Examination of Witnesses (Questions 1-19)
DEPARTMENT FOR
WORK AND
PENSIONS AND
JOBCENTRE PLUS
31 MARCH 2008
Q1 Chairman: Good afternoon. Welcome
to the Committee of Public Accounts, where today we are considering
the Comptroller & Auditor General's Report on Department for
Work and Pensions Increasing employment rates for ethnic minorities,
and we welcome back to our Committee Sir Leigh Lewis, Permanent
Secretary of the Department for Work and Pensions. Perhaps you
would introduce your colleagues, Sir Leigh?
Sir Leigh Lewis: On my right is
Nahid Majid, who is the Deputy Director for Area Initiatives and
Communities in the Department, and on my left is Chris Hayes,
who is the Director for London for Jobcentre Plus.
Q2 Chairman: Perhaps I can introduce
my questions for you and, if you want to pass them over, you can
do so. If we look at page 13, figure 2, the economic inactivity
rates of ethnic minorities and the overall population, we can
see pretty well a flat line, with about a third of the ethnic
minority population inactive, about a third in 1997 and about
a third now, and if we go to paragraph 1 on page 6 we read there
that the gap costs the economy some £8.6 billion annually,
just 1.3 percentage points lower than the level in 1987. That
is dealing with employment rates. So you have obviously made a
lot of effort over the last ten years, nobody denies that, but
what is going wrong?
Sir Leigh Lewis: This is a tough
and difficult issue, Chairman, and it would be absolutely wrong
to say otherwise. We have made some serious headway over that
period and if you take the two last Spending Review periods, we
hit our Spending Review 2002 target to close the employment gap
and to increase the employment rate as it affects ethnic minorities,
and we are on course to do so in relation to our SR04 target as
well. There is no doubt, however, that this remains a difficult
and challenging and multifaceted issue, and there is a very good
table right at the back of the Report showing a number of international
comparisons.
Q3 Chairman: I read that.
Sir Leigh Lewis: to show that
we are not remotely unique in western advanced societies in having
a substantial gap in both unemployment levels and employment rates
as between the white and indigenous population and ethnic minority
populations.
Q4 Chairman: You have made some progress,
you mentioned the last two Spending Reviews, but how much of that
is due to a strong economy and, now that we may be facing difficulties
in the economy, how are you going to cope with that? Are you claiming
credit for a following wind?
Sir Leigh Lewis: There is no doubt
that part of the success that we had has been as a result of stable
macro economic policies. There is a lot of evidence to show that
ethnic minority employment rises, and rises disproportionately,
when the economy is doing well, and that the rate tends to fall
disproportionately in a downturn.
Q5 Chairman: That is obvious but
I just wonder how much difference your initiatives made?
Sir Leigh Lewis: We believe that
there have been three factors at work. One has certainly been
stable macro economic policies.
Q6 Chairman: That applies to everybody,
of course.
Sir Leigh Lewis: It does, absolutely.
Secondly, effective mainstream labour market policies, and the
OECD and others have consistently complimented the United Kingdom
on that, such as the New Deal and the core Jobseekers' Allowance
regime, and there is no doubt that we believe that they have benefited,
both ethnic minority people and our mainstream employee labour
market, and, thirdly, our area-based policies, increasingly focusing
resource and attention and effort on those areas of the economy
where the employment rate tends to be lowest, unemployment tends
to be highest and inactivity levels, to come back to your very
first question, tend to be highest, and those areas tend to be
ones where there are disproportionately large proportions of the
ethnic minority population.
Q7 Chairman: If we look at the evaluation
of your various projects, which is summarised in paragraph 4.2
on page 36, we see phrases there such as stop-start and lack of
continuity. When are we going to have a consistent long-term strategy
to deal with this problem?
Sir Leigh Lewis: We have one,
Chairman, actually. It was one of the very few areas of any disagreement
between ourselves and the National Audit Office in relation to
this Report in that the National Audit Office said that our strategy
had lacked continuity. I do not think there is any doubt between
us that there was a particular period in the run-up to the launch
of the Deprived Areas Funds where there were some transitional
difficulties, but I think we have been following now as a Department
a pretty consistent policy for at least the last three years focusing
increasingly our effort, resources and commitment on those areas
both where overall concentrations of worklessness and unemployment
are highest but also where disproportionately larger proportions
of ethnic minority people both live and work. I think that policy,
which is going in a sense to go to a new level with the creation
of the Working Neighbourhoods Fund from this April with one and
a half billion of committed expenditure over three years, is a
consistent long-term directional policy.
Q8 Chairman: If what you say about
the continuity of your programmes is right, why do we read in
paragraph 4.12 that, for instance, the Ethnic Minority Outreach
programme was discontinued in 2006, why has the City Strategy
not been rolled out nationwide?
Sir Leigh Lewis: Let me take those
two separately, because they are rather different. A number of
the pilot programmes we had here and which the Report comments
on were just that, pretty small-scale pilot programmes which were
never announced or intended as going nationwide, and we learnt
lessons from them all. Nevertheless we concluded, very clearly
from around 2006 onwards, that the long-term direction of travel
was to focus on the big areas of disadvantage, and that is the
City Strategy. The City Strategy was never intended to be a nationwide
programme. The City Strategy is very much a programme which is
targeted at areas where there are disproportionately large amounts
of worklessness. Just to give you one indication of what I was
speaking about, the fifteen City Strategy Pathfinders comprise
in total about 10% of the working age population, but they also
include within them over 40% of the total ethnic minority working
age population, so it is a very deliberate example of our strategy
being targeted on those areas where both worklessness overall
is disproportionately concentrated but worklessness amongst ethnic
minority people is even more concentrated.
Q9 Chairman: In your answer you pass
quite quickly over these pilot schemes—"Well, that
was something we did and we did not want to follow it through"—but
after spending £40 million on them, which we see from paragraph
2.7 on page 23, what have you learnt from them?
Sir Leigh Lewis: I think a lot,
and in relation to 2001 there were clear lessons learnt and of
course achievements in that period from each and every one of
those pilots. But they were pretty small scale and would never
on their own have done a huge amount to dent the employment gap
that, as you pointed out in your very first question, continues
to exist between the overall working age population and the ethnic
minority working age population, so I do think we learnt lessons,
but I do not think more widely we should ever be wholly apologetic
about trying some things on a relatively small scale to see what
works, what does not, and to learn the lessons.
Q10 Chairman: Do you agree with your
staff who say, and this is in paragraph 3.8 on page 31, "
. . . in all the six case study conurbations we visited, where
there are high concentrations of ethnic minorities, Jobcentre
Plus staff told us that discrimination by employers was not a
major barrier and was rarely reported to them". Do you agree
with that?
Sir Leigh Lewis: It is certainly
true it is rarely reported to them. We know that the number of
reports that are made to Jobcentre Plus total around 80 per month,
though the Report does most certainly say that, where it is reported,
Jobcentre Plus takes greatly effective action. I do believe discrimination
is a very serious issue, to be absolutely clear. All the evidence,
and there is a lot of research evidence.
Q11 Chairman: So these people are
out of touch, are they?
Sir Leigh Lewis: No, they are
not out of touch; they are in touch with their reality. The issue
is whether they are having discrimination reported to them or
whether they are seeing it in their day-to-day contacts with job
seekers and others, and I think they are reporting back very faithfully
what they see and, as I said, there is a relatively small number
of allegations of specific discrimination reported back to Jobcentre
Plus month-by-month, but all the research estimates that up to
half of the overall gap between the ethnic minority employment
rate and the overall employment rate is attributable to discrimination.
Q12 Chairman: There is a particular
problem with some communities. One report which was given to me,
and one should obviously not take this as Gospel, was that 72%
of Bangladeshi children live in poverty, so obviously there is
a particular problem with the Bangladeshi community. How proactive
are you being, and how focused are you? This is much less of a
problem with the Indian communities, I think.
Sir Leigh Lewis: I will perhaps
ask Chris Hayes, who is the Director for Jobcentre Plus for London,
and London contains a very large proportion of the Bangladeshi
community in this country, to say something about that.
Mr Hayes: There are a number of
examples where we engage with particular groups and we perceive
particular problems engaging with the mainstream services. I can
think of two programmes in London, HopScotch is one in central
London, where we aim a particular programme at the Bangladeshi
community and Bangladeshi women, and there are a number of others
where we, through the community organisations, try and understand
why they sometimes are not engaging, what the issues are, and
how we can help them move into training or into work.
Q13 Chairman: One last question from
me. We have concentrated a lot on the ethnic minorities and the
minority community itself. What about employers? There is a very
interesting case study 2 here from Leicester, on page 25, who
seem to be quite successful when they go out in a proactive way
into the local business community and make progress. Are you learning
from this?
Sir Leigh Lewis: We are absolutely
up for this and absolutely up for contact with the employer. It
is, in a sense, the lifeblood of Jobcentre Plus. It is its business.
Without employer contact its business does not exist, and we are
seeking proactively to encourage employers to widen their recruitment
pools and their recruitment practices, and where we do believe
that knowingly—which is rare—or unknowingly employers
have recruitment practices that may be inhibiting recruitment
of people from ethnic minorities, we really do want to work with
them very energetically indeed.
Q14 Keith Hill: I would like to take
up that last area by the Chairman about the importance of outreach,
particularly to the economically inactive, who are obviously amongst
the hardest-to-reach section of the communities, as the Report
says, and I agree with you that we ought to carry out pilots and
ought to take some risk. What do we learn from the ethnic minority
outreach programme?
Sir Leigh Lewis: Firstly that
it can work very well in individual cases, and that any attempt
to deliver our services in 2008 simply from behind desks in our
own offices will certainly not reach all of the people we want
to reach. I have seen only in the last month or so two very successful
examples of outreach in Jobcentre Plus. We took ourselves to a
children's centre in Stockwell last week, where Jobcentre Plus
staff are engaged in a children's centre supporting lone parents,
not exclusively from ethnic minorities but a very high proportion
of those taking advantage of this centre were from ethnic minorities,
and I spent a day myself with a charity for the homeless at Broadway
in West London where, again, Jobcentre Plus are in that charity
at one of its drop-in centres on an outreach basis. So what we
have learnt is that outreach is really important. Also, we have
learnt that to attempt to set down a set of rules for outreach
from a head office in London or Sheffield or, for that matter,
Edinburgh is not going to work. You have to let these things grow
organically at local level because it is at local level that people
know what kind of outreach is going to deliver most.
Q15 Keith Hill: I have prepared all
sorts of questions on the success of ethnic minority outreach,
but what is replacing that kind of programme now?
Sir Leigh Lewis: In one sense
I am not sure that anything is replacing it, in a sense I think
it is taking place, and we still have just a small programme continuing
for outreach for partners of ethnic minority people, but what
has changed is not that we were doing outreach and now we are
not doing outreach, to say that would be a complete misunderstanding
of the position; what has changed is that as part of our City
Strategy programmes, as part of the Deprived Area Fund, as part
of what is going to be the Working Neighbourhoods Fund, we are
trying to put far more of the decision-making and the resources
and control into the hands of local partnerships in key areas
where there are very high proportions of both workless and ethnic
minority workless people precisely so they can tailor outreach
programmes to the needs of those communities.
Q16 Keith Hill: Give me some examples
of the work, then, that is being done under this new decentralised
approach?
Sir Leigh Lewis: Well, just to
give you that Stockwell example, there is a children's centre;
it is providing regular two week courses for lone parents typically
who have been out of the labour market for some considerable period
of time. As it happens those courses are delivered in a children's
centre which happens to be adjacent to a local primary school
with also a day care centre on site, so it is a very effective
venue where lone parents feel very comfortable. What was very
interesting there was that, although the predominant proportion
of people on the course we saw and on the courses they are running
were from ethnic minorities they were not exclusively from ethnic
minorities, and I think that was a very good example. Perhaps,
again, I might look to Chris, who is closer inevitably to London
and individual projects, to say something about that as well.
Mr Hayes: There are a number of
examples. In general Jobcentre Plus advisers operate in most children's
centres, so we have programmes operating in areas where there
are high concentrations of customers. We have particular routeway
examples where we are working with ethnic minority communities
and with employers in the area to try and build a line of sight,
a path, between being out of work and, through training, into
work and there are numerous examples of where we are involved
with faith communities, because there are communities that we
cannot ourselves directly engage with or who may not want to engage
with us directly, so we need to go through intermediaries.
Q17 Keith Hill: Let me interrupt
you there, because one of the criticisms made by the NAO is that
in abandoning a programme like ethnic minority outreach you were
precisely putting at risk the relationships that Jobcentre Plus
has developed with community and voluntary organisations.
Mr Hayes: I see this as an evolutionary
approach in that we have tried a number of things to understand
how best we can engage with communities, and ethnic minority outreach
really outlined for us how it was important to go via representative
groups and community groups to get to the customers.
Q18 Keith Hill: But do you accept
the criticism that, by dint of abandoning a programme like that,
you are losing that involvement of voluntary and community sector
organisations in outreach.
Mr Hayes: It is true to say that
a number of programmes, because the funding was not there, were
wound up but the relationships remain. Some programmes were continued
and different funding streams were sought and agreed, but I think
the key lessons and the key achievements in those programmes were
to build relationships with local communities, and that has continued
through the Disadvantaged Ward Fund programme, it will be continued
through the Working Neighbourhoods Fund, and through the local
area agreements which we now agree with local authorities.
Q19 Keith Hill: Can I now take you
to specifically the economically inactive, those not claiming
benefits and the approach to those and to page 32, paragraphs
3.13-15 of the NAO Report, which deals with outcome targets? It
appears to me that, to say the least, there is some complexity
about the measures of success of these outcome targets and, in
particular, if you look at paragraph 3.14, it observes that 47%
of non employed ethnic minority people fell into Priority Group
4, where the incentives are considerably less, that is to say
the incentives for the Jobcentre Plus system to acquire points
in terms of its PSA target, et cetera. I need to obviously ask
you whether you are satisfied that a targets arrangement where
half the potential customers fall into the lowest priority band
can be justified?
Sir Leigh Lewis: I have sat on
both sides of the target setting regime, if you will, because
I was the Jobcentre Plus Chief Executive and, therefore, I was
responsible for delivering targets and as the Permanent Secretary
I am responsible for advising ministers on the targets, and for
any set of targets you have to work quite hard to get the right
incentive structure. The target structure we have for Jobcentre
Plus is a good one; it certainly resonates on the ground, there
is no doubt, with individual members of staff.
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