Examination of Witnesses (Questions 60-79)
Department for Work & Pensions, Learning &
Skills Council and Jobcentre Plus
26 November 2007
Q60 Geraldine Smith: Going back to
my point about the public, could not more be done in that way
to provide jobs for people, particularly people who are hard to
place in employment?
Lesley Strathie: What is the public
sector doing as an employer, or through procurement routes to
work in partnership? Is that the question?
That is a fair question, and one area of work
that we have focused on. Indeed, I am involved with a small group
of permanent secretaries, led by a Permanent Secretary in another
Department, who will oversee the civil service as an employer
in our Departments in terms of how we can deliver against the
local employment partnership agenda.
Q61 Geraldine Smith: You mentioned
in-work credit, and the issue is difficult. Quite a few people
will leave work because it is not in their interests to stay if
they think they can get as much on benefits, and perhaps work
at all sorts of things on the side. If someone has an in-work
credit, I guess the difficulty is that they might be working side
by side with people who do not receive such a credit. Have you
found any issues about resentment or unfairness?
Adam Sharples: That is an interesting
question, and it is not something that has come out of the evaluations
that I have seen so far. Often, colleagues would not know that
an individual was getting that particular payment, unless that
individual wanted to volunteer the information, so that may help
to deal with the resentment issue. But this is a payment for 12
months maximum, so it is focused very much on the transition into
work, getting over the hump of getting used to work and getting
a secure income, and easing people through that transition.
Q62 Geraldine Smith: Do people not
think, "Okay. I'll stick it out for 12 months while I'm getting
this extra money"? Is not that where you get your issues
of sustainability?
Adam Sharples: It would be a concern
if we saw people staying in jobs for 12 months and then slipping
back on to benefit as soon as the credit stopped, but my understanding
of the evaluation so far is that there is no evidence of that
happening. By the time somebody has been in a job for 12 months,
they are up and flying, they are used to being in work, they have
a steady income and they are not going to give that up to go back
on to benefit, which is not an easy life.
Lesley Strathie: In my experience,
if they are in work for a year, they tend to stay. We are much
more likely to get people falling in and out of work at certain
times of year and perhaps taking temporary jobs for Christmas
or the summer holidays and school holidays. Faced with other things
to manage, people are more likely to come out of work.
Q63 Geraldine Smith: Turning to training
and the impact of immigration, I can think of one care home in
my area that a number of British employees have left and where
a number of immigrants are working. A lot of these immigrants
are highly trained and highly skilled and they are hard workers,
but the employers seem to be getting away without having to train
people, because they have a pool of ready-trained people. Is that
not having an impact on British workers with low skills, because
employers do not need to provide training if they can find people
who are highly qualified—and sometimes over-qualified—for
the jobs that they are doing?
Stephen Marston: I think that
Adam mentioned that the research evidence we have shows no direct
and immediate impact of that form. It is clearly in the interests
of those employers—it is good news in an economic sense—that
they are able to recruit good, well-trained, highly motivated
people. The issue for us is what support we can best provide for
the people who have not got those skills and are not as attractive
to employers, because there will be other jobs, and we need to
help people get the qualifications and skills to fill such jobs
successfully. That is why we are putting so much emphasis on enabling
people who have not got the skills and qualifications to get some
that are of economic value to get the jobs that employers are
offering. It cannot be either/or—we cannot block off migration
in the hope of reserving jobs for people here.
Q64 Geraldine Smith: I am not suggesting
that we should—I am just suggesting that we should be aware
of possible implications. In particular, I am thinking of employers
looking for an easy option, rather than training British people.
Mark Haysom: May I make a point
on that? We do a massive survey of employers every other year,
and our latest survey demonstrates that more employers are training
people now than before. Two years ago, 900,000 employers said
they were training people and that is now 978,000. The amount
being spent on training by employers has gone up from £33
billion to £38 billion. I recognise that what you are saying
is a danger, but the evidence is to the contrary.
Geraldine Smith: Well, not the evidence
on the ground.
Chairman: Thank you, Ms Smith. Keith
Hill.
Q65 Keith Hill: Thank you, Chairman.
As the NAO Report indicates, the record of the new deals, employment
zones and the rest of it has been very impressive in terms of
getting people into work. However, your agencies and administrations,
which are involved in welfare to work, really do find themselves
between a rock and a hard place, do they not? They are caught
between an education system that, at least historically, has delivered
an army of the functionally illiterate and innumerate and a tradition
among British employers of not investing highly in training. Is
it still the case that British employers as a whole invest less
in training than employers in other countries?
Stephen Marston: No, our data
suggest that British employers, relative to those in most other
countries, are actually good at investing in training. The latest
national employers skills survey data show that expenditure on
training continues to go up.
What is true is that employers have a concern
that sometimes they are having to make good a skills base that
they think should have been sorted out before they got into this
territory at all. Hence, the importance of the 14-to-19 reforms
to try to ensure that in future the flow of young people coming
into the labour market is better skilled and highly trained, with
the qualifications and skills that employers really want. We need
action on both: the young people coming into the labour market
and the stock of adults already there.
Q66 Keith Hill: Mr. Haysom made the
point that investment in training seems to be significantly increasing,
but is it not still the case that about one third of employers
do not invest in training? Have you worked out why they do not
want to do that?
Mark Haysom: As an employer most
of my life in different businesses, there are any number of different
reasons at any time. Our challenge is to work with small employers
in particular and make it easier for them to engage with the system
to improve their productivity, and to get them to understand the
link between skills and the bottom line. That is our particular
challenge, and that is why Train to Gain is so important.
In the first year, we managed to engage with
52,000 employers, which is an extraordinary number of employers,
from almost a standing start. Most of them—72%—were
what we would call hard to reach. Almost all the hard to reach
are small businesses. The programme is hitting those businesses
and getting them to understand the links between productivity,
skills and the bottom-line impact that they can get.
As I said, there is any number of reasons at
any given time. Some of them are about being small, or not really
understanding the flexibilities that are now in the system. Employers
may not understand that they can get training hours and places
to suit them and so on. There are a lot of those kinds of barriers
that we need to break down.
Q67 Keith Hill: It is common currency
between us in this discussion and the NAO Report that those with
good skills do best if they get their training in work.
Mark Haysom: Absolutely.
Q68 Keith Hill: Yet the Report also
draws attention to the fact that many employers are reluctant
to invest in basic skills such as literacy and numeracy. Is that
the case across the board, or is it primarily the case with small
and medium-sized enterprises?
Mark Haysom: It comes back to
what Stephen was saying a minute ago about the assumption by employers
that people should have those basic skills by the time they arrive
in the labour market. They assume that they should not end up
paying for basic skills. However, they do not have to, as there
are entitlements for employees for basic skills training. Again,
Train to Gain delivers that. It can deliver the entitlement for
a first level 2.
Nearly 250,000 employees trained during the
first year of Train to Gain. Within a year, the service was equivalent
in volume to the apprenticeship service. That is an extraordinary
achievement in one year, and the programme will get bigger and
bigger. As Stephen said, more than £1 billion will be spent
on it in three years' time.
Q69 Keith Hill: In three years' time
there will be what?
Mark Haysom: More than £1
billion spent on the Train to Gain service, addressing precisely
the issues that you are raising.
Q70 Keith Hill: Let me come on to
the Train to Gain scheme. The Report says that the public service
delivery agreement last month identified a number of risks, including,
as I understand it, problems with employer co-financing. What
does that mean?
Stephen Marston: What that is
getting at is that some components of the training we support
are fully funded—we pay the full cost. However, that is
not true of all the training, because the higher up the qualification
ladder you go, the stronger the return to the employer and the
individual, so they get a direct wages and productivity benefit.
At level three, for example, which is equivalent to A-level, we
have an assumption of matched funding: we pay some and the employer
pays some. It can be a challenge for some employers to accept
their contribution to the overall cost. That is what the point
was getting at.
Q71 Keith Hill: Again, does that
depend on the scale of the enterprise?
Stephen Marston: Not really, no.
We see good employers—whether large or small—training
across the piece and across all different sectors, so it is not
a direct function of size.
Q72 Keith Hill: But if they are reluctant,
despite your best efforts, to provide basic numeracy and literacy
training, who delivers it and what happens to the individual?
They are taken out of work presumably.
Stephen Marston: We can do it
in two ways. Wherever an employer sees a case for helping their
employee get basic literacy and numeracy skills, we can do that
through Train to Gain. But the individual, if they do not get
help from their employer, can go to a college or a training provider,
all of which is free, and enrol on a skills for life literacy
or numeracy programme. So wherever the motivation of the employer
or the individual exists, we can help and it will be free.
What is much more difficult to crack is if neither
the individual nor the employer want to do it. What do you do
then? We are working within a voluntary system. We give all the
encouragement, and we have a big advertising campaign that is
trying to draw people's attention to the value of the scheme.
You may remember the gremlins advertising scheme that ran for
some years on television. We are doing as much as we can do to
incentivise people, to say, "The provision is here, it's
free, it has benefits for you," and year by year the numbers
are going up. We are meeting and exceeding our targets for literacy
and numeracy skills. It is going well, but it would be foolish
to deny that there is a big pool of people whom we are still trying
to get through to.
Q73 Keith Hill: May I return to the
issue of the social composition of claimants? You have obviously
analysed patterns of repeat claims from the 1980s to the present.
Have you considered the social indicators, such as age, sex, marital
and family status, ethnicity, regional, urban and rural location,
to tell you whether there have been any changes in the composition
of the claimant pool over the period?
Adam Sharples: We have some data
on those characteristics. For example, if you look at JSA claimants,
40% of claims each year come from people who are under 25, so
the chances of you coming on to JSA are quite high if you are
young, but they rapidly fall off and are low when you get older.
That is an example of the analysis that we can do. If there were
specific questions you wanted to follow up, we would be happy
to see whether we would be able to provide answers.
Q74 Keith Hill: It is not just vulgar
curiosity, because if you were to find changes—and who knows,
you may—that would be quite helpful to your potential strategies
for dealing with that group of claimants.
Adam Sharples: Indeed. The policies
that have been adopted for each benefit have been guided by some
understanding of those changes. For example, incapacity benefit
10 years ago was quite regional: it was concentrated in south
Wales, Glasgow and the north-east, and there were rather lower
incapacity benefit claim rates in the south-east. In the past
10 years, the pattern has shifted, partly reflecting the conditions
that bring people on to benefit. Some of that analysis and thinking
has gone into the design of the new work capability assessment,
which is the new test of eligibility, and into the pathways to
work programme. So yes, we do try to understand those trends and
build them into policy thinking.
Q75 Mr. Dunne: I have been trying
to get my mind around the complex set of different programmes
that you have. The complexity of the schemes is illustrated clearly
by the NAO. What is not clear, at least to me, is how effective
you are in delivering schemes against target. There are references
in paragraph 4.15 to the achievement of certain milestones towards
some of the basic targets. If you try to map across the whole
pool of opportunities available to encourage people into work,
are you able to quantify how you are doing in relation to the
pool of those who are currently not in education, employment or
training?
Stephen Marston: In relation to
the skills and training targets, the major ones relate to basic
skills in literacy and numeracy. We had an interim target for
2006, which was—
Chairman: Everybody has dropped their
voice now, so can you raise it?
Stephen Marston: I apologise,
Chairman. The target for literacy and numeracy is a 2010 target,
but the interim target that we had for 2006 was exceeded by some
way. Similarly, we have an interim level 2 target set for 2007,
which has been exceeded. More than 1 million adults have gained
level 2 qualifications. In the CSR (Comprehensive Spending Review)
that was published just last month, those targets rolled forward
again, and we are now hooking into targets that were set in the
Leitch Report for 2020. When we track progress over the past three
or four years, we know that we are doing what we set out to do
in that period. However, the trajectory gets steeper from here,
so the ambition in the targets remains enormous and there is a
lot to do to achieve all the way through to 2020.
Q76 Mr. Dunne: Is there something
that you can provide to us that would set that in context? Since
the NAO prepared the Report, we have had the CSR. Would it be
possible for our Report to be able to roll those targets forward,
so that we can lay out a timeline of what the targets are and
where you are against them?
Stephen Marston: Yes, I would
be happy to do that.[3]
Q77 Mr. Dunne: That would be helpful.
Thank you.
On 16 November the Department for Innovation,
Universities and Skills announced 7 million new training places.
There was some question mark about the extent to which they were
new or merely recycled. Could you help to clear that up by telling
us, to start with, whether you recognise that figure of 7 million?
Stephen Marston: I very much do.
The announcement was of the budget allocations in the CSR for
the three-year period through to 2010-11. We were saying that
that 7 million figure is the number of places that public funds
will support over the CSR period. It is rolling forward. We had
not previously known those figures and could not have said how
many places we would be able to buy with the CSR budget. That
was the significance of the 7 million figure.
Q78 Mr. Dunne: How many of those
are new or additional places compared with what was funded before
the CSR?
Stephen Marston: There is a rebalancing
going on within those figures. In this CSR we have identified
clearly the priorities for investing public funds, so we are putting
in additional funds to pay for additional places in literacy and
numeracy, in full level 2 and level 3 programmes and the apprenticeships
programme.
Q79 Mr. Dunne: So you could quantify
for us, again in a tabular form, how many of the places that add
up to 7 million are in each of those categories—apprenticeships,
online courses, college courses and so on. You could also show
for us, perhaps, those that applied under the previous CSR and
those that are new going forward.
Stephen Marston: We can certainly
project the distribution of funds and the level of places paid
for under the previous CSR and the next one, yes.[4]
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