Work and Pensions Committee - Youth Unemployment and the Youth Contract - Minutes of EvidenceHC 151

Back to Report

House of COMMONS



Work and Pensions Committee

Youth Unemployment and the Youth Contract

Wednesday 23 May 2012


Evidence heard in Public Questions 1 69



This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.


Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.


Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.


Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.

Oral Evidence

Taken before the Work and Pensions Committee

on Wednesday 23 May 2012

Members present:


Debbie Abrahams

Harriett Baldwin

Andrew Bingham

Karen Bradley

Oliver Heald

Glenda Jackson

Brandon Lewis

Teresa Pearce


In the absence of the Chair, Oliver Heald was called to the Chair.


Examination of Witnesses

Witnesses: Ralph Michell, Director of Strategy, Association of Chief Executives of Voluntary Organisations (ACEVO), Tony Wilson, Director of Policy and Research, Centre for Economic and Social Inclusion, Katerina Rüdiger, Skills Policy Adviser, Chartered Institute of Personnel and Development, Dr Genevieve Knight, Head of Work and Social Policy Group, Policy Studies Institute, and Dr Rob Berkeley, Director, Runnymede Trust, gave evidence.

Chair: Welcome to this morning’s session. Our Chair, Anne Begg, is recovering but is not fit, and so she has asked me to take this morning’s session. We have a declaration from Harriet Baldwin.

Harriett Baldwin: I have had the pleasure of working with ACEVO on a report on an entirely voluntary basis, and I am also on the Board of the Social Investment Business, where the Chief Executive of ACEVO is my Chairman.

Q1 Chair: Would you like to introduce yourselves, perhaps starting with Ralph?

Ralph Michell: My name is Ralph Michell. I am Director of Policy at ACEVO, which is a national organisation representing leaders of charities and social enterprises in the country.

Katerina Rüdiger: I am Katerina Rüdiger. I work for the Chartered Institute of Personnel and Development as a Skills Policy Adviser, and we are representing the HR profession. We have done a lot of work recently on improving access to the labour market and pathways into work. This week, on Monday 21 May, we launched a campaign on engaging employers and tackling youth unemployment.

Tony Wilson: My name is Tony Wilson. I am the Director of Policy and Research at the Centre for Economic and Social Inclusion. We are a not-for-profit social enterprise that undertakes research and analysis, and supports organisations working with disadvantaged people in the labour market.

Dr Knight: I am Genevieve Knight. I work with the Policy Studies Institute; I am the Head of Work and Social Policy. I have conducted evaluations on the New Deal for Young People and I am also conducting the Jobseekers Regime, Flexible New Deal and Six Month Offer evaluations, which are still ongoing.

Dr Berkeley: Good morning. I am Rob Berkeley. I am Director of the Runnymede Trust, which is a race equality think-tank.

Q2 Chair: Just to start off with a fairly general question, the various statistical measures of youth unemployment all show some aspects that we are concerned about, but what is your take on what the various measures show as the current situation and what would you be most concerned about? Do you want to start, Tony?

Tony Wilson: Yes, of course. I think what we have seen is, clearly, a very large increase in youth unemployment, which began in the mid2000s with fairly small increases that ran through really until the start of the recession. Since then we have seen very significant increases, largely driven by the downturn, clearly, and, within that, driven by the fact that young people are more likely to enter and leave work, and therefore have been disproportionately affected by those changes in the labour market.

However, in addition, we have also seen-and, in particular, most recently-an increase in long-term youth unemployment, partly in the claimant count, and I think there are issues there that we will probably discuss about how that is measured, but also in the wider definition in terms of the surveybased definition of long-term unemployment. That would suggest that the cyclical issue may be starting to take hold as potentially a structural problem, with more people long-term unemployed now than at any point in the past, although as a proportion of the population, and when you take account of the growth in students as well, it is more or less in line with the aftermath of the 1990s recession.

In addition to that cyclical issue and the risks of that becoming structural, we have also seen larger increases in those areas that previously had the highest unemployment, which again is not entirely surprising but again points to the importance of targeting effort at those areas. As others will say, I think, there is an underlying issue, which governments have grappled with for 30 years or more, that at any point in time over the last 30 years there have been more than 500,000 young people unemployed and at least one in seven young people at any point in time not in education, employment or training (NEET). There are all sorts of reasons for that, and I think that is reflected in the Government’s response: partly trying to tackle this cyclical to structural issue and partly trying to address these underlying causes.

Q3 Chair: Does anyone else want to come in on that?

Katerina Rüdiger: Just to follow up from that, we agree with Tony Wilson’s analysis. We are obviously very concerned with the rise in youth unemployment now. That is why we have just launched our campaign, but what we are concerned with as well is the more structural developments that mean that, over the last few decades, the transition from education to work has been getting harder and more difficult for young people. We see a real gap between young people and the world of work, and I think that is what we are trying to tackle within our campaign. We are trying to bring employers and young people closer together.

Young people struggle especially on the demand and supply side, so on the supply side what we have seen is that you have fewer entry-level jobs, you have fewer progression routes and access routes into organisations. But then on the supply side of the young people, you can see that fewer young people are combining work and studying. They have less insight into the working world as a result. However, employers prefer to employ someone with more experience, so there is a mismatch, and then many young people also lack insight into sectors and occupations. We think employers have a key role to play in all of this, and what we are trying to do through our campaign is to change the hearts and minds of employers in the medium and longer-term, because if that does not happen we are worried that some of the initiatives that tackle the short-term issues will not result in any long-term improvement of the situation.

Q4 Chair: Of course, the official figures are very much inflated, are they not, by students, of whom there are far more than there used to be? Do you think that is a concern-that we do not really publicise what the true picture is but an inflated figure? Ralph, you were going to come in.

Ralph Michell: I think you are right that probably all of the figures are concerning in one way or another, but between that headline one million there are some people we ought to be more worried about than others. As Tony has said, it is long-term youth unemployment that does the damage. What we are really worried about is the damage that this does, and the evidence is that, the longer term it is, the more damage is done. It is important to say that that relates to people who are unemployed for one long stretch and people who, between the ages of 18 and 24, say, are in a kind of revolving door of short-term education, short-term unemployment and stretches of being NEET (not in education, employment or training). So you might never reach, say, the point of being unemployed for a year and nevertheless have a life between the ages of 18 and 24 that puts you in very bad stead for your future. So I think that is what we ought to be really worried about and, as Tony has said, there is clearly, right now, the danger that more people will suffer that fate. There is also, though, a structural problem in that a lot of young people have been in that situation for a decade plus.

One other thing that we ought to be worried about is the geographical and demographic concentration of this. We know that there are some communities where extraordinarily high proportions of young people are in this position. In some wards in the country that we looked at, one in three young people were not just NEET but claiming JSA (Jobseeker’s Allowance). Then there are also demographic issues: we know, for instance, that disabled young people, young people in care, and young people with caring responsibilities are more likely to be prone to this.

Q5 Chair: Genevieve, do you want to just say a bit about this? Do you have a particular take on what the overall position is, the statistical measures, and perhaps what the European perspective is on this?

Dr Knight: I do not have an opinion about the European perspective, but youth unemployment in other countries is much higher; that does not mean that it is not high here. I think that you have to be careful about trying to say, when a person is long-term unemployed, how long it takes to be affected by unemployment. I agree with some of what Ralph and Tony have said; I think that there is a scarring effect. Academic work has shown that young people can be permanently disadvantaged in the labour market by their experiences of unemployment as a young person, and Paul Gregg and other academics have some evidence on that. I think that it is a bit unclear about when that occurs, and repeated short-term unemployment might be just as bad for a young person as long-term unemployment in a single spell, but it is not clear from the evidence.

Q6 Chair: Rob, do you want to come in?

Dr Berkeley: Only to add to what Ralph was saying about particular groups that are impacted by these levels of youth unemployment. Looking at the experience of black men in particular, we have seen a disproportionate increase since 2008 and are looking at over 50% on the ONS (Office for National Statistics) data who are currently seeking work. That is a significant crisis for that particular community.

Q7 Chair: Historically, as economic recovery kicks in, young people tend to be the first to be employed, disproportionately so, which is good news for them. If you look at the most recent statistics, we seem to be seeing an improvement in employment and a falling away of unemployment, certainly for the last two months, and that this is good news for youth unemployment and really the whole issue here is not Government schemes but economic recovery. Who wants to come in on that?

Tony Wilson: I think that is undoubtedly a very large part of the answer. Without jobs and without growth we will not see a reduction in long-term youth unemployment in particular or a reduction in youth unemployment full stop. I think my take on the numbers is it is quite hard to draw trends from individual monthly changes in the labour market stats. One month the media will be saying, "Unemployment is going up. We have a crisis"; the next month: "Unemployment is coming down. The recovery is taking hold."

Broadly, employment, unemployment and inactivity are all flat. We have a fairly stagnant and very weak labour market, but there is a very clear upward trend, which may be starting to level off, in long-term unemployment and particularly in long-term youth unemployment. There are some deteriorations in the measures of claimant unemployment, with people spending longer on Jobseeker’s Allowance. We have seen that, for example, with massive increases in the numbers forecast to enter the Work Programme.

So I do think the recovery needs to take hold and we need to see an increase in demand and an increase in jobs, and the evidence is absolutely clear that young people do tend to benefit from that, but we have not really seen that in this recession. In our report from last year, we plotted what happened in the two years after the peak in the previous recession compared with the two years after the peak in this recession just gone, and really we have seen unemployment continue to be high and flat. In fact, we have seen youth unemployment getting worse-significantly worse-in the last year.

Ralph Michell: I think you are right. Clearly, without growth this problem will not be solved, but then I think there are a few things to say: firstly, the growth we have seen so far, or the slight falls in the numbers unemployed, do not make a serious dent in this problem. It remains as bad as it was. Secondly, I suppose, while we wait for growth, there are things that we can do and policies that the Government can pursue to make this less of a serious problem. Thirdly, we do have to remember that even when the economy was booming, we still had this really quite serious structural problem, so even then you would need Government intervention, I think, of one sort or another.

Q8 Glenda Jackson: This is always, with me, a constituencybased issue, so it is subjective in a sense, but the young people that I speak to have accepted that they are never going to get a job-that they are unemployable. This stems not only from the difficulties that you have already touched on but also from their treatment-I mean, the first people that they meet when they try to get a job. I accept this; I do not think they are making this up. So there must be things, are there not, that we could do on that first face-to-face encounter? It will take longer than that, of course, because they are going to have to go back several times. I suppose what, in a rather clumsy way, I am trying to say is: is there anything within the existing structures that can begin to build the confidence of young people as opposed to what is running with them very strongly at the moment-that they will never ever be employable, not necessarily because there is not a job but because somebody deems them not to be worth giving a job to?

Dr Knight: I think you are trying to point out the fact that there are disadvantaged people, as Rob Berkeley mentioned, and that those disadvantaged young people even during boom times need active interventions that can assist them to compete more equally in the job market. Those active labour market programmes have been shown to be effective in some ways to help those people towards jobs that they would not otherwise have gained. I think that is what you are trying to point to, and the fact that those interventions are worth spending on has been analysed from some of the older programmes, the New Deals, for example, and I can talk about that at another point.

Katerina Rüdiger: On your point about confidence, I think that is really, really important point, and I do not think it is an issue for just disadvantaged young people, although of course it is worse for them. Generally, young people find it very difficult, even if they do get an interview, to talk to employers and relate their skills and experience in a way that employers would understand and is related to the job in question and to the workplace. We have launched a mentoring initiative, a mentoring pilot, where we match our members-HR professionals-with young job seekers to give them advice and guidance on CV writing, interview techniques and so on. This has been very, very successful because we have seen that just a few sessions with an employer has really helped build young people’s confidence, because quite often it is not a skills issue. That might be the case for the most disadvantaged, but quite often it is just they do not know what language to use and they do not even know what they do not know. Many people might be quite confident, "Oh, yes, I can write a CV. Oh yes, I can do an interview," but they do not really know how recruitment works. We have seen that just a few sessions with an employer who gives them attention and tailored support works really well.

I also want to come back to something you mentioned earlier. I think it was quite interesting that you mentioned the European perspective on this. I think it is worthwhile looking at that, because if you look across Europe youth unemployment is very different across different countries. You have the southern countries, where youth unemployment is very high, and you have the northern countries, where it is quite low compared with the EU average and the UK, and the UK is obviously just above the EU average, which is not great but it is not that bad either. If you look at the reasons why some countries are doing better now just in terms of levels of youth unemployment, what is striking is that those countries that have a strong vocational education and training system and apprenticeships-those socalled apprenticeship countries like Austria, the Netherlands and Germany-have far better rates in terms of youth unemployment. So I think it is worth looking at that.

As we know, in the UK we have struggled for a long time with a weak vocational education and training system that has low educational signalling to employers and individuals. That is really an issue, because what young people do not have is the exposure to the workplace and a softer landing, where they have a few years where they combine work and training and then can acquire those socalled employability skills employers ask for.

Dr Berkeley: I think your question about hopelessness is really crucial, and I think Government has a role to play in building hope for young people.

Q9 Glenda Jackson: Just on that specific point, their first contact is not with any member of the Government; it may be with Government funded agencies, and that is really the issue that I get told about. It seems to me quite a lot of these young people are meeting people a great deal older than themselves, and simply on that level it might be better if we began to look at employing young people to interview young people, if you see what I mean.

Dr Berkeley: The National Careers Service was not up and running last year, and I am not sure its new arrival on the phone and online is going to be the kind of support people need. When people have gone for apprenticeships, we know that there are underrepresented minority ethnic groups still, despite that having been pointed out for the last three or four years. I think there are interventions that will help make those interactions better. Government does not have all the answers but I think it has a role to play.

Q10 Debbie Abrahams: I was struck by how we are talking about the issues as though they are based solely on the young person, and I think some of the points that you have raised already have reinforced the fact that labour market inequalities have existed, including for young people, for several years and the recession really is just bringing this into sharp focus. So I would ask, in particular, how we could change the attitudes of employers in relation to this.

Dr Knight: Katerina mentioned job search assistance; that is what it is usually called in the evaluation literature of all these types of programmes. Job search assistance has been shown to be effective in the UK and abroad in helping people to get employment when they have been unemployed.

The other thing that Katerina mentioned was a strong vocational training system. A strong education system is a good place to start. One of the reasons why people worry about the NEETs is that they are not in education. One of the reasons they might not be in education is if there is not sufficient funding for the sorts of education that they might be needing or that the system that is set up might not be very effective, and some evidence has pointed to the British apprenticeship system not being terribly effective in part.

Chair: I think we are straying on to some questions we are going to be asking later.

Q11 Teresa Pearce: You are dealing with post16s, so you have a problem that is delivered to you. Should not something happen in school about this? At the moment, school league tables are all on exam results. Could there not be something on people who leave school and get a job?

Tony Wilson: That is one area that we covered in our report last year. We have called for and we would support using labour market outcomes as an indicator of how you judge how effectively schools are performing.

On the importance of engaging employers, I think that is absolutely critical. There are things the Government can do to make it easier for employers to take those steps. One obvious example that was raised a few times in evidence to the Committee is broadening access to the Youth Contract wage subsidy to people who are on Work Choice as well as on the Work Programme. That is for disabled people-

Chair: We will come on to that.

Tony Wilson: Okay.

Katerina Rüdiger: On getting involved in education, I am really glad you mentioned that because it is such an important point and we tend to forget about it. Part of our campaign is really to get more employers involved in education. The good news is that employers tell us they want to get more involved, but quite often they do not know how. Luckily, I do not know if you have heard about them, but the Education and Employers Taskforce has done a lot of good work on this. They launched an initiative called, Inspiring the Future, where employers on any level can go into schools and talk about their jobs, give careers insight, talks and advice. What we say as well is that employers need to go into schools and provide work experience early on so pupils get an early insight into the working world and know what is out there in terms of careers and jobs. I think there is a lot of research out there, again by the Education and Employers Taskforce, that early contact with employers prevents people from becoming NEET later in life.

City & Guilds has just done a great survey asking young people what is more efficient in terms of advice on careers and jobs, and they say that employer contact is the thing that is the most useful. However, at the moment it does not really happen: only 7% of people say they have four or more employer contacts when they are at school, so really we need to improve there.

How do we change employers’ minds? We need to make the business case to them. We need to tell them why they need to engage and invest in young people-that, for them, it is a need in terms of accessing the skills for tomorrow, building and growing their own workforce. But again I think the good news is that we have seen a shift and many employers are starting to realise that it is in their interest to engage with young people.

Q12 Harriett Baldwin: In my constituency of West Worcestershire, which is rural but also has a lot of cyber-security firms, I have two sectors where they have an enormous appetite to hire young people. One is the cyber sector, where they want ethical hackers, and they cannot find people with the skills. They have found a few 17- to 18-year-olds who have spent obviously far too much time in their bedrooms, but that is a really fast growing sector where the education system is not throwing enough people up with the right skills.

The other area is completely unskilled and it is seasonal, and that is picking crops. There, they have had such a lack of success finding the right people here just with the enthusiasm for that kind of work that they have an exemption to bring in people from as far away as Moldova and Ukraine on a seasonal basis. They live on the farm; they get paid £6.50, £7.00 an hour. At the end of the period they deduct the living costs but they go home with thousands of pounds, and yet we cannot get young people in this country to do those kinds of jobs at the moment.

Dr Knight: There was some almost unique evidence gained for the New Deal for Young People about engaging employers, and a lot of the employers who were surveyed who were taking on New Deal for Young People clients as employment subsidy recipients were employers who work through the Jobcentre. That not all employers work through Jobcentres to fill their vacancies is an understatement. I think quite a low proportion of employers now use the Jobcentres for vacancies. Another part of the evidence-and there is a lot of evidence; it is a full report-showed that those people did really particularly want to help those who were unemployed and felt that was a social need. There were other factors as well.

Q13 Karen Bradley: One of the impressions one gets from meeting young people-and we have been on a Committee visit to the Prince’s Trust’s Fairbridge Programme, and I am just thinking of young people I have met in my own constituency-is that they feel that the opportunities available to them today are very different from the opportunities that were available to young people in the past. I wonder if you could give some information on the record about what you think the changes are, the significant changes in the labour market, that affect entry-level jobs for young people.

Tony Wilson: In terms of the headlines from the analysis that has been done of changes in occupational structures, the evidence that the UK Commission for Employment and Skills (UKCES) submitted set this out really well. Up to about half of young people at any point in time work in retail, elementary occupations and a few other areas, and those occupational groups have seen flat or, in fact, slightly falling employment over the last decade. So, undoubtedly-and I think the CIPD have highlighted this as well-there have been changes in occupational structures that have affected young people.

Recent work, called Working Futures, has tried to project forward to 2020 in terms of occupational changes, and that does suggest that these trends could get worse. My one caution about this disappearing middle-this sort of hollowing out and disappearing bottom, as well as a hollowing out of the labour market, that could be affecting young people-is that if this is having an impact, it is not always hugely evident in the numbers. So, when you take out students and population growth, youth unemployment in the mid2000s in the end rose and then came back down again before the recession. We went from about 6% of young people being unemployed and not in education to about 6.7% of young people being unemployed and not in education. So we did not see the bottom falling out of the youth labour market, but undoubtedly we are seeing changes, and there is a lot of academic evidence about how transitions for young people are getting harder and getting a bit longer to achieve.

Ralph Michell: I would agree with Tony on that. When we did a report on this, we similarly got a very strong message from young people that they felt the deal they had had been broken. That sentiment is very clearly there. I think if you look across generations-if you compare this generation with, I do not know, 50 years ago-there has been an enormous growth in the provision we make available to one half of the population: the universitygoing half of the population. When you think about how university provision in this country has changed over the last 50 years, there has been an explosion, and if you compare that with those young people who are not going to university, the opposite is true; there has been, if anything, an implosion in the provision available to them. So if there is a deal that is not being kept to, I would suggest it is there.

Q14 Karen Bradley: If we split it between the 50% who are university educated and the other 50%, do you think that other 50% are lacking key skills?

Tony Wilson: Alison Wolf’s report on vocational education is compelling reading on this, and Katerina and others have made the point about the importance of vocational education. She found that between a quarter and a third of 16- to 19-year-olds were doing vocational qualifications with little or no value. Government steps to overhaul vocational education and reform the vocational system are welcome, and that addresses the point that these problems start much earlier than when you enter the labour market. In addition, though, there is a critically important role for intermediaries, careers advisers and schools to support people to make the right choices and then to make that transition.

One of the things that has worried us has been the removal of ringfenced funding for careers advice and the replacement with a statutory responsibility for schools to provide independent and impartial careers advice. So there has been quite a movement in the last few years towards professionalisation of careers advice. That is quite expensive. Schools now are really judged on whether they provide it or not. To our mind, I think that undoes quite a lot of good work in trying-and it was not always successful-to professionalise careers advice and improve the careers advice industry. So there is a critical role there where I think we can do much more: progress on vocational reform and improving careers advice.

Interestingly, the big surveys that, for example, the UK Commission for Employment and Skills have done do not necessarily suggest that young people who enter employment do not have the skills to succeed. There is a skills mismatch for people at the bottom of the labour market, which we have to address, but young people are fairly well prepared; we just have to improve that: better quality work experience, getting people into the labour market earlier. When I was 16 or 17, I cannot remember how many parttime jobs I did. That is not as common now. So those sorts of things are really critically important.

Katerina Rüdiger: That is something we have seen as well. When we ask employers, the majority are satisfied with young people’s skills. It is more the issue around lack of work experience that plays a big role, and I think that is something that is often in the mainstream public debate, if you think about all the articles in the media about young people not having the right skills. Somehow there is a myth that has been promoted for a while that young people do not have the right skills, but if you drill down to it, it is not true; it is the other issues that come into play.

On vocational education and training, I really agree with what Tony has said in terms of Alison Wolf’s review, and that vocational education and training in this country is too narrow and specific and not broad enough in terms of the academic content. So people tend to be locked into one specific, narrow job; they cannot really move around, let alone move up into university. We talk a lot about parity of esteem. Of course people should be able to do an apprenticeship and then go to university if they want to, but real parity of esteem would be if they can get a great job, a good job, by doing an apprenticeship and not going to university, as is the case in other countries. That is something we should aim for, but we have a long way to go.

Employers of course need to be, in a way, more demanding and get more involved and provide better workplace learning, but sometimes, again, they get a bad reputation. Many employers we talk to say they are really concerned about quality; they want to have high-quality apprenticeships, so it is something they want to do as well. We have provided some guidance on how to structure and design high-quality apprenticeships, and all the employers we talked to were very supportive of this, and I think they are quite concerned that sometimes the provision of training offered within apprenticeships is not really of the standard they need in terms of growing their own workforce.

Dr Knight: I just wanted to point out that in times of transition like this, where there is a lot of change in the sectors where employment occurs, young people are quite well placed to take advantage of it if they have training in those new areas of high employment. Often it is older displaced people who suffer more, so the young people could be advantaged if there is training in those areas that employment occurs in.

Ralph Michell: I would agree with Katerina and Tony that UKCES and others find that, when you look at what employers are saying, it is not that young people do not have the skills, and there is a bit of a myth that the younger generation do not have them. It may depend on whom you are talking about, and it may be that this structural youth unemployment problem-the 5% to 7%ish of young people who really struggle even in the boom times-means there really is a big skills and confidence and soft skills problem for them.

Q15 Harriett Baldwin: Can I just come in with this story from the BBC website yesterday? Arnold Clark, one of the biggest car companies in Scotland, said they had 2,280 applicants for their apprenticeship scheme; 81% were not employable-they had a poor attitude to others, poor communication skills, no concept of citizenship and were shocked at the number of hours they were going to have to work. Does that ring true to the panel?

Tony Wilson: I read that as well and it was quite shocking. Indeed, it is a really shocking assessment, even indictment, of the system there. I would make two points. One is an obvious point, but it is quite hard to draw from the individual experience of that company what else may be happening and, on the whole, we do see pretty good levels of satisfaction. The Scottish apprenticeship system is separate to the English one, so I am talking about the English apprenticeship system. There are fairly high levels of employer satisfaction with apprenticeships, and we have seen a large growth in apprenticeships. However, I think what that really pointed to, for me, more than anything was the importance of making sure we have a really good route way for those people. For those 80% of people who are not ready to get into an apprenticeship, what is the system that is supporting them to get there? I am mixing systems, but in England we have seen increasing emphasis on making apprenticeships higher skilled, and more than anything we need to make sure that we do not take this so far that, as Ralph absolutely rightly says, we are taking a step out of the ladder for those people who are near the bottom.

Chair: Karen, in order to wind up this first section and move on, did you want to ask your question about recruiting older people?

Karen Bradley: Yes, okay, because I think we have covered a lot of it anyway.

Dr Knight: I was just going to say that your news article is not new news, because in this very old 1999 report from the New Deal for Young People the employers said, "The most commonly mentioned problem with the young people was difficulty working well with other employees"-reported for onefifth of the people that were employed by them, and those were the ones who got the jobs.

Q16 Karen Bradley: Winding up this section, could you reflect on whether you think the measures in the Youth Contract and other measures that the Government is using at the moment are likely to displace the older workers from the labour market, and, if so, is this justified?

Tony Wilson: This is a cop out, but it is too early to say. My hunch would be not, for the similar reason that we do not tend to find that increases in migration, when you really drill into the numbers, lead to increases in unemployment. It is based on this idea that there are not a fixed number of jobs in the economy. The economy, even now, can cope with more people in work. Undoubtedly, I think one impact of the wage subsidies will be to encourage employers to substitute a long-term unemployed person for a short-term unemployed person or a job changer that they may have employed. Or, indeed, we may see displacement, where one employer is able to employ people more advantageously than someone else, so for example Starbucks does better than Costa and we see jobs lost. We are likely to see those impacts at the margins. Overall I think it is very unlikely that it would have a net impact, because it will be balanced out elsewhere. The companies will be more profitable, they will create more jobs and so on.

On older people, and as others have already mentioned, there is clearly the really significant issue of the scarring impact of long-term unemployment. We must not lose sight of that. When people fall out of the labour market after 20 or 30 years, their firmspecific skills become redundant; the scarring impact intuitively may be much larger. There is a real dearth of academic literature and evidence on this, but I think we miss those 50plus people at our peril, because I think they are groups who will lose out and who are not really being focused on.

Q17 Andrew Bingham: The Government takes the view that to address youth unemployment there is a wide diversity of different cases, and I will take answers from any of you. In your view, does the Youth Contract contain the right mixture of support to account for the wide diversity?

Ralph Michell: No.

Andrew Bingham: Well, that was easy. We will soon move on.

Ralph Michell: There are lots of things that we like about the Youth Contract. However, Tony has alluded to the fact that the wage subsidies, for instance, are not available to young disabled people on Work Choice. For me, that points to a broader problem that many of our members, charities, would be worried about, which is that it is the most disadvantaged who are least helped by the whole range of support that is on offer. We suspect that is likely to be the case with the Youth Contract. "Good but not enough" I suppose would be the summary. When you think, maximum, it is going to create 50,000 jobs this year when there are 250,000 young people unemployed for a year or more, we suspect very strongly that it is the most disadvantaged who will gain least from it. Unfortunately, we cannot tell that at the moment because the Government will not publish any data on it.

Tony Wilson: I agree with Ralph to an extent. More charitably, I think the Youth Contract is a substantial step in the right direction and it addresses the right kinds of issues, arguably, in the right kinds of ways. But I think we need to take a step back and think about what our objectives are. Clearly we need to tackle long-term unemployment now. There is an urgent need to address that. We also need to reduce the likelihood of this large number who are churning in and out of unemployment becoming detached. Thirdly, we need to address this underlying issue that has existed for decades. There are measures in the Youth Contract to hit all of those.

On the first, Ralph is right. I would probably go even further in thinking about the current long-term unemployment problem that we have with young people and the impact of the Youth Contract. Just some figures: the Government estimates now that 140,000 young people will enter the Work Programme this year, 2012/13. 140,000 young people will enter the Work Programme this year. At its very best, about 70,000 of those will leave for work. It will be a huge success if half of the people who enter leave for work. Wage subsidy schemes have quite high deadweight; they also have often very low take up. I think 50,000 wage subsidies a year is ambitious. It would be five times higher than has been achieved in previous schemes that have existed continuously until last year. But let us suppose we get 50,000 and let us suppose a third of those are additional jobs, which again would be pretty good; you are only reducing that 70,000 who will go through the Work Programme and come out the other side without a job by about 15,000 or 20,000.

So we have created a system where probably 50,000 young people will exit the Work Programme in two years’ time having not worked, and by that time they will have been unemployed for nearly three years. That is the scale of the challenge, so it is even worse than Ralph’s point about the 250,000/50,000, because this number is replenishing itself every year, every day. So I do think there is a clear case for doing more there, and I think the really significant deterioration in the labour market and the economy since the Work Programme was created, which is putting pressures on providers and taking money out of the market, effectively, purely because of the economy, would justify going further.

We can come on to talk about the other issues, but I also have concerns, when we talk about this underlying issue for 16- and 17-year-olds, that we are just adding initiatives after initiatives here, and what is really needed is to clarify and simplify the accountability and the outcomes that we want for that group. In the Careers Development Group’s evidence to the Committee they talked about 15 different schemes that they had encountered in London alone-only those contracted by central government and the Greater London Authority, not including everything else. 15 different contracts. This will be number 16. We really must address this, simplifying accountability and focusing on a smaller number of key outcomes.

Q18 Andrew Bingham: You talked about wage subsidies, wage incentives, call it what you will. The way the funding cake is cut, effectively, about 30% of it is on wage incentives, and there is £126 million on the NEETs and so many apprentices. I would just be interested to know-I think I know the answer-whether you would wildly or slightly alter the way the funding has been carved up between those different areas?

Tony Wilson: I think it depends what we want to do with the money as well. So in terms of spending £120odd million or £130odd million on wage subsidies in a year, we called for a form of targeted wage subsidy but there may be better ways that money could be spent. It partly depends what you do with it. I think we would support focusing on the problem now, as it were, with long-term youth unemployment and addressing that, and I think that does point to doing more, perhaps targeted at the most disadvantaged areas.

There is just one other point I would briefly make. When you adjust the £2,200 subsidy for inflation it is almost exactly the same as the wage subsidy that existed in the New Deal for Young People. That was introduced in 1998; it was about £1,500, or £60 a week. That, in today’s money, is worth £2,250, so this is not a wildly bigger subsidy. The New Deal for Young People wage subsidy had a take up of about 10,000 a year with a massive campaign behind it, so I would question whether we will hit 50,000.

Q19 Glenda Jackson: Could I just ask a question about the schemes? You said there are 15 schemes in London. How are they contracted? Does it come from the main providers and then subcontracted?

Tony Wilson: I believe they refer to it as 15 separate contract packages in London, and I suspect they have included in that apprenticeship provision, where there will be individual training providers who hold apprenticeship contracts. There is European Social Fund money in London that is being used to support retention and progression for people who are unemployed. They did not include local authority money, but there is the Early Intervention Grant that local authorities hold. There is money that the Department for Work and Pensions have contracted through the European Social Fund for supporting families with multiple problems. There is additional money that the Department for Communities and Local Government have now put into local authorities to support tackling families with multiple problems. There is the Work Programme. There is any number of colleges that have funding from the Skills Funding Agency who are then buying their own provision as well. So we have a really complicated landscape-and there is GLA money.

Q20 Glenda Jackson: And they do not link up?

Tony Wilson: Well, I think when the will is there-and we saw this in the depths of the recession, 2009/10-there is a lot of really innovative, really good work happening between-

Chair: I think what might help us is if you were to write to us with the particular contracts you have in mind. I think that would be very useful.1

Andrew Bingham: One page-in fact probably two pages if there are 15.

Chair: If you could arrange that for us that would be great.

Q21 Andrew Bingham: Can we just go back to wage incentives and, in terms of evidence, do they work and what sort of jobs do they create? You were involved with the Future Jobs Fund, if I am right.

Tony Wilson: That is right.

Q22 Andrew Bingham: Do you think that this will attract a greater take up than the Future Jobs Fund did? I am just interested in your views particularly on wage incentives and their worth and whether they work.

Tony Wilson: The Youth Contract wage incentives are substantially different from the Future Jobs Fund, which was creating temporary additional jobs.

Andrew Bingham: Yes, but I am interested in your view on the different outcomes compared with that.

Tony Wilson: Yes, and I do think that there is a case for a little bit of everything, and I think there is a clear case for wage incentives broadly as constructed in the Youth Contract. They encourage employers to favour people who attract the subsidy. It is very unlikely they will create additional employment. You are trying to encourage, to some extent, substitution, if you like. You are trying to encourage the employer to take on the long-term unemployed young person in place of the shorter term unemployed person.

Q23 Andrew Bingham: You do not think it will create extra jobs then?

Tony Wilson: It might at the margins if it means that employer is then able to create even more jobs because they are more profitable. It makes the market more efficient, so it should lead to an increase in aggregate employment, and some evaluations of the New Deal have found this. NIESR evaluated the New Deal and found overall impacts on growth from that, but it is at the margins. Really you are trying to encourage, to an extent, substitution, and you should, because you should be trying to get long-term unemployed people closer to the front of the queue. You are correcting that market failure. Last year, we advertised for an intern, paying London living wage, and we got 200 applicants. All of them had degrees. All of them were fantastically good. Many of them had been unemployed for a very long time. Any employer dealing with that level of applicant for an entry-level job will take shortcuts. I am pleased to say we did not, but they will take shortcuts: how long has that person been unemployed? What did they do before? What experience have they got? That is what you are correcting for with those wage subsidies, and it is right that we do that.

My one other concern is around how it is paid, and we said in our evidence that it would be better to pay the subsidy up front, as has been the case in previous subsidies, rather than wait six months.

Q24 Chair: We will come on to that. Genevieve, I think you wanted to comment, and would you also like to comment on whether you think there is likely to be greater take up with this scheme than previous ones?

Dr Knight: I think your initial question was about the balance in the Youth Contract. I do not disagree with Tony that, on balance, it looks pretty similar to what you were doing 10 years ago, and you have not upgraded it to account for the fact that prices and wages have increased in that time. When you look at the subsidy, it is almost exactly the same amount. My calculation is slightly different from Tony’s, but £2,275 compared with £2,310 10 years ago means it is slightly less.

Regarding the balance across the programme, we have had all these things before in slightly different guises. The quality of them could have improved; for example, they seem to be trying to improve the quality of apprenticeships, and I think that is important-improving the quality of the provision.

I think the extra job support, moving it to weekly, could be useful. From the New Deal programmes and other evidence in the past, UK evidence has found that job search assistance really helps and is effective and can improve employability rates.

Q25 Glenda Jackson: I am moving on to the work experience scheme. The Government have issued an evaluation that 51% of the first 1,300 young people who took part in the work experience schemes were off benefits after 13 weeks. My question is: does this provide sufficient evidence of it being a successful scheme? I would have thought clearly it does not.

Dr Knight: No it does not.

Q26 Glenda Jackson: What makes a good work experience scheme?

Tony Wilson: Shall I answer first on the numbers? The CIPD will have a far better answer than me on what makes a quality work experience. Separately, the National Institute of Economic and Social Research validated some DWP impact analysis on the additionality of the work experience scheme and found that there was additionality. We, at the time, queried this and plotted on a nice graph that the lines were about the same: the off-flow rates were about the same whether you did work experience or not. I am happy to say there is an additional impact, but it is small. It suggests that about six in every 100 people who take part in the work experience programme leave benefits as a direct result of that. That is the additional impact.

Now, 6% additionality for a programme that does not really cost you anything, and given that there are also lockin risks-there are risks that employers could take people on when they would have employed them sooner if they had not done the scheme or that people will reduce their job search-is not a bad outcome. I would say that is fairly good. But in terms of the grand claims about 100,000 work experience places per year, that is only going to have an impact, on the Government’s estimates, of about 6,000 on the level of unemployment. So it should be part of the mix, but it is not the only answer and it is not even really a very large part of the answer, but good quality work experience is.

Q27 Glenda Jackson: Who defines that good quality work experience? What is the definition?

Tony Wilson: CIPD have done guidance on what makes a good work experience.

Katerina Rüdiger: Just about two months ago we produced a guide for employers on how to design and run work experience placements that work for everyone involved-so for the individual of course, but also for employers and society overall. We think that work experience placement can have many benefits for everyone involved. However, obviously, as you say, they need to be high quality. So what we did is ask employers that currently run work experience schemes successfully as well as people who represent young people-the Prince’s Trust, Barnardo’s and others-and we built on that to produce some guidelines for employers.

A lot of this seems to be fairly common sense, but it is really that you need to tailor the placement to the young person’s needs. So you need to sit down and talk to them about what they want to get out of it, the particular skills deficiency issues, if there are any, what their career aspirations are, and what they want to get out of it. Then you need to think about how they fit within your organisation. You need to develop a work plan. You need to think about who will mentor and supervise the young person. You need to give that member of your staff some training, and obviously select somebody who is naturally helpful and knows how to deal with young people. So you really need to support the young person.

Obviously the work experience, in a way, is a means to an end, isn’t it? It is in order to help young people to improve their employability skills and get some insight into how the working world functions, so, at the end, you need to provide them with some honest feedback and say, "This went really well." You need to celebrate success, because you said earlier it is about building a young person’s confidence. Clearly that is very important, so celebrate success, but then also give feedback on what did not go so well, and then give some further advice on recruitment and job search or access to networks, which young people often lack.

Really, as an employer, we say, you need to put some thought and effort into this. However, then it will also be beneficial for your organisation in terms of developing workforce skills, because some people who might not normally manage somebody will be able to develop their management skills. You will be able to engage with your local community, bring in new skills. Many employers said, of course, it is not a trial interview period or extended interview period, but we have seen it as a recruitment opportunity in being able to engage with people we normally would not have offered an interview, and used it as a way to access talent.

Q28 Glenda Jackson: The picture you paint is one of very hard work for the employer, and I can consider employers who would say, "Yes, we are part of the work experience scheme," who would not go through that process because the PR aspect for them is saying, "We are doing our bit for society," in the clear and certain knowledge that they do not have to employ that young person at the end. I am still trying to dig down.

Katerina Rüdiger: It is not only about employing the young person at the end; it is giving the young person employability skills and confidence, and also something to put on their CV. So it is helping the young person to take a step closer to the labour market even if you cannot offer them a job.

Q29 Glenda Jackson: Yes, but all the publicity that has been around the recent fracas over work experience was about people who were very snobbish about kids working in supermarkets. I am not criticising the supermarkets who stepped up to the plate there, even though some of them stepped back from it. They did say that was a way into employment and that is what we are talking about here. We are trying to find ways of ensuring that young people can get into employment. I would like to know who monitors the quality of these schemes. Is it left to the young person? Is it left to whoever puts the young person there?

Dr Knight: I think that you are pointing out that not all employers are equal in the quality of the jobs that they offer. It is fairly well known that there is a wide distribution of types of jobs and what you might get out of them. I think that the monitoring point is a good point, and I am sure the Department for Work and Pensions would in some way be monitoring how employers gain access to the programme.

Tony Wilson: There is a work experience co-ordinator in every district.

Glenda Jackson: They were not very certain when we asked this question when they were in front of us, I have to say.

Tony Wilson: Really? Okay.

Q30 Karen Bradley: Just a very quick point. I met my local Chamber of Commerce recently, and one of the points they made about work experience was that they would like to see school age young people doing more work experience, both because it gives them the idea of how work is, even if it is stacking shelves, but also, if it is stacking shelves, that aspirational young person might say, at 15, "I do not want to stack shelves; I am going to work hard and pass my exams." I just wonder if you would agree with that.

Tony Wilson: That is absolutely right, and I would just make a couple of very quick points. I would say they would benefit from work experience and also jobs. There is the very good example of a scheme that Islington Council are running, where they are employing 15 and 16 year olds or even, I think, 14 to 16 year olds to do some basic entry-level stuff a couple of hours a week. That is a great idea; they pay them for it-fantastic. Credit to them for doing that.

More generally, the bottom has fallen out of the labour market for 16 and 17 year olds. 20 or 15 years ago, the employment rate was about 50%. Half of 16 and 17 year olds worked at any point in time. Now it is one in four; it is 25%. The Work Foundation report that came out yesterday illustrated this really well, with some evidence produced by Bill Wells that shows a very large increase in the number of young people who say they have never worked by the age of 19. So that is a really significant issue.

On school age work experience, I would just say the Department for Education have just removed the statutory requirement on schools to provide work experience, so all the activity of CIPD, the CBI and individual employers to encourage that has to be backed up by Government.

Q31 Glenda Jackson: Some of these questions we have already covered on the issue of the rather slow approach to encouraging apprenticeships in this country, but is it not the case that those young people who are hardest to reach-who are most disadvantaged and furthest from the market-are the least likely to get into the apprenticeship schemes?

Ralph Michell: Yes, I think so, and this is one of the things that most worries our members. We have talked already about the lack of preapprenticeship provision-getting people to the level where they are able to do, and capable of doing, an apprenticeship. Then there are also groups of young people whose circumstances make it difficult for them to take on an apprenticeship for other reasons. Some of our members work with young homeless people. For them, the minimum wage for apprenticeships just does not stack up financially. They just cannot make that work. Obviously, if you are a disabled young person, you are going to need more support in doing an apprenticeship, and Ofsted recently produced a report that was very critical of the lack of any vocational provision in many areas for young disabled people. So there is a big group of young people for whom, for one reason or another, apprenticeships are currently out of reach.

Q32 Glenda Jackson: Can you put a figure on the size of that group?

Ralph Michell: I could not, I am afraid.

Q33 Glenda Jackson: Anybody?

Tony Wilson: It would not necessarily be the case that apprenticeships will always be the answer for that group who cannot access apprenticeships, which is why I think the Department for Business, Innovation and Skills are right that apprenticeships should be about attaining a certain level and then moving up to progress to a higher level. It is about boosting growth and productivity, but we need a clear ladder that gets there for that group who are furthest from work, and I do not think that exists at the moment. But there are some interesting models, like the Apprenticeship Training Agency model, where training providers essentially can create their own apprenticeships, pay people a wage and place them for short periods with other employers. I would certainly like to see more work done on how you can expand that as a means of particularly supporting more disadvantaged people to work. So it is not necessarily always linked to one job that will last a year, but it can be linked to placements in a number of different jobs.

Q34 Chair: We ought to perhaps bring Rob in here as well, because when we went to the Prince’s Trust there were quite a lot of people from ethnic minorities who were studying to get the skills that they needed in order to move into schemes such as apprenticeships, but is this an issue for the Runnymede Trust and do you want to comment on it at all?

Dr Berkeley: It definitely is. I think given the scale of the problem for black communities you would expect to see higher numbers of apprenticeships going to people from those backgrounds. On the latest figures, something like 3% of apprenticeships went to black African and black Caribbean young people. That, to me, is a significant problem. It may be about their location or it may be about discrimination in terms of application. We know that if you have an African or Asiansounding name, you have to make twice as many applications to even get an interview. So I am wondering whether there are some structural barriers there that we might seek to address. The National Apprenticeship Service has some diversity pilots that it is currently running, but no plans after July for extending those, so we do not have any clear plan about how we might increase the numbers of young black people in apprenticeships.

Q35 Glenda Jackson: So the existing Youth Contract is not providing the kind of support required?

Dr Berkeley: No. Given the scale of the problem, there just does not seem to be a clear plan that seeks to address the particular problems that people from black and minority ethnic communities may be facing. There is a suggestion that a rising tide will float all boats, but we know from the New Deal, YTS (Youth Training Scheme) and past experience that that does not normally happen.

Q36 Glenda Jackson: For the whole group that we have been talking about, not just ethnic minorities but also young people with disabilities and things of that nature, is it just a matter of money that would improve it as far as the Youth Contract is concerned or is it the kinds of schemes being encouraged that you were talking about?

Dr Berkeley: We talk about young people as if they were all the same, and I think there are different sets of experiences, different sets of educational experiences and different sets of needs, and I do not see, in these plans, the kind of variegation that we might need.

Chair: We will come on to that in more detail, but I just wanted to give you a chance to comment on that point about apprenticeships.

Q37 Glenda Jackson: Anybody else? Any more on that? No. The Government has based its funding on the black box approach and, payment by results based on a 70% success rate. I think we touched on this figure rather earlier. Do you think it is too optimistic?

Tony Wilson: Are we referring to the Work Programme?

Glenda Jackson: For 16 to 17-year-old NEETs.

Dr Knight: Is this the Innovation Fund?

Tony Wilson: It is the Education Funding Agency, Young People’s Learning Agency, the one that is procured by the Department for Education, as I understand it, for 16 and 17 year olds. They have said that the maximum funding will be £2,200. That will be paid 20% on attachment, when somebody joins the programme; 30% once they enter education, apprenticeship or employment; and then 50% if they sustain that for six months or for five out of the previous six months, and the 70% figure I think refers to the latter.

Chair: The success rate that they have to get to.

Tony Wilson: I think that does sound fairly ambitious when you look at the likely success rate of employment programmes, for example, where you say that 50% entering work would be a pretty good outcome, and you are talking about a group-and they are very rigidly sticking to it-who have no GCSEs and who are likely, therefore, to be very disadvantaged. If it is lower than that-if it is, say, 50%-and allowing for the fact that providers will bid at less than £2,200, you are talking about unit funding for the programme of, I do not know, £1,200, £1,300, because only half of them will get that 50%-that much larger outcome payment. You cannot construct a programme for that money, so it places a massive onus on using it to grease the wheels to get partners to join up better. My concern, as I said, is that we are creating programme number 16 or funding stream number 40 or whatever.

Ralph Michell: You visited the Prince’s Trust. Many of the organisations who will be best placed to support particularly this group of 16 to 17 year old, very disadvantaged young people will be charities, social enterprises, and many of them quite small. They are, in principle, happy with the idea of being paid by results, but the way that this programme has been procured really does not set it up for it to be delivered by those organisations, particularly the competition on price. This is understandable in an age of austerity, but I think it might have unintended consequences because, as Tony said, the result is that people bid on much smaller amounts of money, and the result is that there may just not be the money in it to enable charities to do the work that they could do to support these young people.

Q38 Glenda Jackson: I think in previous evidence that we have taken we heard that the charities were not even being approached in some instances, specifically in those areas where we have been told by Government that they would be the vital element in ensuring the most difficult groups of young people could be approached.

Chair: Although, to be clear, Glenda, that was on the Work Programme, wasn’t it?

Glenda Jackson: It is the same principle, isn’t it?

Chair: We are hoping that this will be better still. Sorry.

Q39 Glenda Jackson: No, no; I just wondered if anybody else had anything to chip in on that. It is the kind of black box, payment by results issue that we are trying to look at.

Ralph Michell: In principle, our members would not have a problem with payment by results. It is how it is done, and the competition on price is particularly key, so it does not surprise me you have heard from charities saying that they have not been approached. It does not surprise me that there is all the negative noise about both the Work Programme and this bit of the Youth Contract, but I think we need to disaggregate the various bits of how this has been done. Clearly, for some charities, payment by results does cause problems.

Chair: Just so we are clear, the complaint about not being approached was about the Work Programme; it was not about this scheme.

Q40 Glenda Jackson: I will throw this at you again. I had a meeting with a charitable organisation that has an outlet within my constituency where they are part of this. The bulk of the people who work for them are volunteers. They are very wary of taking on young people as part of this scheme, because if they do not pan out in the situation those young people may be sanctioned in some way, and that is causing them serious difficulties. When this was raised with the Minister, the argument was put forward, "Well, it is the black box scheme and that will sort everything out."

Tony Wilson: Outcomebased, payment by results and black box programmes do not always have to go together, ultimately. As Ralph says, I think nobody would really disagree with the principle of paying more the more successful a provider is, and there is evidence from various countries that suggests-suggests, it does not definitively show-it improves performance. I would argue that good oldfashioned performance management does as well: saying, "You have to do better or you will lose your contract," or sending in teams to improve performance. Taking a much more rigorous look at that is probably even more important.

But then the black box is about how you shade it out. You can have a greyer box that ensures that smaller organisations are able to compete in a fairer way, however subjectively defined, and that addresses some of those issues, for example, with rules on sanctions and on mandatory activity.

Dr Knight: I would definitely support that. I think the procurement format is really the problem and what might be causing a lot of the issues, in that you cannot extricate it from the rest of the other design aspects. Unfortunately, if you procure something such that you have a design where you get several companies sucking some of the money out and feeding it to the next subcontractor level, you would learn in business studies that it is natural that they are in there for their profit as well and there could be problems further down the line for those further down the supply chain.

Q41 Harriett Baldwin: A basic question: do you agree that the Low Pay Commission has the rates right for this age group, 16 to 24?

Tony Wilson: They have done so much research and produced so much evidence, so I am not going to try to tell them how to do their job.

Q42 Harriett Baldwin: You are going to say yes.

Tony Wilson: Maybe. My only caution would be that if you continue to reduce, relative to prices, or hold youth rates, you do have an issue about what is called the "reservation wage"-the wage at which young people are prepared to enter the labour market and to work. We can argue the toss about whether that is right or not, and whether we need to be stronger on sanctions and conditionality or whatever. One paper that they did produce that I thought was fairly compelling did suggest that, if you got rid of or significantly reduced the minimum wage for 16 and 17 year olds and for 18 to 21 year olds, you may just bump up against the reservation wage, so you would not increase, and you could even conceivably reduce, youth employment.

Q43 Harriett Baldwin: So no one is going to question the rates?

Ralph Michell: No. For our report we did some research, not in the same detail that the Low Pay Commission did, but again could not find any link.

Q44 Harriett Baldwin: In terms of NEETs, obviously the scheme is designed to focus on 16 to 17-year-olds who have not got any GCSEs at grade A to C. Is that the best indicator of their risk of becoming long-term unemployed?

Ralph Michell: It is a good one. We looked at the group of young people who, over the last decade, have left school and then become long-term NEET, and there are a few indicators: firstly, their qualifications; secondly, parental background, both in terms of the qualifications that the parents have and poverty levels. For instance, we found in that group if you were a young man with any qualification, highly qualified parents, not living in social housing, you had a 1% chance of falling into a long-term NEET pathway, so basically it is not going to happen. If you are a young man with no qualifications living in social housing and your parents have lowlevel qualifications, your chance of going down that route is 30%-nearly one in three. I think what that tells you is that it would be possible to better target these young people and prevent them from falling into that trap. But at the same time, 30% is very high, but it still means it is quite difficult to target young people.

Tony Wilson: My concern as much as anything is about how you design a successful programme-one that has people on it and leads to results. As Ralph says, there is a very clear correlation between level of attainment and whether you enter a job. About 40% of unemployed young people have qualifications below Level 2, so they would fit those criteria. The DWP have said that they estimate 55,000 people, of 16 and 17-year-olds-I think that is right-would fit this criterion of having no qualifications.

Q45 Harriett Baldwin: Yes, 24,000 have nothing at all-no GCSEs at all.

Tony Wilson: So it is an even smaller group, okay.

Q46 Harriett Baldwin: But the programme is targeted at people with no GCSEs above grade A to C, so it is wider.

Tony Wilson: Yes, so I think it is about 50,000odd. There is no requirement on local authorities to refer those people to this scheme. Like we said, there are any number of other programmes that are delivering locally. We have seen the European Social Fund provision that DWP procured to support troubled families-families with multiple problems. That was going to rely on local authorities referring individuals to the programme, but local authorities felt they were not bought into the programme and did not refer people. The result now is Jobcentre Plus are referring people, so we are hearing, or I understand that Jobcentre Plus are now having to refer people to the programme to get volumes up.

If local authorities are not the ones who are assessing bids, they will not be able to choose who their provider is. If DWP are setting their eligibility at such a small group and end up with a large provider that the local authority do not have a relationship with, they do not trust, and they are not sure about the quality of the provision, my fear would be that they simply will not get the volumes in the programme. You are talking 50,000odd and it is going to be a subset, and potentially quite a small subset with the sheer volume of other provision that is there, that will do it. The likelihood is, in that case, they will have to broaden the criteria. They will have to say, "Okay, you can have one GCSE, other disadvantages," or whatever. So, to my mind, I would start broad and narrow it down once you have the programme up and running.

Ralph Michell: Which, if I could interject, is broadening it the wrong way. What a lot of our members will be worried about, partly because of the competition on price and relying on referrals, is that there will not be the money to go out and get those who are at the other end of the spectrum.

Q47 Harriett Baldwin: That was going to be my next question. We heard evidence from the Careers Development Group that they would broaden it to include people who have perhaps one GCSE at Grade C or above but do not have the Maths and English element. Is the Maths and English a key point?

Tony Wilson: Or indeed who have other disadvantages. As Ralph said, the research they did for their commission showed what some of those indicators could be: living in social housing, coming from an ethnic minority group, having a disability. You can look at other ways of assessing that are not just based on qualifications. You can have a more nuanced approach that says, "If you have a C in General Studies, fine, but if you are disadvantaged you can still enter the programme." I fear that we could be setting it up to fail by setting it very narrowly and rigidly and then finding in a year’s time, "We have not got the volume; let’s broaden it out," and they will be chasing their tails.

Q48 Harriett Baldwin: So what you are saying now, as a panel, is that you do not think that the scheme will reach the volumes that the DWP have budgeted for. Is that what I am hearing?

Dr Knight: I think they will have difficulty finding the people to participate in the programme, yes.

Tony Wilson: That is certainly my view.

Q49 Harriett Baldwin: Does anyone want to dissent from that view and say that the programme is too small?

Ralph Michell: If this is experimenting with a way of working with a view to then making it something bigger, that is great. I do not think we should pretend it solves the problem for this age group, and I think it broadly falls into the same category as the rest of the measures in the Youth Contract, which is good, but when we were doing our report it was the last time that the Greeks were in trouble and everyone was talking about the EU needing to find a big enough bazooka. Our view is the Youth Contract is not a big enough bazooka for the huge problem we have.

Tony Wilson: I will just add one very small point. The Local Government Association in their evidence talked about fragmentation of services, and that was a bit of work that we did for them looking at different funding streams. Within that, they identified seven streams that could be combined to create a single pot worth £1 billion, including the Work Programme; you may or may not include it. I would answer it in a slightly different way in that this individual programme may or may not be the right size. I suspect there may well be enough provision there; we just have to find better ways to get it all together and create local partnerships or, indeed, a national system that has a clear focus on a small number of outcomes and accountability resting in one place for delivering that.

Q50 Harriett Baldwin: We are going to ask about different subcategories now and I want to ask about single parents. Obviously, they are in the news this week because the requirement to move on to Jobseekers Allowance once your youngest child reaches five came into force this week. Do we know how many people under the age of 24 who are NEET are single parents and how many of them will be affected by this new requirement to seek work with a child under five? Has anyone got any data on that?

Ralph Michell: Yes, we could send you this. I do not know about the current numbers, but when we looked at young people who have become long-term unemployed over the past decade we identified a category of young people who were withdrawing from the labour market in order to be mothers.

Tony Wilson: If memory serves, about one in five NEET young people describe their reason for inactivity as being that they are looking after family or home. It is in that order. They may not be lone parents, but they are withdrawn from the labour market because they are looking after a family, so that would suggest perhaps up to 150,000 or 200,000.

Q51 Harriett Baldwin: Quite a lot of them, potentially, may have missed out on education, therefore. So the youngest child reaches five, you might be in your early 20s, and you might have the same educational difficulties as the 16 to 17-year-old group. Would the panel support extending this support to categories of young parents who might also find themselves in this unqualified situation and now faced with a requirement to seek work?

Ralph Michell: I do not know what has happened on this, but there is a quite successful, quite small Department for Education funded scheme that makes training available to young mothers. I think if you are under 24 you can go to college-something of that nature. The DfE were trying to downscale it, which, to me, is the opposite of what we ought to be doing. We are not talking big money, because these are not huge numbers of people, so a small amount of money could go quite a long way.

Tony Wilson: One of the 47 funding streams that we identified as currently existing is providing that support.

Q52 Harriett Baldwin: Would the same thing apply to people who have caring responsibilities for either a disabled family member or an older family member, or are we talking very small numbers there?

Ralph Michell: Again there is huge variation there. Charities who work with young carers told us that one of the biggest problems is that carers are under the radar at school. So you can have a young person who is looking after a mother with a serious drug problem, say, who does not really want to tell anyone about that, which can mean that there is a sudden episode that means that young person misses school for a day. As far as the school is concerned, that young person is a truant and a problem, rather than someone who requires extra support. I think a lot could be achieved just by having better relationships between schools and the charities who really know about those young people.

Q53 Harriett Baldwin: So if we were to recommend in our report-I am not saying that we would, but if we were-to extend eligibility to that subset of young people, would the panel think that made sense?

Ralph Michell: Yes.

Q54 Harriett Baldwin: Okay. Moving on now to people with disabilities, can you see any reason why the Government has not allowed disabled participants on the Work Choice programme to attract these wage incentive payments?

Ralph Michell: No.

Tony Wilson: No. There are probably less than 2,000 young people-under 24-year-olds. The data are not quite that easy to interrogate, but at the most there are probably a couple of thousand people who would be eligible.

Q55 Debbie Abrahams: I was struck by what Rob was saying earlier about apprenticeships and the low levels that have been made available to young black men in particular. The evidence that you provided, Rob, I think appalled us all when we read the figures: 55.5% of young black men currently being unemployed, doubling since 2008, and the fact that Asian young men as well are experiencing similar difficulties. As I say, we have looked at it in terms of apprenticeships, but what else within the Youth Contract needs to happen to address these appalling figures?

Dr Berkeley: I am not sure that there is any incentive in the Youth Contract to deal with this particular problem or the particular problems that people from minority communities might face. We talked about, for example, who is involved in delivering that part of the Youth Contract. I think it is unlikely to be organisations that are led by people from minority ethnic communities who might have that additional insight into what some of the needs might be. We are not convinced that there are any measures of success that might seek to take into account how big a problem this might be for certain communities.

Q56 Debbie Abrahams: Okay, so it is too narrow as it stands. If we think more broadly then, what else should be there?

Dr Berkeley: I think the rest of the panel concur: it is not going to be the sole solution to this problem, but even so I think this could potentially leave large parts of our society well behind.

Debbie Abrahams: Absolutely.

Ralph Michell: Could I interject? I think a starting point, at the very least, ought to be transparency. The Work Programme has been up and running for a year. We ought to know how many black people it is helping or disabled people or homeless people. These are the questions that all of our members are asking and you are asking, and DWP are refusing to release the data. This is totally incredible to me. This is a Government that, with the other hand, is asking our members to respond to consultations about open data and being the most transparent Government in our history or whatever. I cannot see any justification for not releasing that data, and that, at the very least, would enable us to know if there is a problem and start to think about what we might do to address it.

Q57 Debbie Abrahams: I think you are absolutely right, and certainly I think the members of the Committee were concerned about that, as well as the longer term evaluation. As I said earlier, this is not just about the skills base. Again, work I did many years ago indicated that even with people of equivalent qualifications there was still discrimination that occurred. What should we be doing to support employers to be more open in their recruitment practices?

Dr Berkeley: There is a move towards name-blind application forms. I think that would get us some way; at least it would get us to the interview stage a lot more easily. I think the Government’s approach so far has been to ask businesses to sign up to a compact. It does not really feel as if there is much drive to make this happen.

Katerina Rüdiger: On your last point on the business compact, at the CIPD we have also signed that compact and we are supportive of it and encourage our members to be so. However, we also pointed out to the Government when they created the business compact that, although it is a good step in the right direction, if organisations at all levels in HR do not really understand why they are doing it and do not really understand the business and social case for social mobility and diversity, it will not work. So I think a lot of work needs to be done on that, and we certainly try to do our bit in terms of making employers understand that, and that is something that needs to be done to make that work.

Tony Wilson: To give one example, Diversity Works for London, which is a London organisation linked to the GLA, is currently tendering to develop a diversity toolkit. That is one simple thing. That will basically mean employers will be able to plug in their own data and see what the benefits are. Unfortunately, there is not really clear, conclusive evidence that diversity leads to higher productivity, more growth or whatever, but making it simpler for employers to see how they can plug in the benefits for them and the wider social and economic benefits-particularly the benefits for their business-is clearly really important.

There is one point I would make on how you better target or support particular groups. I do think this comes back to targeting and supporting particular areas and the most disadvantaged areas. So although there is very clear evidence of discrimination on the basis of names when people apply for jobs, also I think we should be doing more to target even down to a very local, ward level. There used to be these Action Teams for Jobs that were run through Jobcentre Plus, and there has been any number of other initiatives that give that local targeting, so that you are more likely to get that sort of peer mentoring and communitybased groups providing support. That has to be part of the mix as well, and we may lose that in the black box.

Debbie Abrahams: That is very helpful.

Q58 Chair: To what extent is that issue about regional and localitybased disadvantage overlapping with the issues to do with ethnic minorities?

Ralph Michell: I think it will. We mapped wards where more than one in four young people were claiming JSA, and many of them will coincide with areas that have higher than average BME populations. A lot of them are small coastal towns, so I think one of the other dangers is that there might be communities, small geographical villages or whatever, that are parked just in the same way that we talk about hard-to-help demographic groups being parked in some of the welfare to work provision that is around.

Could I just, very quickly, mention something you might be interested in looking at? One of our members, Tomorrow’s People, have taken an approach where they have taken ownership of a hamlet and said that they will blitz it and make it their mission to get the young unemployed people in that area into work. I think I am not misdescribing that. That might be worth looking at.

Q59 Debbie Abrahams: In relation to the geographical variations, which again are brought into sharp focus as much as particular subgroups experiencing this differential unemployment, is the Youth Contract sensitive enough to be able to deal with that at the ward level that you are talking about, for example? Does it allow for that to be addressed and, if it does not, what should we be doing?

Tony Wilson: It does in as far as the funding follows the individuals to a large extent. Take 16 and 17-year-old provision: providers will have to work especially hard in those estates or those small coastal areas or those communities where there is particularly high worklessness, but we could do more. Looking at the Work Programme as an example, there is an assumption that these differences within very large CPAs2 will broadly balance out. I think we are getting close to the point where we should say we need separate funding that can be drawn on by them and by others to target, on a locality basis, particular areas.

To answer the point made about how far there are correlations, they do overlap. Things like being from an ethnic minority group, being in social housing, being disabled, and being a lone parent do all overlap with geography. I think the key point here is that, as much as anything, the prescription will be different for those areas from what it would be for somebody who is from an ethnic minority community and lives in an affluent area, where you might say that the disadvantages will be different. That is why I would say that looking at how you target areas is a key part of the answer.

Ralph Michell: The role of local authorities here is key, because if you talk to a local authority they will tell you where unemployment is at its worst. You get a palpable sense of how they know their area and the local charities that work there and so on and so on.

Debbie Abrahams: It is partnership working.

Ralph Michell: Indeed, and I think more could be done. What we suggested was that the Government could build on its City Deal approach, where it strikes deals with localities and says, "In return for you really achieving a step change on youth unemployment in this hot spot, we will provide you with greater flexibility and support."

Q60 Debbie Abrahams: My final question is in relation to your suggestion around paying work incentives up front, Tony. Are you concerned that this may lead to collusion and fraud and, if you are, what would you do to prevent that?

Tony Wilson: We suggested or I recommended that Work Programme providers should be able to administer the subsidy and, if they wanted to, pay it up front in full. I think you need to mitigate those risks, so in previous programmes like the Future Jobs Fund, but also in the New Deal as well, there was a process by which an independent party in the case of the New Deal-Genevieve will correct me if I have this wrong-did provide some brake ensuring that this was a real vacancy, that it qualified for the subsidy, and that the job met minimum standards, as it were. This was managed by DWP for the Future Jobs Fund for 150,000 jobs. There was a central point in Jobcentre Plus that made sure that there was additionality and community benefit. So I think you would need to do that; you would need to have brakes.

The reason why I am arguing that it should be paid up front is that I think the incentives align in that the Work Programme providers can only get paid when they keep somebody in work for six months. So they will make the judgment, and they will not use those subsidies lightly. They will use them where they can get additional impact. I did also say in our evidence that I would not distribute all of the subsidies in that way. I think we should keep back a proportion and say that those will then go to providers who achieve their minimum performance for young people. So you will not be able to just give your subsidies to Joe Bloggs Employer because you want to build the relationship. A level of subsidy would be kept back so that only those providers who are meeting and exceeding their targets can then access them. You then get further into that group who are harder to help.

I do think there are issues and there are risks, but I think the bigger issue, frankly, is that-and the SCVO said this in their evidence; it was a new point to me-you create an odd incentive if employers can only get their subsidy after six months. For example, you create an incentive, that they will not take on people who they think might leave the company in three months. They will not take on people who they think are so good they are going to go. They will not take on people, and, potentially, may not invest in them, in case they take those skills elsewhere within six months. So I think there is a real risk that employers do not value the subsidy as much because it is paid totally in arrears, and that was not how the New Deal was run and it was not how the Young Person’s Guarantee was run.

Dr Knight: No. The wage subsidy was paid weekly; it was a £60 regular payment and then £750 went particularly for training to the person in the way of subsidy. So the New Deal for Young People wage subsidy was slightly different and it did have that training component, which can be quite important, but I would agree that having all of the payment itself at the end can be quite risky.

Q61 Teresa Pearce: We have had such a wideranging discussion that much of what I was going to ask has been answered. I was going to really talk about youth employment and the skills policy landscape, but, just talking about skills, when the public hear that young people do not have the skills, they automatically think they are not numerate or literate, and often that is not the skill the employer is referring to. What they are referring to is somebody who does not understand that they have to turn up at nine o’clock every day or it is not appropriate to come to an interview threequarters of an hour late and dressed as if you are about to go to the beach and things, basically because they have had no experience of work. I was just thinking when you were talking about your own experiences of having parttime jobs. In the old days someone worked nine to five and then you had Saturday jobs. There are no such things as Saturday jobs now because we have a 24hour, seven-days-a-week retail sector. So it is a problem, because that is where 14 and 15-year-olds learnt what it was to go to work, and that is the skill that is often missing. My question is: what is education for then? If you are educating people, surely it is so they are ready to meet the world when they are 16. Schools are incentivised to get exam results and to have low exclusion rates. If they are not incentivised in some way to show that 16-year-olds who are not going to university go into work, you are going to have this problem getting worse and worse and worse every year, which is not really a question; it is just a statement.

I just think that what we have developed is a really big market for organisations to come into and make a bit of money out of the problem, rather than looking at where the problem came from. That is how I feel having listened to everything and my own experience, but the worrying thing is this issue of the market-this over complication there seems to be. You have talked about the number of agencies involved here. What risk does that proliferation of agencies create for the successful delivery of the Youth Contract? That is a really long question, but it is quite depressing because what we all want is a solution and we want young people to have the best possible start, and I am not sure it is going to work.

Tony Wilson: We have argued that there are three key things that we want in that transition. The first is attainment. We want to make sure that by the time people reach 24 as many as possible have Level 3, or if you have not got Level 3, you have Level 2, and we are lagging our European competitors on both of those. The second is being in work: we want to make sure that by the time they get to the end of that transition somebody is in sustainable employment or, if they are not, that they are being supported to get work or, if they are not able to work, they are being supported too. Thirdly, it is about making sure that during that transition people are not spending too much time doing nothing-that they are being supported to stay in as they go.

Those outcomes or measures exist across the five central Government Departments that are interested and the half dozen or so agencies and the any number of local organisations that are funded by Government or, indeed, themselves are the sources. They do exist, but they are not held together in a coherent way. I simplify massively, but the local authority wants to make sure that 16 to 19 year olds are staying in education; the school wants to make sure they get attainment; Jobcentre Plus wants to make sure they get a job. We need to bring that together. We need to knit it together in a single system.

Q62 Teresa Pearce: You are not saying we need a tsar are you?

Tony Wilson: I am saying we need a single system. Whether that is localised or contracted out, whether it is a central Government agency-the ACEVO report talks about youth employment partnerships-let us put it all in one place with a single point of accountability.

Q63 Teresa Pearce: So are you saying you think the local authority is key in this?

Tony Wilson: Ralph, I am sure you would have a view on that. I think they are absolutely key in co-ordinating activity. Whether they would be the lead depends on what system you go for.

Katerina Rüdiger: Just to come back to what you said earlier about employability skills, we completely support that. We have done quite a bit of research on that, and we think education and employers should work together to build the world of work into education, so employers need to get involved in schools. But it is also schools that need to work with employers, and then employers need to offer early and high-quality experience of the working world. We talked a lot about work experience placement, but there are also other opportunities, like internships. We discussed this earlier as well. I think that is why good vocational education and training and apprenticeships are so appealing, because they combine the workplace and classroom learning. That is why people do not exit the education system and are expected to suddenly function in the world of work. They have a slower transition and learn those kinds of skills you really only do learn in the workplace whilst they continue studying.

Ralph Michell: The fragmentation you were talking about hits most severely the most disadvantaged young people. For instance, it is the fact that so many disabled young people will do their transfer from children’s social services to adult social services without employment even being mentioned, or it is young people leaving local authority care at 16. Okay, some local authorities are very good at thinking about where their care leavers are going to go, others not at all. Or it is young people who are caught up in the criminal justice system in one way or another. This hits them most, and I suspect we might search forever for a nirvana where it is a perfect, joined-up system, but we could clearly do better.

Dr Berkeley: There are some really good examples. There is some really exciting news from Bradford, where schools are being linked very closely to the future growth of the labour market; businesses are very much involved from the age of 14 upwards. There is a role clearly for local authorities and there is some imagination going into it in certain places. I wanted to say something positive.

Now something negative: mentoring was seen as a real key to addressing some of the inequalities that people from minority ethnic communities were facing, but I have seen, in the past year and a half, a number of mentoring schemes falter. Things like the Windsor Fellowship are under threat; things like the REACH programme abandoned. The possibility of getting that kind of advice, particularly when the advice system in schools is not as good as it could be, seems to be dissipating, and that seems to me a real loss.

Q64 Chair: One of the things that I have often wondered is whether this problem of young people not presenting themselves well is something that impacts quite heavily in ethnic minority communities. I think a lot of employers are looking for somebody they can talk to at an interview or whatever, and often I think there is a nervousness on the part of the youngster or whatever. Do you want to comment on that at all?

Dr Berkeley: In some communities-and this is ethnic minority communities and broader than that-when there are long periods of perhaps generational patterns of lack of work the understanding of what the work relationship is and could be just is not there. So things like mentoring become really important because they establish a relationship with somebody in that employer role who is not your employer yet, and get you used to those kinds of skills that you might need.

I think that there is a long way to go before those become comprehensive. They seem to be a little bit piecemeal depending on where you live and if you happen to run across the right scheme. There appear to be lots of adults who are very keen to be supportive in this way but not enough opportunity for those links to be made.

Q65 Chair: Do you think education is doing enough or is it that certain people just do not take advantage of what is on offer? Is there a mismatch there at all?

Dr Berkeley: There is a mismatch. People have talked already about independent advice and guidance in schools; it is just not up to where we would like it to be. I think that for a lot of schools it is very difficult to create a relationship with businesses. They are seen as very distant. I am pleased to hear what Katerina is saying about building those education and business links, because I think they are pretty crucial.

Q66 Teresa Pearce: There is a youth project in my constituency-it is mainly young African kids-and they recently did a fantastic thing. They got in touch with the Olympic Park, who were then looking for people to work in catering during the Olympics on London living wage, found out how many jobs there were, did drama and roleplaying with these kids about how you present at an interview, helped them with their CVs, and invited the employer to them so they could interview 60 people in a day. 59 of them got a job, so I do not know what happened to the other one who, sadly, did not. That is real intervention, but it takes a lot of hard work. If you have people from whom their result is a tick in a box that they have done one thing rather than the end outcome of getting someone into work, it is really hard.

I am really interested in this idea of getting local authorities overseeing the provision. I think that would be really good, because if these kids are not in work, sometimes it is antisocial behaviour-it is all the other things that impact on local authorities. If it was not local authorities, who would you suggest it should be?

Ralph Michell: It could be charities; it could be the Prince’s Trust. Some local authorities would be brilliant at this, some would not. Some charities would be brilliant at this, some would not.

Teresa Pearce: I need answers and am getting more questions.

Tony Wilson: It could equally be private sector providers who are really good at managing supply chains and managing organisations and also at delivering results themselves. We are totally agnostic about whether it is public, private or voluntarily sector led as long as you are getting the right people for that job and, as Rob said, all young people are different. There are going to be different needs for different people, so it will not necessarily be that we can put the local authority in charge and expect all the other problems to be solved-I know you are not saying that. I think we could usefully test some different approaches, as the Government is doing to an extent with things like Community Budgets, which will allow pooling at a local level.

Q67 Teresa Pearce: Where do you think Jobcentre Plus fits in this? There is an intention they act as a youth hub. Do you think that is going to be effective?

Katerina Rüdiger: Just to give you some feedback from our mentoring initiative I mentioned earlier, where Jobcentre Plus helps us to match a young jobseeker with an HR professional who is volunteering to help mentor the young person, what has come out quite clearly is that Jobcentre Plus are perhaps not always best placed to give advice and guidance to the young person, purely because of the lack of time. A Jobcentre Plus adviser has, on average, five to seven minutes to spend with a young person. If you think about an older person losing their job and going to Jobcentre Plus, that may be enough. They might just want to know what adverts are out there and so on, but for a young person it is completely different. They need to have advice on how recruitment works, on what jobs they might want to apply for-a whole raft of things-and there just is not the time; five to seven minutes is just not enough.

I think that is why our mentoring scheme was so successful, because we have managed to pick up some of those things, but, yes, it is a little bit worrying, isn’t it? That is why I think the suggestion, via Inclusion from Tony, to have a single agency is quite compelling, although obviously one needs to be careful about suggesting creating any new bodies, but there seems to be a gap there in support.

Tony Wilson: About 100,000 young people start a claim for JSA every month. It is a significant number, and this all falls down unless Jobcentre Plus are right in the middle of it. Whether they are organising it or co-ordinating it, I am less concerned about, but they have to be in the middle of it. They have to know what is in their patch and be referring people to that provision and, if appropriate, buying their own provision. There are some really good examples of that happening now. Some districts and some offices are doing a fantastic job, others less so. So Jobcentre Plus has to be right in the mix. It does not work without them.

Q68 Teresa Pearce: The problem is how you measure success. Earlier evidence we have had is if the number of young people claiming JSA goes down, that is a success, but if the number of young people claiming JSA goes down but youth imprisonment goes up, that is not a success, is it? Just because someone comes off JSA does not mean you have succeeded in getting them into work. There are all these different measures, but how do you co-ordinate it?

Tony Wilson: Absolutely, yes.

Katerina Rüdiger: Absolutely.

Q69 Teresa Pearce: That is the worry. Everyone is doing their little bit. It is like what somebody mentioned about employers being more reluctant to go to Jobcentres to advertise. One of the reasons for that would be quite often people are pushed to go to interviews they are completely unsuited for just so they fulfil the requirement for the Jobcentre. If you are an employer, you are in business and, as my exemployer used to say to me all the time, "We are a business, not a charity." You are in business, and what you want is to minimise your risk, so you do not want to take on people who are not going to work out. You do not want to take on people for the good of society particularly. That is not your main objective. What you want is people who are going to help you grow your business. So in terms of the lack of skills, people presenting badly, or people who have been sent to you by Jobcentre Plus when they are completely unsuited just because they have to go to four interviews that week, we seem to have got to the ridiculous position where we need to bribe, virtually, employers to take people on, when actually they want to take people on; it is just they are afraid of the risk. Sorry, it just depresses me that we are spending so much money and time trying to deal with an end problem and not intervening at the earlier age of about 14. I just do not know how we do that.

Chair: That is the bell for prayers, and I think Teresa has very well summed up the sense of frustration you can often have in this particular subject. But we are very grateful to you all for coming and giving us very interesting insights from different parts of this picture. Thank you very much indeed; it is much appreciated.

[1] Ev ??

[2] Contract Package Areas

Prepared 19th September 2012