Examination of Witnesses (Questions 114-119)
IAN DUCAT,
RACHEL JONES,
TIM LEZARD
AND PAUL
LUCKEN
8 JUNE 2009
Chairman: Good afternoon. Will you identify
yourselves for the purposes of the inquiry and describe your organisations
briefly?
Rachel Jones: I am Rachel Jones,
District Manager for Jobcentre Plus covering the West of England
area.
Paul Lucken: I am Paul Lucken,
the Regional Director of Skills at the Learning and Skills Council.
We are responsible for post-16 learning in the south-west and
nationally.
Tim Lezard: I am Tim Lezard and
I am Chair of the South West TUC, which represents about 650,000
trade unionists in the region.
Ian Ducat: I am Ian Ducat. My
day job is Regional Secretary of Unison, but I am here substituting
for Laurence Faircloth from Unite. I am from the TUC Executive
in the south-west.
Q114 Chairman: Thank you for coming.
From each of your slightly different perspectives, would you tell
us where you are in managing the demands on your individual bodies
at present?
Rachel Jones: To give the picture
of what has been happening across the south-west: we have seen
a rise of 139% in unemployment over the past 12 months, whereas
the national figure has gone up by 86%. Jobcentre Plus has been
doing several things to support people who find themselves in
redundancy positions, and to cope internally with that situation.
We have been recruiting staff to keep up with the pace of change
and the economic downturn. In May 2008, we were employing just
over 4,000 staff across the south-west region; by May 2009, that
had reached 4,700; and by the end of March 2010, we expect staffing
to have increased to about 5,200. We have also been looking at
our own premises to see if they are fit for purpose in the present
economic circumstances. Where possible, we have put forward plans
to expand our estates. We have also been working with partners
and providers to see how we can deliver services in a different
way through co-location and providing outreach where necessary
to cope with additional footfall. We have been considering how
we can make our internal processes more efficient and work differently
in order to cope with the increased demand on services. For example,
we have looked at getting similar groups of customers together
to provide information on a group session basis, rather than working
with them one-to-one. I am pleased to say that, despite rising
unemployment levels in the south-west, Jobcentre Plus is still
hitting all its key performance targets.
Q115 Chairman: Paul, can you give
the LSC perspective?
Paul Lucken: I suppose that the
main impact of the recession has been the need for us to shift
the focus of our primary service to employers. The Train to Gain
service has seen very significant growth over the past 12 months;
participation has doubled. Almost counter-intuitively, more people
got involved once the recession really started to bite—and
those were people who were employed. Employers are responding
by using down time or free time to utilise training funds to support
their employees. However, that programme is now under significant
pressure. We have flexed Train to Gain so that we can now help
those people who are facing redundancy, whereas previously Train
to Gain was primarily for those who were already in a job. That
came through with addition funds. We had a share of some additional
funds from the national pot and we have matched those with European
social funds. We have introduced a new provision, working very
closely with Jobcentre Plus, to help those who have been unemployed
for six months. While one might say that they are not the current
victims of recession, they are the people who are going to find
it harder to get back in to work. That provision was launched
in April and the process has been very rapid. The announcement
only came out about six weeks before the launch, so we had to
move quite quickly to develop the provision through our network
of further education colleges. Our general sense is that training
is part of the solution but that skills training has to now be
coupled with training to prepare people for entry or re-entry
into work, which is not the focus we had in the first few years
of our organisation. We are now having to reconfigure how we go
about helping people.
Tim Lezard: Obviously our members
have borne the brunt of the recession, particularly in the private
sector, although I am sure that Ian will tell you that we have
problems with the public sector as well because of the extra demands
placed on it because of the present circumstances. The TUC has
been working with the individual trade unions, obviously helping
them with redundancy. We have produced a guide about redundancy
and how to cope with it. We also work very hard with the unions
to prevent redundancies from happening in the first place, through
various other partnerships—Train to Gain, for example—and
other learning, because we would rather prevent redundancies happening
in the first place than have to work afterwards. We have been
working very hard with employers as well to ensure that people
are better trained and learn new skills. Nigel Costley, the regional
secretary, has also been working with Jobcentre Plus. More widely,
we have been lobbying the Government and other partnership organisations
to encourage employment in the region, in the hope that eventually,
when the recession finishes, there will be a more equal society
and better-paid jobs for everybody throughout the region.
Ian Ducat: I will mention just
two specific points. To supplement what Tim has said, we have
welcomed indeed the TUC championed this whole notion of the Future
Jobs Fund and we welcome the significant billion pound investment
in it. Clearly, we want to see it succeed. We are worried about
the possibility of job substitution as it develops. That is one
of the things that we need to talk about. We are really concerned,
however, that so far in the roll-out of the programme, the trade
unions, to all intents and purposes, have been neglected by the
Government Office. Unions, through the TUC, have responded to
not being involved in the preparation for the implementation of
the fund and are talking to the Government Office. We were involved
in discussions with Ben Bradshaw, the regional Minister, to identify
why there was no trade union involvement. That is continuing,
although I guess it will be with the new Regional Minister. We
have also been talking to the local authority employers to make
sure that the local authority trade unions are involved. There
is a tremendous opportunity for us to use this scheme—the
Future Jobs Fund—to plug gaps, help supplement skills and
so on, but we want to make sure that the quality of the projects
and schemes is right. That is where we think we can contribute.
My second point is that, as you know, the RDA is in the process,
as we speak, of telling some of its partners that some of the
projects they have been working on are being cut. With exquisitely
bad timing, as the recession developed, the RDA funds were cut
and the effects of those cuts in the RDA budgets are just being
passed on and announced to partners. If there is one thing the
Government need to do, it is to revisit the whole RDA funding
issue. We have not yet seen any official announcement about the
merger of the two departments, DBERR and DIUS, but I am sure that
the TUC will welcome that because of the number of problems with
the separation of responsibilities. We need to get these two—the
big policy areas—working together. Hopefully, there will
be an opportunity with the merged Department to revisit the funding.
In your previous session with the CBI and the FSB, our friend
Viv Rayner made the point very well that there is a need to ensure
that the RDAs have the resources. The south-west region has been
neglected, perhaps because of perceptions about the region's role
or lack of role, as the case may be, in manufacturing.
Q116 Mr Drew: May I pick up on
the issue of wage contributions? Rachel and Paul, you, perhaps,
were not in the room when I was quizzing the first panel of speakers,
but Tim and Ian were. The key thing, as far as I am concerned,
is that as we come out of the recession, we will have lost key
people and key skills, and our continental competitors, let alone
Wales, will be in a much stronger position. If we are to make
progress, how can we persuade Government that it is not a net
loss and a big cost, but a realistic response to keep people in
jobs, which we should not be losing, and give them appropriate
training and skills? It is well known that I have piloted the
scheme with Delphi and Renishaw, which is almost there but always
seems to be somewhere in the future. Starting with Paul, how can
the LSC, not withstanding that it will cost money you don't have,
move forward?
Paul Lucken: The issue of wage
subsidy, which is at the heart of your question, has been addressed
a number of times in recent months without a clear decision about
the value added it brings—in other words, the cost of the
wage subsidy versus the benefits gained. The Learning and Skills
Council is about training and developing individuals. Therefore,
to date, it has not been in our brief to operate straightforward
wage subsidy programmes, so we would not set out to create one
as a policy initiative. I suspect that that would have to be a
major intervention as part of the recession. I know that the costs
are extremely high and the time scales over which a wage subsidy
would need to be paid to retain labour mean that it could be a
very expensive provision. In terms of the Learning and Skills
Council, we have no brief or policy goal of introducing a wage
subsidy per se, and we do not have the funds to do so. Wherever
possible, we have tried to flex all of our provision to make it
that much easier for companies to utilise training resources that
they already have in-house. Delphi and Renishaw are very good
examples and I know that you have worked extremely hard to get
them there. It means that they are effectively using Train to
Gain funds to train their own staff. In doing so, they are deploying
their own resources more effectively, but it is not the same,
as you well know, as a wage subsidy provision.
Q117 Mr Drew: Rachel, before I
ask Tim and Ian to respond, what are your views on the applicability
of a wage contribution or subsidy in trying to prevent people
from coming to you?
Rachel Jones: There is nothing
really further to add to what Paul has already said. It is a question
more for Ministers than for the operational delivery part of the
organisation. From Jobcentre Plus's point of view, we have invested
time and resources into the rapid response funding used to support
Renishaw. That has supported people by looking at what skills
transferability they may have, helping them to seek different
avenues for training in the future and supporting them in CV and
other outplacement services.
Q118 Mr Drew: The TUC response?
Tim Lezard: The TUC response is
that we would support the wage subsidy. It is important to keep
people in work because it keeps the economy going. We are aware
that some businesses are struggling and need support. As you know,
I am a journalist by profession, and one thing that I would add
is that media companies in particular have been using the recession
as a smokescreen to get rid of a lot of the journalists. We all
know your situation, David, and it is the same in Bristol and
Plymouth; they are using it as an excuse to cut staff and we would
be wary of that. The TUC advice in these situations is that we
ask trade union members to check the company's accounts to ensure
that it is actually in need, rather than just complaining about
it.
Ian Ducat: I don't underestimate
the nightmare of the bureaucracy associated with trying to operate
such a scheme and the dangers of employers taking advantage, and
satisfying the complaints from employers who are not beneficiaries,
if you go down the sectoral base, as you talked about in your
earlier session. You only have to think about the outcry from
industry in the US when the motor industry was subsidised and
supported and others had to go to the wall. Governments cannot
win in this matter. However, as Viv Rayner said, they manage to
work and operate one in France and several other European countries,
so it is worth while pursuing, particularly if it affects our
competitive advantage, as the TUC believes it does.
Q119 Dr Naysmith: May I ask Rachel
a question? You were saying that demands are increasing on your
service and that the types of solutions you have been looking
for are at different levels from before. Have you enough resources
to deal with this extra demand and the greater difficulty of job
placement?
Rachel Jones: In terms of resources
within Jobcentre Plus, it has taken some time to recruit the additional
work force I talked about earlier, but the signs are that we have
got staffing levels about right to cope with the increased customer
volumes we are now seeing. Another challenge that the current
economic downturn has brought is the very different customer base
from the traditional one you might imagine seeing within Jobcentre
Plus. For example, we have seen an increase of about 168% in people
coming from professional executive occupations, not the customer
base that Jobcentre Plus has dealt with in the past. We had to
move quickly to put in place different support, help and services
for that particular customer group. One initiative we have taken
across the south-west is to work carefully and closely with HERDA,
who represent the university sector, who are used to giving graduates
guidance and information about what jobs might be available. We
have just started a pilot approach in Bristol with the four universities
across the west of England. They have put together a three-day
programme run by the careers service within the universities aimed
at professional executive customers. In the first week of the
pilot—just last week—we referred 25 customers and
23 turned up for the programme. It is acknowledged that it is
not just the numbers that are different for Jobcentre Plus; it
is the type of customer we are seeing and ensuring that we are
on the front foot to respond to that.
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