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6 May 2008 : Column 206WH—continued

The city strategy learning network comprises all those cities that have a city strategy welfare to work programme. The cities involved have made several points, which I do not expect the Minister to answer today, but I urge him to read the document, because it contains some good
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ideas. One such idea is an adult advancement and careers service, and the document identifies priority areas for developing and piloting the new service. Will he consider whether such pilots could be used to test how assessment can be enhanced from day one of a claim, with more in-depth assessment for disadvantaged groups? Where possible, information on assessment should be shared across providers and other agencies, to contribute to the customer journey.

The delivery of a wide range of information and advice should be further co-ordinated and closer links should be forged with Jobcentre Plus. Perhaps unified branding should be developed across the service delivery partnership, which returns us to the confusing number of organisations. Even as someone who is on the inside and who is trying to help people to navigate their way through the system, I find that that issue recurs, and I am sure that clients have experienced it, too. We need more proactive approaches to supporting clients, such as skills health checks.

When I mentioned exploring the 16-hour rule with the Government, I should have discussed the inflexibility regarding eligible activity for Train to Gain funding. While I am at it, I want to throw in the extension of the education maintenance allowance and the cessation of the standard training allowance, which sometimes make it problematic for young people to start employment and access training rather than stay in education. The partnership could be used to improve those arrangements.

Nationally, the partnership effort should be assisted in Whitehall. The Department for Children, Schools and Families should consult city strategy partnerships on the implementation of the children’s plan to ensure that effective links are forged with extended school and child care provision, and the child poverty unit should prioritise city strategy areas for the proposed child poverty pilots. I hope that such links, including those to housing and health provision, are made more evident by the interaction between partnerships and the Department.

On making work pay, specific attention should be focused on a number of groups. For example, eligible child care costs are currently capped for large families; the level of housing benefit loss on taking up employment is prohibitive for homeless people housed in emergency accommodation; and non-working absent parents face potentially high immediate increases in maintenance payments on taking a job. There are many other such groups, including those who are using part-time work as a stepping stone into full-time work.

We must develop a more serious cognitive behaviour therapy arm of the city strategies. If we were enabled to do what we want to do locally, there would not be enough cognitive behaviour therapists in the private and public sectors to make the breakthroughs that we need. That issue affects individuals who may not need serious assistance with profound mental health problems, although some may need such help, but who need less skilled interventions—such people may need a friend, a helper or someone to motivate and encourage them in difficult times.

We have made a sound start in Nottingham, and we have developed imaginative proposals—we want to be at the cutting edge of what happens nationally, and we are. The city strategy welfare to work scheme is helpful, and I am delighted that it was advanced by the former
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Secretary of State for Work and Pensions, my right hon. Friend the Member for Barrow and Furness (Mr. Hutton), continued by my right hon. Friend the Member for Neath (Mr. Hain) and is now being taken forward by the current Secretary of State for Work and Pensions, my right hon. Friend the Member for Stalybridge and Hyde (James Purnell). If the DWP continues to listen to those on the ground who are trying to make the system work, a series of possibilities will open up, which will allow the implementation of the detail to make the proposals work. For example, when antisocial behaviour orders were introduced, they were regarded as a good thing, but it took several years of Members of Parliament, as much as anyone else, interacting with Ministers to make ASBOs reliable and effective.

There has been a good start both locally and nationally, but we need to know where the Government want to take us on this journey. I assure the Minister that wherever the Government want to move the welfare to work programme, those of us who care about under-skilling, under-training and under-employment in our constituencies, whether or not we work within local strategic partnerships, will be at his shoulder trying to make those programmes work. Again, I thank the Minister and his officials for all that they have done in putting the first phase of the city strategy in such good health.

11.36 am

Paul Rowen (Rochdale) (LD): I congratulate the hon. Member for Nottingham, North (Mr. Allen) on securing this debate. I do not know whether, as he has said, the bank holiday means that many MPs are still on their way to work, but the topic and this debate are important.

Although the hon. Gentleman has mainly discussed the city strategy debate and what is happening in Nottingham, he has raised a number of broader issues, which I want to consider. In addition, I represent an area of Rochdale that is still experiencing rising unemployment, and I hope that the Minister will address the issues around that.

After 11 years of this Labour Government, more than 9 million people of working age are unemployed or receiving benefit. More than 2.5 million of them are on incapacity benefit, of whom more than 1 million suffer from mental health problems. The figure for incapacity benefit has risen dramatically since 1979, when it stood at only 800,000. It is clear to me that successive Governments, both Labour and Conservative, have used incapacity benefit to mask unemployment. Although there is now a broad consensus that that is wrong, we are dealing with the legacy of that under-investment in people.

Liberal Democrats believe that work is good for most people. It is the best route out of poverty, and it provides benefits in terms of confidence and mental well-being. In the past 10 years, policy has been driven by the Treasury, and, as the hon. Gentleman has said, it has not been joined-up.

A holistic approach is required to deal with particular problems in our industrial towns and cities. That is apparent when one looks at the Public Accounts Committee report that shows that, except for the pathways to work programme for disabled people, which has been underfunded, and the jobseeker’s allowance for the
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over-50s, the programmes to tackle unemployment have failed to be a cost-effective solution. Similarly, the recent National Audit Office report showed that the likelihood of exiting JSA varies from 4:1 to 20:1, depending on the location of the jobseeker. The average likelihood is 9:1 and for people over 25 and the long-term unemployed, it is 40:1. Those statistics are entirely unacceptable and show clearly that, despite their rhetoric, this Government have not succeeded in dealing with some of the longer-term problems.

When announcing a review of the welfare to work strategies on 18 December 2006, the then Secretary of State, the right hon. Member for Barrow and Furness (Mr. Hutton), said that the review would address

I hope that the Under-Secretary of State for Work and Pensions, the hon. Member for Warwick and Leamington (Mr. Plaskitt), will tell us today where that review is going. However, I have to say—I am sure that many hon. Members who are not here today would, too—that it is not just the “can work, won’t work” attitude that needs to be tackled, but the “can work, can’t find a job” attitude. Earlier this year, the Daily Express did a large piece focusing on part of my constituency—the Falinge area—showing that more than 75 per cent. of the people there were on benefits and not working. I know from talking to a good many of those people that that is not because they do not want a job, but because the support they are given is inconsistent and short-lived, is not tailored to their individual needs and does not deal with some of the serious problems that many of them have; in addition, when they have gone through all the processes and are ready for a job, there are no jobs available. In my constituency, unemployment is still rising, and a recession is likely to ensure that it rises even further. There is a need for far more imaginative strategies and greater acceptance by the Treasury of the fact that, sometimes, we must invest to save.

I know that the Government have responded to the Freud review and the Leitch report and that we are seeing change. Jobcentre Plus offices are being changed, which the Liberal Democrats broadly welcome. We want Jobcentre Plus to become a “first steps” agency, responsible for benefit claims and for identifying suitable employment support, rather than for providing longer-term support. We support the Government in their efforts to involve more private and voluntary sector organisations in tailoring provision better to the needs of unemployed people. However, we are concerned about the way the contracts are being let; we are not convinced that large-scale regional contracts, especially if they might be taken by overseas companies that have a strict profit motive, are necessarily the best approach. There is a place for small-scale, local providers and we do not want such provision to be driven out. We accept the need to tackle skills gaps, which is why we believe support should be far more tailored and should not be short term—13 weeks or a similar period. People who have been unemployed for four or five years may take longer to get a job and need to be given enough time.

We welcome Dame Carol Black’s report on health and worklessness; her work on that important link needs to be developed. The Government have not given sufficient support to that type of initiative in the past,
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although that work is now being done. On Saturday, I spoke to a constituent who is on incapacity benefit; he had gone back to work, but was unable to stay in the job because, owing to periodic relapses, he was unable to continue to work full time. The Government should consider what the hon. Member for Nottingham, North said about the 16-hour rule. If we are to get the more than 1 million people who suffer from mental illness in its various forms back into work, we must accept that they need more support, and their employers and the benefit systems must recognise that there may be times when they are not able to work full time or when they need time off.

We have to look at how someone’s inability to work can lead to a sudden loss of income, as their housing and other benefits are affected, or to their being told that they owe money. The whole benefits system needs to be reformed. It is far too complex and acts as a powerful disincentive to getting back into work. We believe that there should be a single working age benefit that “does what it says on the tin” and is not loaded with caveats about what individuals can and cannot claim and how they can move forward. Within that, we want a single minimum wage, without the different rates that are paid to people depending on their age, which we believe are unhelpful.

There are many barriers to work. Some 1.7 million people face withdrawal of benefits at marginal rates of more than 60 per cent. if they return to work. When people return to work, we want some of that benefit to continue to be paid to them, with perhaps some paid to their employer as a subsidy—a guaranteed investment in their job.

I hope that the Under-Secretary will outline today the commitment involved in the city strategies and how the Government envisage their development. We believe that it is not only cities, but towns such as Rochdale that need a strategy. We are considering as a borough what we can do to tackle the problems in Falinge. There is something else that the Government can do to overcome the “can work, can’t find a job” problem and to help people to find a job that lasts.

Mr. Allen: I agree with some of the points that the hon. Gentleman has made, especially on the interaction of benefits and taxation. I am not sure whether the 20p rate makes that easier or harder. Does he agree that, if city strategies are to be extended to towns as he suggests, we need to know, as a matter of urgency, that the current city strategies will continue for a couple of years, as that would provide the basis for any expansion?

Paul Rowen: I agree entirely. We need a commitment from the Government. The review of the welfare to work strategies announced in December 2006 by the then Secretary of State will enable the Under-Secretary to give that commitment to those cities that are already operating a city strategy, thus enabling the programme to be rolled out further. That is what I would like to see happen.

In my borough over the next five years, £2 billion of private and public investment is being spent. That is a combination of money through housing market renewal; Building Schools for the Future; other projects such as Metrolink, which is coming to Rochdale; the local improvement finance trust, or LIFT, programme for health centres; and £200 million that is being invested by the private sector in regenerating our town centre.

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When there is such large-scale public investment going on, I would like to see the Government encouraging employers to take on board and train people who are currently unemployed. That is why it is important to shift some of the benefit that is being paid to people in Falinge to sit at home when they want to work; I could take the Minister round to people who will tell him that they want to work but cannot find a job. If we look at the unemployment rate in Rochdale, that is patently obvious; as a major manufacturing town, we are still continuing to lose employment. However, it would be good if we could get some of the money that is being invested to enable unemployed people to go into some of the major projects. For example, the housing market renewal investment going in could train people to become bricklayers, plasterers, plumbers or electricians.

Similarly, the work that is going on in Building Schools for the Future would benefit local people. That work is not all about building, because in these new schools the IT infrastructure is being put in, along with private finance initiative programmes that will enable private sector providers to deliver that infrastructure. So people can also be trained in IT.

If we could see such joined-up government, which could use the leverage that public sector and private sector investment have to alleviate unemployment problems, that would go a long way towards improving matters. That is an awful lot of what the city strategies, such as the Nottingham city strategy chaired by the hon. Member for Nottingham, North, are trying to do. It is joined-up government. It is not all about putting everything out to the private sector; it is about the private and public sectors working closer together.

That is why it is important that the Under-Secretary give an early indication of the Government’s thinking on city strategies and that the city strategies programme be rolled out. Rochdale is not a city, although we are part of Greater Manchester and we have been involved in the city strategies programme. There is a great need to develop these policies.

Unemployment, including the number of employable people who are not employed, remains stubbornly high, certainly in industrial blackspots such as my constituency. We need new thinking and we need a commitment from the Government to long-term investment, not short-termism. We also need the Treasury to begin to understand that it is possible to spend to save. If we could have such a policy, we will go a lot further than we are at the moment.

11.53 am

Mr. Mark Harper (Forest of Dean) (Con): It is a pleasure to serve under your chairmanship again, Mr. Martlew, and I will not spoil things by mentioning football; we in Gloucestershire tend to play sports with a different-shaped ball, so we will stick to them.

I also offer my congratulations to the hon. Member for Nottingham, North (Mr. Allen) on securing this debate. I must say that, at the beginning, I was a little surprised by the fact that he was sitting behind me, and I wondered whether he was announcing something about his political affiliations. However, having listened to his speech, I am sure that the Under-Secretary is overjoyed to learn that he was not doing so, and that the hon. Gentleman is still on the Government Benches.

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I listened with great care to what the hon. Gentleman said and I have followed a number of the things that he has said on these issues. I know that he takes very seriously the idea of joined-up government and indeed, in his own constituency, he is rather an exemplar of that approach, chairing his local strategic partnership and, as all MPs do, banging heads together locally, within both local agencies and Government agencies, to ensure that those agencies work together effectively.

The hon. Gentleman referred to the position of Nottingham in the sector of welfare to work policies. I have done some research for this debate and therefore I know that in his constituency and elsewhere in Nottingham there is a challenge, for example, in terms of the households that are claiming out-of-work benefits. As he said, his constituency of Nottingham, North has the unfortunate status of being in the top 20 nationally of constituencies that have children in households claiming out-of-work benefits, with a figure of 38.6 per cent. Again, if one looks at the number of children in those households, one sees that 8,265 children are affected. Indeed, all three of the Nottingham constituencies are right at the top of the league table if one looks at the east midlands as a whole. So he laid out extremely well the challenge for welfare to work strategies and the importance of having all the different agencies joined up.

The hon. Gentleman also made the point about the intergenerational cycle of deprivation, which is why I referred to the figures about children in households on out-of-work benefits. It is certainly the case that, if a child is brought up in a household where nobody works and in an area or estate where perhaps very few people work, that child is brought up in an environment where the norm is that people do not go out to work. I think that that is what the hon. Gentleman was referring to, and that is the problem that we have to try to crack.

I was also very pleased to listen to what the hon. Gentleman was saying about early intervention. In a different incarnation a few years ago, when he was shadow Home Secretary, my right hon. Friend the Member for West Dorset (Mr. Letwin) made similar points. My right hon. Friend used different phraseology; he talked about a “conveyor belt to crime”. However, he was very much looking at identifying families and the situations that did not give people a very good opportunity to avoid trouble, and he also considered what we could do at an early stage. The hon. Member for Nottingham, North laid out those problems and possible solutions very clearly.

The hon. Gentleman also laid out the importance of looking at benefit reform, particularly benefit simplification, and its interaction with our welfare to work strategies. It is very clear that the benefit system is very complex; it is difficult enough for Ministers, shadow Ministers and Members of Parliament to understand it sometimes. Therefore, I sometimes wonder how those claiming the benefits and those thinking about whether they would be better off in work are supposed to do things. Although there are some good calculations now for single parents on out-of-work benefits who are looking to go back into work, those calculations are not done universally for everybody on out-of-work benefits. The calculations can be very complex for people when they are trying to work out if they would be better off in work.

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