Examination of Witnesses (Questions 60-79)
DEPARTMENT FOR
WORK AND
PENSIONS, JOBCENTRE
PLUS & LEARNING
AND SKILLS
COUNCIL
WEDNESDAY 24 OCTOBER
2007
Q60 Mr Bacon: Further on, on page
21, it indicates that one in five refuse all assistance. Does
that include money? Do they refuse the money you offer them?
Ms Strathie: That refers to the
support that we offer to help them get back into work.
Q61 Mr Bacon: But they do not refuse
money?
Ms Strathie: No.
Q62 Mr Bacon: Money is obviously
a form of assistance. They are not refusing the money that you
are offering?
Ms Strathie: If a lone parent
is in receipt of income support and we bring them in for a work-focused
interview and explain to them the support that is available, they
still may say: "I want to stay at home and look after my
children," or: "There is a very good reason why I do
not want to avail myself of that opportunity at the moment."
Q63 Mr Bacon: I am really asking
about the money, I just want to be clear. You just answered a
question that I had not asked. Nobody to your knowledge refuses
the money that you offer them?
Ms Strathie: To my knowledge nobody
refuses the income support that they have claimed and are receiving
as a result of this.
Q64 Mr Bacon: It does not surprise
me, I have to say. This may be a better question for Sir Leigh.
It is claimed that there are many people among this group who
would like to work but cannot. It could be for the reasons we
have seen in the Report—disability or poverty of skills
or lack of child care is a very good one. Another reason is that
they have been on benefit for a long time and they just do not
believe anything is possible. There must come a point, though,
where there are some who actually rather than wanting to work
but find it difficult just do not want to work. What work have
you done on trying to assess the size of that group, people who
just do not want to work?
Sir Leigh Lewis: Over the years
we have done a lot of analysis of worklessness. I think it is
fair to say that our benefit system divides currently into benefits
of two kinds: one where there is a requirement to be available
for work and actively seeking it as a condition of receiving the
benefit, and that is fundamentally unemployment benefits, Jobseeker's
Allowance; and the other is where at the moment there is not a
requirement to be actively seeking and available for work, and
that is lone parents on income support as lone parents and people
on incapacity benefit. That is why the Government has been seeking
to do ever more to encourage people to understand the benefits
of work and to put more incentives in their way. It is also why
in answer to the Chairman's question I set out the steps which
the Government is taking particularly as regards lone parents,
or is proposing to take—the consultation process is not
yet over—in a sense to change at a certain point the presumption
as to whether somebody should be able as a lone parent draw to
benefit without any commensurate obligation to seek work.
Q65 Mr Bacon: What about my question,
which is how many? You may not know the answer.
Sir Leigh Lewis: No.
Q66 Mr Bacon: Of the group of something
like 4.2 million adults in 2.4 million households how many of
them, do you estimate, just do not want to work? Have you done
opinion poll work on this?
Sir Leigh Lewis: I will see whether
we can help you and write to you. I certainly have not got an
answer to that in my head as you ask the question. [6]
Q67 Mr Bacon: There is no aspect of compulsion
among this group at all at the moment, is there?
Sir Leigh Lewis: There is compulsion
in a number of senses, so let me just be clear. If you are claiming
Jobseeker's Allowance there are a number of absolute obligations
in the system, and those claiming can be sanctioned if they fail
to meet those obligations. For those who are claiming other benefits,
work-focused interviews are a requirement, and if you fail to
attend a work-focused interview without good cause then you can
be subject to a loss of benefit. At this moment there is not a
requirement to then avail yourself of the assistance beyond that
but that, as I say, is an area where if you look again at the
Government's Green Paper In work, better off you will see
that the Government is making a number of proposals in that respect.
Q68 Mr Bacon: Yes, I have got a copy
of that here. I would like to ask Mr Haysom a question because
plainly a lot of this does revolve around skills, but skills can
mean so many different things. To me it means the ability at a
high level to read, write and count, and that will get you to
most of the other things you need in one way or another if you
have got those. My Chairman has just given me a note to say my
time is up, but feel free to expand as much as you like because
I am not allowed to ask any more questions but you are allowed
to answer! If you were to try and sum up in a nutshell what the
skill problem is, I know it is a big question to cope with in
a few sentences, where does the central skill problem lie?
Mr Haysom: That is a big question
to answer in a few sentences. Let me come at it this way: we know
absolutely that if you have got basic skills and a Level 2 qualification
you are more likely to be in work, you are more likely to stay
in work with a sustainable job and, critically importantly, you
are more likely to progress in work and get further training in
work. I think the evidence for all of that is incontrovertible,
so that is why the Government and the Learning and Skills Council
on behalf of the Government is putting so much effort and so much
of its resource and energy into basic skills and into Level 2
activity, so that is why it focuses there. I think the evidence
for that is absolutely clear.
Mr Bacon: Would you mind sending us a
note on some of the background. I am sure it is incontrovertible
but it would be helpful to include it as evidence in our Report.[7]
Q69 Chairman: Mr Mitchell and Mrs Browning
want to ask further questions but I put it to you right at the
beginning that very few of these schemes, in effect, make a profit
in terms of you get people back into work and therefore you do
not have to pay them benefit, and you rather pooh poohed that
idea. Let us look at this in rather more detail. Let us look at
figure 1 on page seven: "The main employment programmes that
people from workless households can access", we see quite
large figures, for instance New Deal for Partners, the cost per
job is £2,300, New Deal 25 Plus, the cost was £3,530
per job; Employment Zones for some reason is £4,700; for
some reason New Deal 50 Plus only cost £435, which gives
hope to us 30-year-olds! If we now look at figure 21 on page 41,
you will see the net benefit cost to the Exchequer per participant
and there are only two schemes that actually make a profit. Not
surprisingly, New Deal 50 Plus makes a profit and New Deal for
Disabled People, which is very encouraging, makes a profit. But
let us look at all the others. New Deal for Lone Parents, minus
£40; New Deal for Partners, minus £1,100; New Deal 25
Plus, minus £360, and so on and so on. You just cannot deny
that, with the exception of just two of these programmes New Deal
50 Plus and New Deal for Disabled People, you are making on all
occasions a loss, and on some occasions a very substantial loss
per job. I am sure it is very good for them but we are not an
ordinary select committee, we look at value for the taxpayer;
what is cost-effective for the taxpayer and this, frankly, if
you look at these figures closely, is not effective for the taxpayer.
Sir Leigh Lewis: Will you permit
me to give quite a substantive answer?
Q70 Chairman: As long as you like.
Sir Leigh Lewis: First of all,
let me in turn point to paragraph 5.7 in the Report which does
make the specific point that in those costings only employment
outcomes are recognised. "Some positive outcomes are not
identified as benefits in the current framework—for example,
a person who had previously been inactive gaining the skills and
confidence to actively look for work ... " and it continues,
so the benefits that are accrued and assessed there are those
arising to some but not all parts of government. Our employment
programmes do generate many other benefits, tackling poverty,
reducing reoffending, delivering improved quality of life.
Q71 Chairman: Of course I accept
that they are good for tackling poverty and reducing offending,
they are good for the family, and it is good to have somebody
in work. I am just trying to work out and get to the nitty-gritty
of the actual money involved and whether it is worth our while
as an oversight committee on behalf of taxpayers to say that these
schemes are actually delivering value for money.
Sir Leigh Lewis: I genuinely believe
it is. I do not want to go through every single scheme because
some are better value for money than others.
Q72 Chairman: Take as long as you
like, it is your chance to defend them.
Sir Leigh Lewis: Let me take three,
which I did not want to bore the Committee with before, where
we have got really robust evaluation evidence. The New Deal for
Lone Parents, Independent Research 2003, Centre for Analysis of
Social Policy at Bath University estimated that the New Deal for
Lone Parents provides a net gain to society of nearly £4,500
per job.
Q73 Chairman: How did they come up
with that?
Sir Leigh Lewis: I would have
to go through the entire research methodology that was used.
Q74 Chairman: You cannot just come
up with some research organisation somewhere says it is a net
gain of £4,000. All we can do is look at the facts and the
figures contained in the Report in front of us. You will have
to try and do better than that.
Sir Leigh Lewis: I think in fairness,
Chairman, what I am trying to do is take the point which the NAO
Report itself makes that these are only the first order benefits
that are assessed and say that we have conducted, or had conducted
on our behalf, fairly rigorous evaluation evidence which has made
an attempt to look at the wider benefits to society as a whole
of those programmes. In the case of New Deal for Lone Parents,
New Deal for Young People and New Deal for Disabled People those
research reports conducted by acknowledged experts (all of which
are public and published) have set out that the overall benefits
to society as a whole from those programmes are significant and
are positive. If you take, say, reducing reoffending, as you know,
because I appeared before you in that guise, I spent three years
in the Home Office, we know that there is an association between
worklessness in some cases and a proclivity and a propensity to
commit crime. Crime causes enormous cost to society—the
direct costs to the policing of society but also to the victims,
et cetera, et cetera, so if a consequence of these programmes
is in some cases to reduce reoffending that has very real and
tangible benefits to society.
Q75 Chairman: That is one example.
So you can back it up with facts and figures, can you? I bet you
cannot.
Sir Leigh Lewis: Those studies
will have tried to assess the overarching benefits to society
from these programmes. Chairman, this is difficult. I do not want
to pretend that this is an easy science to do. It is not easy
to extract, prove and quantify all of those benefits. One is in
the business of making assessments and analytical judgments, but
more than any other major Western nation—and that has certainly
been backed up by the OECD in looking at our employment programmes—we
have sought to arrive at quantification of their overarching benefits.
Q76 Mr Mitchell: I think their value
to society is such that these schemes would be justified even
if the loss, so-called, was bigger. If you had commissioned Mitchell
Research Services to prove that I would have undoubtedly proved
it for you, at less expense! My question is whether it is sustainable
because the Government wants to get 80% employment, which seems
to me an unattainably high figure when you bear in mind that the
bulk of the spending now is on people on Jobseeker's Allowance,
but to get to 80% we are going to have to get into 0.3 million
lone parents, one million older workers and one million incapacity
benefits claimants. That is going to be very difficult to do,
if not impossible actually. Firstly, is it an unattainable target
and, secondly, if you do try it you are going to need a lot more
money, are you not?
Sir Leigh Lewis: We have set it
out as an aspiration just to be clear, rather than a target. I
certainly do not think it is unattainable. I certainly do think,
and so does the Government and so do ministers, that it is tough
and it is going to be very challenging to attain it but, no, I
do not think it is unreachable. You are absolutely right, it will
mean that as well as continuing to reduce unemployment in its
classic sense as far as is possible it will also mean doing more
to support people who are currently on incapacity benefits or
not working because of incapacity, and lone parents. It is also
about helping—which is something we have not talked about
today and it does not feature prominently in the Report—older
workers and helping people to see the benefits of staying in work
for longer, or not retiring as early as they might have done so,
yes, this is going to be tough and challenging but yes it is attainable.
Q77 Mr Mitchell: I would just offer
the observation that if we were coming from an economy with a
higher rate of growth, say we were Chinese, we would have a much
better chance of achieving that target. That is just a thought.
What are the figures on stickability? You get people jobs, you
help them back into work; how long do they stick it? Do you have
figures on whether they are more likely to pull out of that job
or give up than other workers?
Sir Leigh Lewis: Let me give you
the example of the Pathways programme, which we have talked about,
and we could probably give you further examples, which has been
very heavily evaluated in its pilot phase. After six months we
were seeing about an 8% difference in the number of participants
who had gone through that programme who were in jobs compared
to those who had not gone through the programme. That was 8% better
at six months and at 18 months it is 7.4%, so that suggests actually
that it is being sustained and when you consider the inherent
difficulty of that group and the barriers they face that does
suggest that, yes, there is a sustained effect.
Q78 Angela Browning: I wonder, Sir
Leigh, if you could look at page 41, table 21. I wanted to ask
you about the New Deal for Partners and the figures on that line
there. According to this there have been 61 additional jobs and
per additional job is estimated to have cost £76,540. Are
you going to pursue this policy?
Sir Leigh Lewis: I think I said
in answer to an earlier question that nobody on this side of the
table was going to say that the New Deal for Partners, which has
been one of the smallest of the New Deal programmes, has been
a spectacular success to date; it most clearly has not.
Q79 Chairman: You can say that again!
Sir Leigh Lewis: It most clearly
has not. What I did say is that we are seeking to look hard and
we think one of the reasons why it has not been a success to date
is because we have tried to attract people into it from one single
interview. And what is I think abundantly clear is that that simply
is not enough, so as from next April there will be interviews
with partners for whom a claim is being made every six months
as one very significant change to that programme.
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