding for adult participation by 17 per cent. over that period.

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One realises just how important such funding is when one speaks to people about their concerns in sectors of the economy where people could currently almost be fully employed without qualifications. They recognise that jobs will not always be there for people who lack qualifications and that such jobs will go overseas, and they want the Government to assist them to gain qualifications.

It is important to mention the work that our union learning reps do on the shop floor, nudging, cajoling and encouraging people in their 40s, 50s and 60s to take up opportunities to acquire basic skills and level 2 qualifications. Those reps are acting in solidarity with people and preparing them for the changing economy, and that will help us to get South Yorkshire back to a position in which employment is beyond the national average.

It is also important to mention the huge capital investment that is going into the further education sector and to recall that the Government expenditure earmarked for FE was zero in 1997—it is now just under £500 million. It is important to appreciate that further education has moved on and can probably no longer be described as the Cinderella sector, as it was when many of the working-class young people whom we particularly want to flourish were unable to get funding.

Achievement records are up by 20 per cent. Post-16 participation in FE is higher than it has ever been. The number of adult learners now totals more than 3 million a year. Some 1.8 million people have gained the skills for life qualifications that we want them to have. Unfortunately, we will not be able to read about skills for life in our newspapers, but they are about more than the capital investment that I mentioned; they are about people being able to read to their grandchildren, to apply for jobs and to have the literacy that many missed out on in schools that were previously failing.

Since 2001, 16 large-scale further education capital projects have been approved in South Yorkshire, with £241 million coming from the Learning and Skills Council’s grant support. Barnsley college is benefiting from a redeveloped campus, with a new science and technology block, workshops and a sports hall.

Our continued refocusing of funding will enable us to target funding at the provision that is needed most by people in areas such as South Yorkshire. It allows us to subsidise courses, and it is important for people to recognise that there are subsidised courses in their name that offer level 2 GCSEs and national vocational qualifications and that there is a part subsidy at level 3 and A-level. People should take those courses, whether in the form of work-based learning or at local colleges.

Many colleagues have talked about the changes to the machinery of government. A letter will shortly be sent out explaining the shared principles that underpin the 16-to-19 and post-19 systems. My hon. Friend the Member for Barnsley, East and Mexborough argued for funding that follows the learner, and the provision will be transparent and accountable, focusing on quality and the learning experience. We need to ensure that there is coherent funding across the 16-to-19 and 19-plus systems and to recognise the many local authorities that can serve one college. That will be followed in the new year by wide-ranging consultation on our proposals, and I can reassure
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colleges in the area that they will be consulted. We are listening to them and hearing some of their concerns, and we are determined to get things right.

It is important to recognise that funding for the 14 FE colleges and providers in South Yorkshire has increased by £5.6 million. There has been a 23 per cent. increase in adult participation in level 2 courses in South Yorkshire. Barnsley, in particular, has seen a 45 per cent. increase over the same period. South Yorkshire has also seen an increase of just under 10 per cent. in 16-to-18 FE funding. Money is therefore going in and there is progress, and we need to build on that.

On the colleges that were mentioned, we recognise the excellent quality of existing provision at Northern college. It has not been excluded from the LSC commissioning process, and the LSC is working with it to deliver provision alongside its priorities. The foundation learning tier will be rolled out, providing progression pathways at level 2. The LSC statement of priorities shows that our commitment to Northern college is sincere, and we will work with it to ensure that it benefits.

My right hon. Friend the Member for Rotherham is not in his seat, but I should also mention the great success of Rotherham college of arts and technology and Thomas Rotherham college. In that respect, I hope to visit the region shortly.

It is important to recognise the contribution that apprenticeships will make. Hon. Members are right that there has been a growth in apprenticeships, and the situation will continue to get better. We are conducting an apprenticeship review precisely so that we can bring in small and medium-sized enterprises to ensure that our young people benefit from apprenticeships. The new vocational diploma will help to improve the participation rate—the number of those staying on until 18—and ensure that young people get work-based learning. New apprenticeships, which will ensure that people can work with smaller employers as well as larger ones, will bear down on the problem that hon. Members mentioned.

Frank Cook (in the Chair): Order. We must now turn our attention to our next topic, which is the broad and very intriguing subject of welfare reform.

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Welfare Reform

11 am

Ms Karen Buck (Regent's Park and Kensington, North) (Lab): I am grateful for the opportunity to have this debate and, as I am confident the Minister appreciates, my remarks will be concentrated on issues arising from this summer’s Government consultation document on welfare reform, with particular reference to lone parents. It is right, I think, to begin by saying that my comments, critical though they will be, do not undermine the principles of the welfare reform and welfare to work agenda that has rightly been at the heart of Government policy in the past decade. Huge progress has been made on several fronts, both directly, in employment, and in terms of the support services that run alongside, including the overall expansion of child care. There has been a major change in attitude and effectiveness at Jobcentre Plus, and the new deal programme and the investment that went with it has been successful.

That is a necessary and important reminder of the context of the debate. Indeed, the success of those programmes and of the Government’s overall economic strategy, with its emphasis on job creation, can be observed directly in the record of lone-parent employment in recent years. As the Minister knows, almost 60 per cent. of lone parents are already in employment, and the increase in lone-parent employment in the past decade, for which I have seen two figures—10 per cent. and 12 per cent.—is the largest entry into the workplace of any of the groups that are disadvantaged in the labour market. Thus we know already that the economic and welfare-based measures that have been directed at lone-parent employment have been successful.

In two ways, those measures have not been successful. First, they have not been successful in London. My thesis is that the relative failure of sustained lone-parent employment in London perversely demonstrates the very success of the policies that the Government have adopted in general to make work pay. Where work pays—outside London—lone parents have successfully entered employment. Where work, effectively, does not pay—in London—we have not been able to mirror that success. That tells us that incentives work, a point that I shall return to later. Secondly, my critique is about sustainability of employment, not job entry, and that, again, can be seen as relevant to London, where job entry rates for lone parents mirror those for the rest of the country, but job sustainability rates do not. A Government target that underpins the latest welfare reform Green Paper, based on job entry for a particular sector of the lone-parent population, is fundamentally misguided: it misses exactly the group of people, with exactly the problems, that we should be dealing with to be successful.

The welfare reform Green Paper proposes a quite significant tangential shift away from the incentives-based and support-based regime that has been successful across the board outside London. Central to that difference of approach is the migration of lone-parent claimants from the income support regime on to the jobseeker’s allowance regime. That is misguided and it will prove counter-productive. It is not necessary and I am most concerned about it, as are several organisations that work with children and lone parents.

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Ministers have said that they do not expect the jobseeker’s allowance regime to be applied in a heavy-handed way, and I am sure that that is right. I do not doubt that it is not Ministers’ intention to come down hard on lone parents seeking jobs. However, that is not consistent with the jobseeker’s allowance regime, and it raises a question about how that regime can be applied consistently for all groups if Ministers say that they expect a slightly more supportive and gentler regime. How are lone parents to be taken out of a regime that is predicated on a quite severe conditionality test? We already know from recent statistics that the conditionality applied to lone parents on existing benefits has led to a sharp increase in sanctions in recent years. I understand that the number of lone parents sanctioned for failing to attend a work-focused interview has risen from 5,600 to 40,000. That is a very significant increase, but the sanctions regime under the existing benefits system is nothing like as severe as that which will apply when the relevant benefit is jobseeker’s allowance. Sanctions, given the increased numbers, will have a much more deleterious effect on lone parents and, worryingly, their children.

My first question to the Minister—perhaps she will not be able to answer all the specifics of my questions, in which case I should be grateful if she wrote to me with answers—is what such a sharp rise in the number of lone parents sanctioned in recent years tells us about how the system is now operating; and what warning bells that rings about the dangers for parents of the much sharper jobseeker’s allowance sanctions regime. Secondly, will the Minister clarify whether there will be two parallel systems of regulations applying to jobseeker’s allowance when lone parents have migrated on to that system? Surely Jobcentre Plus staff will have to operate within a single regulations system. Does the Minister have any expectation of the likely number of sanctions under that regime?

Does the Minister accept that sanctions imposed under the jobseeker’s allowance regime can mean the complete suspension of benefit, so that families with children are left with virtually no income, and nothing but the option of applying for benefit to be restored to 60 per cent. of its original level? That compares with a maximum loss of income of 20 per cent. under the income support regime. What assessment—this is at the heart of my concern about the proposals—has the Minister made of the implications for child poverty of leaving children potentially with no income?

Is the Minister aware of the impact of sanctions on associated benefits such as housing benefit? The reality of the situation that faces claimants in my constituency who lose benefit for even a week or two is that housing benefit is automatically suspended, putting the family into immediate arrears. If they are in the private rented sector or temporary accommodation, two weeks’ suspension of benefit alone can leave them £1,000 in debt. In fact, in-work benefit claims for housing benefit can take weeks to process. That leaves families at risk of homelessness action and bailiffs. At the very best, the families in social housing lose their chance to bid for a transfer. I can supply the Minister with numerous cases of families who have attempted to work, even under the present system, and have got into thousands of pounds of debt, with bailiffs coming into their homes, and who, despite
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chronic overcrowding, have been suspended from the transfer regime because a benefits claim has left them in arrears.

Lyn Brown (West Ham) (Lab): Does my hon. Friend agree that the housing benefit regime is central to the issue of people’s ability to afford to work? The high cost of housing and the cliff edge, as it were, of housing benefit prevents our constituents from gaining work and from living and working as people do in the rest of the country.

Ms Buck: I totally agree with my hon. Friend, who has worked hard on the issue of housing benefit. The centrality of housing benefit and the impact of the way in which housing benefits tapers incomes, particularly for second earners in families and for people who are trying to work full time when they are in high-rent accommodation, is worrying. It is also a puzzle, as is the fact that the Government show so little interest in pursing the “Working Futures” pilot. I do not know whether that was tested in my hon. Friend’s constituency, but the system was designed for families in temporary accommodation in high-rent properties—£435 a week for Westminster council temporary accommodation—for whom improving status through work is almost impossible because of the housing benefit trap. The scheme was successfully piloted, but the Department appears to have no interest whatever in following it through. I am disappointed about that because I think that it is a good and sensible system. There are 60,000 households in London in temporary accommodation, and such a scheme could make a difference. There is a 30 per cent. difference in employment rates for people in temporary accommodation compared with families in social housing, which we need to address.

I have another set of questions about the proposed move to the new regime. The jobseeker’s allowance regulations allow for claimants to be treated as available for, and actively seeking, work. Will the Minister offer greater specificity on how that will relate to the availability of suitable child care? Is she confident about the provision of services for older children—those aged between 11 and 14 or 15, such as those who are part of the Government’s extended school programme? I must tell the Minister that I am not confident. The Government’s overall child care programme has been hugely successful—more than double the number of places are available, but they are almost exclusively for younger children. In fact, there appears to have been a levelling off in the rate of expansion in the past year or so. The Minister will be aware that the latest estimate by the charity 4Children is that there is only one place for every 200 children in the older age group in the country as a whole. There is little chance of closing the child care availability gap between now and next year—frankly, it is impossible.

What is the Department’s definition of child care for older children? There is a lack of clarity between the DWP and the Department for Children, Schools and Families regarding the definition of what extended schools are supposed to offer, yet extended schools will be at the heart of that child care provision. The extended schools offer explicitly does not offer child care. Given that extended schools are not designed to offer a service that will be at the heart of jobseeking, will the Minister say under what circumstances Jobcentre Plus staff can make
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a decision on what is appropriate and secure provision for older children? Given the vagueness and informality of the extended schools offer, how will staff at Jobcentre Plus decide whether provision is right for a parent or a child?

Is the Minister confident that there will be provision for school holidays, especially short holidays such as half-terms and Easter? In my area, which includes some of the most deprived communities in the country, such provision does not exist. That raises a secondary question about the use of the child care tax credit. That is taken up by very few people, particularly in London, in high-cost areas, where people need it. It is partly a take-up issue, but it arises partly because of a mismatch between the availability and cost of child care and the wages that people earn when they enter employment.

None of what I said is a criticism of the extended schools programme, which is excellent. I would like to see far more provision for children in wrap-around school hours, but I must tell the Minister that hard-pressed schools in my constituency that deal with large numbers of children on free school dinner entitlement have received an allocation equivalent to £20 per child per year for the next year. We are not going to be able to offer an 8 o’clock to 6 o’clock package with provision for school holidays based on that level of initial investment. I hope that the Minister will address that.

If a parent leaves or is forced to leave work because a child is excluded from school or from participating in a school event or is sick, or if child care arrangements break down, will the parent automatically return to full benefit under the JSA regulations? Who will arbitrate a dispute about whether it is reasonable for someone to leave employment on the JSA regime in such circumstances? Will it be possible for a lone parent to refuse a job on the ground that appropriate child care is not available? Will the DWP or Jobcentre Plus staff ask parents to use informal child care? That is a very important question, and we need clarity on it.

Will the JSA regulations be amended to ensure that no one is required to take work that does not make them better off? The regulations do not ensure that at the moment. Will the DWP fund child care while lone parents take a jobseeker’s direction? What specific arrangements are being made to help lone parents with children who have special needs? We do not have answers to those questions, and the Government timetable is short.

On alternatives, why is it not possible and, indeed, preferable, to keep lone parents on income support, which would avoid the risks I described, while making it a condition of benefit that they attend a work-focused interview? At the same time, the barriers that such people face could be assessed. After a few months, they could be moved automatically on to the new deal for lone parents and, after a few more months, they could be referred to a specialist provider. That would avoid the harshness implicit in the Jobcentre Plus regulations, and the risk of falling foul of the tougher rules on, and sanctions for, people leaving employment voluntarily.

In conclusion, work entry rates for lone parents are comparable with those for the general population. Incentives such as the tax credit do work—they are working outside London, where work pays. In places such as London, where costs are high and tax credit receipt is low, incentives are not working. We need to address that. The Department’s research confirms those things, and
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the Government need to take a different approach based on the one that I have outlined. It is consistent with the principles on which we agree: making work pay, overcoming barriers, keeping people in touch with the workplace and developing skills. That is consistent with everything that the Government have said about welfare reform in the past, and such an approach would be good for children, families and the economy.

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