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23 Oct 2008 : Column 490

The break-up of the Learning and Skills Council and the establishment of local strategic partnerships offers hope that resources can be focused on local priorities. As hon. Members have said, it is crucial that local business plays an important part of any such partnership. Personally, I think that it is useful if those partnerships are led by businesses providing practical input right from the top. However, participating businesses are concerned that they will, in any case, ultimately fall foul of Government micro-management of the whole process.

There are four main concerns. First, the market is too complex and confusing for those seeking training and for employers. Secondly, Train to Gain is poorly understood. Thirdly, there are fears that the demise of the LSC will lead to a multiplicity of quangos and further complications in the market. Fourthly, there are practical concerns about diplomas and the relationships to other legislation. The stories about building trade students not being allowed on to building sites until the age of 16 for health and safety reasons are not apocryphal. Training should not be theoretical in these circumstances; it should be practically based and experienced on site.

A number of hon. Members have mentioned the need for more apprenticeships. There is huge enthusiasm for apprenticeships, and it runs very wide. My own county council, of which I am still a member, has some 50 apprentices in fields from social care to civil engineering. Large companies in the area are enthusiastic about apprenticeships, but so too are local small and medium-sized businesses. When I recently visited Henley college, which provides training in these areas, people were effusive in their praise for the commitment of small and medium-sized enterprises to training and employment, not only in providing apprenticeships but beyond apprenticeships. I urge the Government to consider introducing further flexibility in this context.

Paul Rowen: Does the hon. Gentleman agree that a barrier to that flexibility is fixed start dates built around academic terms? Many employers need flexibility as to when apprenticeships can start.

John Howell: The hon. Gentleman is right. Businesses do not work to a set timetable, and the barriers that inhibit apprenticeships must be driven out of the system.

I urge the Government to think about introducing further flexibility in the skills arena and to reassure us that in doing so they will take into account the importance of competitiveness in how these programmes are run.

1.43 pm

Mr. McNulty: I apologise for not intervening on the hon. Member for Henley (John Howell). I felt for a while that that was obligatory, so I am sorry that I was not quick enough to do so.

I thank the hon. Member for Hertsmere (Mr. Clappison) for welcoming me to my new position. I look forward to working with him and his team, in between being Minister for employment and Minister for London. I know him to be a gentleman and someone who is very studious in whatever brief he has. I also look forward to working with the hon. Member for Rochdale (Paul Rowen).

I would take three key words from this debate: practicability, simplicity and flexibility. Those three aspects underline much of what has been said in all the perfectly
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fair contributions. It is important to return to my little faux pas about my hon. Friend the Member for Stevenage (Barbara Follett), because my hon. Friend the Member for Luton, North (Kelvin Hopkins) is both right and wrong. Yes, of course, given the public funding and the need for money to go where we can exact the best return, we must concentrate on areas where the lack of skills is at its greatest. However, I do not accept that areas such as Henley, which we have just heard about, can almost be left alone. The regional contribution of each and every area, whatever its starting base, is hugely important for our economy.

Wherever we are going in the current economic downturn, its impact could be desperately disparate and different in various areas, and the relativity of its impact could be very important. For example, on the latest figures, the most significant increases in the claimant count were in the south-east and south-west, albeit from a low base relative to other areas—but that does not mean that we should not be doing all that we can, as flexibly as we can, for the south-east and the south-west. The lowest increase was in London—5 per cent. as opposed to about 30 per cent. in the south-east and south-west—but we know that there is a huge quantum of unemployed in London because of the nature of its labour market. The National Economic Council, the regional economic structures and the Council of Regional Ministers should be pushing back up to the national level the immediate concerns and fine-grained nuances of each and every labour market in terms of jobs lost, vacancies and skills shortages. Those points were well made, and I will try to ensure that that occurs.

As the hon. Member for Henley said, that granularity in getting closer to what is going on in localised labour markets will be one result of moving down from the Learning and Skills Council to local strategic partnerships. What local employment partnerships have done, where they have been successful—nearly 50,000 jobs have been secured through that process—is another aspect of his point about having fine-tuning and sensitivity to what is occurring in local labour markets. That needs to happen at any time, but in a period of downturn, significant or otherwise, it needs to happen all the more. I also take his points about practicality and about having greater flexibility in matters such as Train to Gain.

In response to the hon. Member for Rochdale, I point out that the announcement on the £350 million was made yesterday, principally in the other place, but my hon. Friend the Economic Secretary to the Treasury spent an hour here elaborating on it. If the hon. Gentleman reads Hansard and still needs greater detail, I will happily provide it for him. This is partly to do with a sharper focus on getting from level 2 to level 3 as well as other refocusing in terms of Train to Gain. More details on how to achieve that will be elaborated on in the coming weeks.

I do not take so seriously the comments that were rather cavalier with recent history. For the record, since 1997 long-term claimant unemployment has fallen by more than three quarters and is close to its lowest level for 30 years. Let us have the debate about nuances and trends, but not by undermining what has gone before. It is easy to assert that there are more unemployed 16 to 24-year-olds now than in 1997, but youth claimant
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unemployment has fallen by a quarter and long-term, and six-month-plus youth unemployment has fallen by over three quarters.

I accept that what is very important, as the hon. Member for Hertsmere said, is not necessarily the claimant count, nor even the International Labour Organisation figures, but the number of people who remain in a workless state or entirely economically inactive. We are trying to address those individuals, not least by introducing the employment and support allowance on Monday, enabling us to go through the various incapacity benefits available to individuals to replace them with one allowance, for precisely the reasons the hon. Gentleman suggests, so that no one is left behind. Those in that category who do want to work—I fully accept that there are plenty, some of whom we are not getting to as rigorously as we should—should be helped in that fashion. That will aid with regard to simplicity, as well.

Paul Rowen: The Minister was making a point about flexibility, which I think is important. Six months ago, I encountered a case in which someone wanted to train to be a driving instructor. There was a cost for the relevant course, but Jobcentre Plus said that he was not eligible. I hope that we will look at the criteria that are used, because that course would have got him a job, but he was not eligible. Will the Minister look into such cases?

Mr. McNulty: If the hon. Gentleman wants to write to me about the specifics, I will certainly have a look, but he will know that the Green Paper contains proposals to increase the flexibility of job centre personnel advisers, allowing them to take better account of the specific needs of each and every customer early in the process. I take his broader point about things being done as early as possible.

There are some pilots under way that deal with hon. Members’ suggestions about bringing employment and skills together more readily. We are looking at developing further all aspects of the integrated employment and skills service for people including skills screening—I almost said silk screening; that is obviously a subset of skills screening—for new claimants, skills health checks and skills accounts, and hopefully we will be able to implement those further to bring the needs of individuals and employers and that backdrop of analysis of a local area together far more readily. Whatever the shortages, even in areas as relatively affluent as Henley, the industries described by the hon. Member for Henley are important, and we need them to be performing as expertly as possible, and with as much capacity as possible, for the wider economy.

Kelvin Hopkins: One of the points made by the hon. Member for Henley (John Howell) concerned larger employers sustaining apprenticeships. I want to reinforce the point I made about small employers and the difficulty they have in sustaining apprenticeships. Will the Minister take back to his colleagues my suggestion that we ought to look again at a training levy system to help to subsidise smaller employers to retain and sustain apprenticeships for the future?

Mr. McNulty: I shall certainly take that back, but I am sure that my hon. Friend knows the answer as well as I do. The broader point about sustainability has been
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well made, and it was a theme of our debate. Getting people back into work in a sustainable fashion is better than having a sort of merry-go-round, and being able to sustain apprentices in the small business sector is central to the experience and reward that individuals can get out of the process.

That is why much of the £350 million refocus will be on the small and medium sector, as everyone knows. We are trying to concentrate on small businesses—a sector that may suffer more from the lack of skills and lack of speed in reskilling the local labour market. By doing that alongside the other fiscal things we are doing, we will try to sustain those small businesses. Much of the Government’s focus over coming weeks and months will be all that I have described regarding the route from unemployment back into employment, but it will also be about wider fiscal interventions to ensure that jobs do not go in the first place, which is very much part of the equation.

I take seriously the point of the hon. Member for Hertsmere about worklessness and lack of economic activity. We take seriously the focus on small businesses, and the point about being as local as possible, using intelligence and understanding the nuances in regional and sub-regional labour markets. That all relates to the point I made in my opening remarks about geographical and sectoral concentration of jobs and skills. As with the wider fiscal picture, in this area of all areas, within the context of the progress made thus far in periods of relative prosperity, as the hon. Member for North-East Hertfordshire (Mr. Heald) said, we had better make sure that there is a flexibility to the new deal and everything else that the Jobcentre Plus network offers in periods of less than clement weather, if I can use that phrase. That will be the test. I sincerely think, based on what I have known as a constituency MP and as a Minister, that the Jobcentre Plus network is up to that test, as is the wider system, if the points about simplicity, local focus, flexibility and practicality are allowed to permeate the system during a period of economic downturn.

Mr. Heald: Does the Minister accept that the changed circumstances we are seeing are a bit of a shock to the system? It was not expected that we would necessarily be going into recession at this time. A lot of the plans for job centres are based on the idea that things were going to be ticking along as normal and that it would be possible to cut out waste and so on, and to have a little less capacity. Does he accept that we might need more capacity, not less?

Mr. McNulty: I simply do not accept that characterisation. I repeat that job centres have the flexibility and contingency to meet whatever is coming in the weeks and months to come.

I commend everyone for their contributions and thank the House for the debate.

Question put and agreed to.


23 Oct 2008 : Column 494

Public Accounts

1.56 pm

Mr. Edward Leigh (Gainsborough) (Con): I beg to move,

It is a pleasure to open the second debate in a little over five months on the work of the Public Accounts Committee. Since our last debate, the Government have managed to achieve the impossible through the incredible, with their lifeline to the banks. The impossible achievement has been to dwarf the scale of public money encompassed by the reports in today’s motion. In this debate last year, I was able to recite in a single sentence a list of public spending projects amounting to more than £60 billion. In the last month, some £500 billion has been pledged in an attempt to crack the ice covering our frozen financial system. Incredibly, the word “nationalisation” has re-entered the Government lexicon as the taxpayer now seems likely to own substantial swathes of our once mighty mortgage providers.

I am sure that Members will agree that there can have been no clearer signal that something was really up than the news that a crack team from Her Majesty’s Treasury was descending on Reykjavik. For the sake of those of our constituents whose savings are locked in Icelandic banks, including £7 million from West Lindsey district council, I can only hope it was not the same Treasury team who took four months to produce the Government’s response to our tax credits report.

Of course, the sobering events of recent weeks are not the subject of today’s motion. However, the House may be interested to know that I have spoken with the Comptroller and Auditor General about the audit of the £37 billion that the Government are injecting into the banks, which is supported by the recapitalisation scheme. He is proposing to examine whether the Treasury has been able to secure compliance with the specific commitments that the banks are making to maintain lending to homeowners and small businesses; to help people stay in their homes; and to meet the criteria that the Treasury has laid down for senior executive remuneration. He will consider those matters. Alongside those issues, he will want to consider whether the wider strategic interest in strengthening the business performance of the banks has been met, thus also protecting the value of the taxpayer's investment. The Comptroller and Auditor General is expecting to report once we have seen sufficient evidence of the Treasury’s progress towards those important objectives. No doubt, our Committee will wish to keep the implications for taxpayers under careful review following any National Audit Office report.

Personally, I perceive genuine risks in any prolonged Government holding in the banking sector, however necessary those holdings may have become in the current financial crisis. The temptation, as with the former nationalised industries, will be to impose extraneous requirements of pay, employment, backing winners and artificial lending priorities, which will hinder rather than help the banks’ return to financial health. In the main news on Sunday night, there was already talk
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about the fact that we—the public—own the banks and that they must therefore take a more public-spirited view when people fall behind with their mortgage payments. That is fair enough, but let us remember that the investments are taxpayer funded, and that the taxpayer is entitled to expect enhanced value, realised through an early return to the private sector. I am sure that that is the Treasury’s view, too.

The glacial storm that is creeping over the economy should give all Members who consider the Committee’s reports cause for cold, hard reflection. As economic prospects hardened a year ago, the comprehensive spending review stemmed the flood of gold that had previously rushed in—and out—of spending Departments. Now, with the flow of taxpayers’ funds diverted to the City, and the onset of an economic winter of uncertain harshness and duration, the constraints on Departments are likely to be tighter still.

In our previous debate on the matter, I noted that the narrowed ideological gap between the major political parties placed the efficient delivery of public services—and hence our Committee’s work—at the heart of the political debate. That is even more true today, for a moral imperative now embraces that political importance. Taxpayers facing difficult times have no more to give. Citizens in need will rely on public services to help them through in difficult times. A Government who rely on borrowing can afford no costly public expenditure failures. The duty of all public servants is therefore clear, vital and personal. It is to stretch every pound and squander none. That is where our Committee comes into the debate.

The Committee’s reports offer prescriptions from which, I believe, public servants can learn, and I want to emphasise today three themes that have a wider resonance. Sound financial management is paramount, reducing internal costs is essential and—perhaps most important and pertinent—understanding risk is critical if projects are to end on the right side of the dividing line between successful delivery and disaster.

Departments need to display strong financial management if they are to withstand the slings and arrows of changing economic conditions and deliver cost-effective public services. They need the requisite finance skills, commercial acumen, the right information and leaders who emphasise that money matters. I welcome the increasing priority that is given to professional finance skills. We are delighted to say—because it reflects a long-running campaign by the Committee—that all but two major Departments now have a professionally qualified finance director. Those appointments have brought new focus to financial management in Departments.

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