Examination of Witnesses (Questions 1-19)
DEPARTMENT FOR
WORK AND
PENSIONS, JOBCENTRE
PLUS & LEARNING
AND SKILLS
COUNCIL
WEDNESDAY 24 OCTOBER
2007
Q1 Chairman: Good afternoon and welcome
to the Committee of Public Accounts where today we are considering
the Comptroller and Auditor General's Report, Helping people
from workless households into work. We welcome Sir Leigh Lewis,
the Permanent Secretary of the Department for Work and Pensions;
Lesley Strathie, who is the Chief Executive of Jobcentre Plus;
and Mark Haysom, who is the Chief Executive of the Learning and
Skills Council. Perhaps, Sir Leigh, I will address my remarks
to you but you can pass questions over if you do not want to answer
them. Would you like to start by looking at the Comptroller and
Auditor General's Report. If you look at page 43, figure 22. you
will see that the job entry rate for the New Deal is declining.
Only a small percentage of lone parents take part in the programme.
How are you going to achieve your 2008 target?
Sir Leigh Lewis: I think by working
hard, Chairman. I think this is a classic case where this bottle
is half full or half empty. I think the half full picture, if
you look at the New Deal for Lone Parents, is this is a New Deal
which has helped increase the lone parent employment rate from
under 45% to over 57% in a decade, and that is a truly remarkable
generational shift. We have seen over one- third of a million
more lone parents in work over that period. I think it has been
a programme which has been in many ways a tribute to the staff
who have helped deliver it and to its concept, but the other side
of that coin is there is much more to be done.
Q2 Chairman: Can I interrupt for
a moment. Nobody denies that more lone parents are getting into
work but just how effective have these programmes been? They cost
more, do they not, to get people into work than what you save
in benefit?
Sir Leigh Lewis: The figures that
are given in the Report look only at the very direct costs and,
as the Report itself says, there is a whole set of further benefits
to society which is there and which is not immediately capable
of being captured. If you take the New Deal for Lone Parents itself
independent research in 2003 by the Centre for Analysis of Social
Policy at Bath University estimated that that programme provides
a net gain to society of nearly £4,500 per job, so actually
I think that many of these programmes are very successful looked
at in economic terms, but I think they are also hugely successful
in social terms as well. That certainly does not mean that they
are as successful as they could be or that there is not much more
to be done.
Q3 Chairman: Exactly, because if
you are going to achieve your 80% employment target you have to
go out and find people in the marketplace, have you not?
Sir Leigh Lewis: Yes we do.
Q4 Chairman: Are you doing that?
You do not seem to have any strategy for outreach?
Sir Leigh Lewis: No, I think that
is not the case. I think we are increasingly reaching out into
communities to attract more people onto those programmes, and
increasingly successfully. If you look at the City Strategy for
example, which is a very major and innovative development operating
through 15 areas, working with a whole range of partners in very
innovative ways, I think we are seeking to reach out and attract
more people, but this is difficult. By its definition, as the
Report makes clear, some of the people we are seeking to work
with are hard to reach.
Q5 Chairman: If we look at this appalling
figure 10 on page 21, it is entitled "Very few partners enter
the New Deal for Partners Programme" and 100% are identified
as candidates for work-focused interviews; under half are booked
for interview after contact is made; around one in three actually
bother to attend the interview; one in five refuse all assistance;
and around 3% go on the programme. That just suggests to me that
a lot of this is wasted effort.
Sir Leigh Lewis: I do not think
any of us this side of the room, Chairman, are going to suggest
that the New Deal for Partners has been one of our most successful
programmes hitherto. You only have to look at the numbers, as
you say, who have entered the programme and the numbers who have
gone through it and gained jobs to know that it is clearly not
a programme that has had anything like the success—
Q6 Chairman: So you are scrapping
it now, are you?
Sir Leigh Lewis: No, we are not
scrapping it actually; we are seeking to improve it. One of the
features that has made it less successful than it might have been
is that the gateway onto it, if you want to call it that, is a
single work-focused interview. All our experience is that that
is simply not enough to attract onto a programme people who are
intrinsically going to be hard to attract and hard to persuade,
so from next April there will actually be work-focused interviews
every six months for eligible partners for that programme.
Q7 Chairman: Let us look at one city
shall we, Glasgow, which is mentioned in paragraphs 1.11 to 1.12.
You see there are 125 organisations delivering more than 300 individual
programmes in one area. How can there be any kind of coherent
and effective service when you have got this sort of situation?
Sir Leigh Lewis: I think it is
the case that out in locations there are a lot of individual groups
and there are a lot of organisations and it is a challenge to
ensure that we have a joined-up and cohesive service. That, however,
is why in particular we are working through local Strategic Partnerships,
and Jobcentre Plus—and Lesley Strathie may want to comment—is
a core member of all the 146 top-tier local Strategic Partnerships
and also why the City Strategies, which are absolutely an attempt
to join up all the key local players, are so important.
Ms Strathie: I would endorse that.
I think the real challenge now for Jobcentre Plus and our customers
to help them back into work is to join with other organisations
to ensure that the end-to-end system delivers all of the needs
of the customer to remove the many barriers that lone parents
in particular face (and partners because both adults are benefit
recipients) and we do that in partnership rather than through
our own programmes in isolation.
Q8 Chairman: It says here that the
City Strategy aims to give local stakeholders more freedom to
meet local needs. That sounds very fair, does it not, but in fact
it is not flexible, is it?
Sir Leigh Lewis: I think it is
pretty early days, Chairman, to draw any kind of far-reaching
conclusions on City Strategies, which have barely entered their
delivery phase. One of the things we have done in part in relation
to the City Strategy programme is we are supporting them with
over £30 million from the DWP's Deprived Areas Fund precisely
to give them local funding and discretionary funding. Secondly,
we have invited them to bring forward the flexibilities which
they would like to see. One result of that already for example
is work trials in the City Strategy areas can now run for six
weeks rather than three weeks. I think we are in danger of trying
to judge an initiative which has barely been launched. Having
been out to City Strategy areas, I am particularly optimistic
about it.
Q9 Chairman: So this scheme is cost-effective,
is it?
Sir Leigh Lewis: I think if you
take the Government's overall employment programmes, very much
so.
Q10 Chairman: I am not just saying
it is cost-effective because more lone parents are getting into
work, we all recognise that, but I go back to my original comment,
this is largely due to the success of the economy and very little
to do with your programme?
Sir Leigh Lewis: No, I just do
not accept that, I am afraid. Of course the macro economy has
been a major feature, but every evaluation we have done—and
I could give you equal evaluations for the New Deal for Disabled
People and the New Deal for Young People, I just do not want to
bore the Committee and take overmuch of your time—have shown
that there have been major overarching benefits from those programmes.
I think one thing which we should take some pride in is we evaluate
these programmes more extensively and more comprehensively than
probably any other comparable country.
Chairman: Thank you for that. Mr Dunne?
Q11 Mr Dunne: Sir Leigh, it says
on page 20, paragraph 2.3 that since 1998 over 2.9 million individuals
have started on one of the New Deal programmes. Are you able to
tell us how many of those are still on the programme?
Sir Leigh Lewis: By their very
nature, these are not programmes which have a duration which would
go throughout all of that time, but I can tell you for example
that over three-quarters of a million people have gone into work
through the New Deal for Young People and very, very substantial
numbers have gone into work through all of our New Deal programmes.
Q12 Mr Dunne: I can see that set
out in figure 1 on page 7, but are you able to tell us how many
of the 2.9 million are now in work?
Sir Leigh Lewis: No, we cannot
do that because some of these programmes have been running now
for ten years and it would be impossible to trace, without quite
extraordinary effort, every single individual as to what has happened
to them over all of that period. As I say, when the evaluations
have been carried out, in every case they have shown that there
is real and substantial benefit. Just to mention, for example,
one programme which we are extending, which is the Pathways to
Work programme; our latest evaluation shows that at the 18 months
stage, 7.5% more people are in work than in those areas where
the programme has not run, so there is very substantial evidence
that for many of these programmes they do have a lasting and durable
effect.
Q13 Mr Dunne: That is what I was
trying to get to and I am pleased that you have got at least one
of the programmes where you are able to make that assessment,
because one of the criticisms of the New Deal is that people go
on a programme, they then come off the programme and they are
back in the same position as they were when they started. They
are not going on programmes that actually get them into durable
and sustainable jobs. What have you done to try to address that
criticism and to assess how worthwhile these programmes are?
Sir Leigh Lewis: What we have
done is pretty fundamental evaluation, and Lesley Strathie may
want to do a little bit more. It is absolutely the case that some
people who have left those programmes have come back onto them
and have lost their jobs or have left jobs, et cetera. It is really
quite important to say because both Lesley currently as the Chief
Executive of Jobcentre Plus and I as the former Chief Executive
of Jobcentre Plus have seen this at very close quarters—sometimes
it is not a failure when somebody leaves a programme, goes into
a job and comes out of that job. It is not necessarily the most
desirable outcome but they will then have a work record where
they may have had none before, and very often they will return
to another job much more quickly than they would have done had
they not been on that programme in the first place.
Ms Strathie: For many people,
short-term work is a stepping stone. It is a means of acquiring
skills and that work record, but we do have a proportion of those
customers who are in and out of work too frequently, and part
of the challenge for the future is for us to have a much more
flexible approach and, hopefully, to be able to identify those
customers most at risk and to be able to pick them up for early
entry for additional help when they come back on to claim Jobseeker's
Allowance again.
Q14 Mr Dunne: Have you started keeping
statistics on this re-entry process that you have just described?
Do you have any feel for what proportion of the 2.9 million individuals
are second-timers? Are these all first time courses or does it
cover those who have gone on to a second course?
Ms Strathie: I could not give
you the figures straight off the top of my head and they would
be on the basis of sampling rather than hard numbers. We do not
collect data on everybody who is a repeat customer. We do know
that there is a core for whom moving them into sustainable employment
is still a challenge and that it is not just a challenge of getting
work but of acquiring the skills and remaining in work. We could
write to you with the information you have got. [1]
Q15 Mr Dunne: If you have got some analysis
I think that would very helpful because it might help to counter
this criticism. When somebody presents as having a need for retraining
or a need for re-employment, when do you start counting them in
your statistics as somebody who is unemployed?
Sir Leigh Lewis: The very simple
answer is that we count them from effectively the first day that
they make a claim to the relevant benefit, so if you take Jobseeker's
Allowance from the day that someone makes a claim they are counted
as a claimant of that particular benefit.
Q16 Mr Dunne: Right and what is the
longest pre-qualifying period of any benefits before you are counted?
Is DLA (Disability Living Allowance) the longest; is that a six-week
period?
Sir Leigh Lewis: DLA is rather
a different benefit and not one of the ones that we are particularly
focused on here, but normally there is no pre-qualification period
in the sense that if you believe you meet the conditions for the
receipt of that benefit, you can claim it, and normally you will
be counted either from the point at which you claim it or the
point at which benefit is awarded.
Q17 Mr Dunne: When I was on the Work
and Pensions Select Committee we did some work in Holland with
agencies there who told us that early intervention for people
who are out of work is the most effective in getting them back
into work. The criticism has been levelled against this country
that we do not take early action quick enough and that when somebody
has been out of a job for four to eight weeks, it is going to
take much longer to get them back into employment than if we can
get them starting to get the benefit of programmes or advice as
quickly as possible.
Sir Leigh Lewis: Two things, I
will do them in headline terms and then Lesley Strathie may want
to add to them. First of all, at the point where you make a claim
to Jobseeker's Allowance for example, which is what typically
somebody who has lost their job will do, there will be an in-depth
interview with one of Lesley Strathie's advisers at which there
and then there will normally be an attempt to identify any suitable
vacancies, and the drawing up of a jobseeker's agreement setting
out the steps that they will take and we will take to help them
to find work. Before that, which is not the case of every individual
person losing their job, in any areas where there is a substantial
job loss which is known to Jobcentre Plus in advance, Jobcentre
Plus will normally, co-operating with the employer, make a major
effort to put people's support and advice in, working often with
the Learning and Skills Council and other agencies, before those
employees are actually made redundant and lose their jobs, with
the aim of avoiding them ever having to claim. Lesley may want
to say more about both of those.
Ms Strathie: I think that is right.
In the first instance when people make contact to make a claim
for Jobseeker's Allowance there is a work-focused conversation
at that point, including very often, where it is appropriate,
we arrange a job search for them by telephone. They then do have
to come into the Jobcentre.
Q18 Mr Dunne: Could I stop you there.
In figure 11 on page 22, which has been referred to before, less
than one-third of those eligible clients have initial work-focused
interviews. If that is the first step, it is only affecting a
third of the potential claimants. What is happening to the other
two-thirds?
Sir Leigh Lewis: That, if I may
say so, is a slightly different issue because here we are looking
out to the Pathways to Work programme, and the Pathways to Work
programme is a particularly specialised programme because it is
looking at people who are claiming incapacity benefit and, by
definition, they tend to have a greater range of barriers which
are going to stand between them and an early return to work. That
is why we are so optimistic about that programme because the Pathways
programme, which we will be rolling out nationally as from next
April, for the first time puts in place a joined-up range of serious
interventions to help new claimants to incapacity benefits get
back into a journey towards work, and it appears, from some pretty
robust evaluation evidence, to be working.
Q19 Mr Dunne: I think it is in fact
incapacity benefit that you cannot claim for the first six weeks,
is that not correct, and therefore you are not actually getting
to them quickly enough?
Ms Strathie: For the first six
months eligible people would be claiming statutory sick pay. They
come to us after that for incapacity benefit. In the past, you
would simply have had a medical certificate and claimed the appropriate
benefit. What we do now is at that initial stage we have a work-focused
interview unless, as you say, the third that you point to, it
is not appropriate for a work-focused interview, for example if
somebody is very seriously ill and possibly even terminally ill
we would not have a work-focused interview with them.
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