Welsh Affairs - Minutes of EvidenceHC 264

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Oral Evidence

Taken before the Welsh Affairs Committee

on Wednesday 3 July 2013

Members present:

David T. C. Davies (Chair)

Guto Bebb

Geraint Davies

Glyn Davies

Jonathan Edwards

Nia Griffith

Simon Hart

Mrs Siân C. James

Jessica Morden

Mr Mark Williams

________________

Examination of Witnesses

Witnesses: Mark Hoban MP, Minister for Employment, and Martin Brown, Jobcentre Plus, Work Services Director (Wales), gave evidence.

Q145 Chair: Good afternoon, Minister. Thank you very much indeed for coming along this afternoon. We are going to launch straight into this, if we may, because time is, as always, limited. The first question will not surprise you, and that is that the Department has released the second set of Work Programme data, which I have here. What is your view about what this shows for Wales? Clearly, just to prompt you a little bit, it does not appear to be very good news for Wales in that we lag behind virtually every other region of the United Kingdom. I wonder if you could just tell us a little bit as to why you think that might be the case.

Mr Hoban: Thank you. Can I just introduce Martin Brown? Martin might be known to some of you. He is the work services director for Wales and will give some local colour perhaps later on.

The Welsh labour market is a difficult one, but I do not think it is in any way particularly more challenging than other nations across the UK, and we have seen some progress in the Welsh labour market in recent years. The Work Programme results published last week tell us that people are capable of exceeding the targets, and you will see in that graph some providers who have performed exceptionally well, but, also, there are some who could do better. The performance across the piece is better than it was at the end of the first year. We are making progress, but more needs to be done. I visited the providers in Wales a couple of times, Mr Davies, and they are aware of their challenges, and we are very keen to help them and badger them to be successful.

Q146 Chair:Is the problem therefore with the providers or is it with the customers?

Mr Hoban: If you think about who is on the Work Programme, particularly thinking about the people returning from the Work Programme over the next two or three months, they have been unemployed for at least three years, often longer, with a range of barriers to work, and work will be needed with them to remove those barriers. The providers are operating in a quite challenging environment; some of the provision is subcontracted. That is easier to do in areas where there is a really strong provider base to choose from. In Wales, it is a slightly harder pattern. I was in Swansea last week, talking to people who were providing the Skills for Work (Wales) Programme, where there have been changes in providers because the providers have not been up to scratch where we subcontract work out. It is a challenging environment, but one where I am confident that we can make progress and the providers need to make progress, too.

Q147 Geraint Davies: You said, Minister, in your opening remarks, that Wales is a lot more challenging than other areas, but there was a socalled austerity audit published in the Financial Times, which said that the financial impact per head of the working population in Wales was £549 and in England it was £470. Would you not accept that, given that there is a much higher proportion of people in public services where you are cutting, there is less room for generating new jobs, and therefore things like the Work Programme cannot really work as well in weaker economies of your making?

Mr Hoban: No, I do not agree with that. If you look at the results in Scotland, for example, where both providers exceeded the targets by some way, you can see that the programme can work in very challenging parts of the country and be very successful.

Q148 Geraint Davies: In addition to the fact that the cuts are deeper, of course, in Wales, which was affecting the outcomes for the Work Programmes, this spend is less. In last week’s spending review for the infrastructure proposals, am I right in saying that the great mass of that was in London and the southeast and very little for Wales? Would you think that will have a future impact of, again, Wales doing much worse than anywhere else because of being starved of resources?

Mr Hoban: I do not think I would want to talk down Wales and its prospects.

Q149 Geraint Davies: No, no, I am talking about your actions.

Mr Hoban: No. What we can see in Wales is a labour market where there are 32,000 more people in work this year compared with last year, where there has been private sector job creation. The employment rate in Wales has gone up over the course of the last year, so the proportion of the people in the labour market has gone up. That is a positive story, and I just think that, if we are going to try to attract more jobs and more investment into Wales, the last thing that needs to happen is for the Welsh economy to be talked down.

Q150 Geraint Davies: No, no. There are private sector investors investing. I was just talking about the Government focusing their spend on the southeast and their cuts in Wales. On these particular figures, though, last month we saw that 23% of people in Wales have entered the Work Programme since it began, and this is the lowest of any British region. Is there any explanation for that other than what I am saying-that you are cutting more and spending less in Wales?

Mr Hoban: No. That is complete nonsense, actually.

Q151 Geraint Davies: Why is it then?

Mr Hoban: If you look at the people coming on to the Work Programme, there are criteria that are used to assess whether somebody comes on it. If you are over the age of 24 and you have been unemployed for more than a year, you will come on to the Work Programme. If you are a young person and you have been unemployed for more than nine months, you will come on to the Work Programme. We are looking at the main ESA payment groups, which I am sure we will come on to later on. There are criteria for people to move into that payment group. There is not some sleight of hand that is happening that says we will put fewer people in Wales on the Programme. The people who go on the programme in Wales are those who are eligible to do so.

Q152 Geraint Davies: What I am getting at is why we are less successful in Wales on the Work Programme, because you are suggesting it is not because there are deeper cuts and less investment from the Government. So what is the reason?

Mr Hoban: The Work Programme is there to get people into work-principally in the private sector. This has shown progress, but the things that the Work Programme providers need to think about are better employer engagement and how they provide post-employment support to people on the programme and tighten that up. There are some challenges-

Q153 Chair: Minister, what you are really saying then, in answer to my question as well as Mr Davies’s, is that the problem that exists is more with the providers than with the customers.

Mr Hoban: I just want to add on one bit to that and I will come back to your comment. I know that there are some challenges in the labour market in Wales, and, when I went down to see the providers last November, they were talking about some of the things in the labour market. One of the big recruiters in the Swansea area is Amazon, and that is very good. It employs a large number of people, but, on the whole, it is temporary work. It is seasonal, so people are laid off on 24 December. It is good to get some people into work; it is good for someone’s CV; it gives them experience; but if you have a labour market where there is a high proportion of temporary jobs, it does make it harder to hit the six-month job outcome, which is the basis of payment in this scheme. We only pay providers if they get someone to work for six months, on the whole. If it is a lot of temporary work in an area, it takes longer to knit together that six months than in an area, say, where there are lots of permanent fulltime jobs.

Q154 Geraint Davies: What is happening in Amazon-indeed, they link together with the Post Office as well-is this seasonality, with an enormous peak, as you have just pointed out, approaching Christmas, and then they lay people off. In that context, there is no particular need for the Work Programme, is there, because they are just taking people on and laying them off, and they would do that anyway?

Mr Hoban: Mr Davies, the reality is that people on this programme have been failed by the system for over a year before they come on to this programme, who do not have a job, for whom that seasonality has not worked, because they have been unemployed continuously for a year. The fact is that we have got them into work; we have got them into employment for three months. We have been through providing them with training courses, employability skills, CV writing, and making sure they understand exactly what Amazon is looking for. It does mean that some people who have been out of the labour market, out of work for some time, have a job as a consequence. They have selfesteem and they will be able to look after their families. What we need to do and what the providers need to do is build on that and make sure they get six months’ work and break that cycle of worthlessness that had existed prior to this programme.

Q155 Mrs James: A recent study was critical of inadequate support provided for single parents by the Work Programme providers. Wales has a much lower job outcome as in other areas for single parents than the British average. How satisfied are you that the Work Programme providers and subcontractors have the means to support lone parents?

Mr Hoban: That is a really good point, Mrs James. One of the things I am very conscious of in the work I have been doing since I came into this post in September is how we ensure that the support for the hardest to help is there. One of the areas where we need to do more is around single parents-lone parents. We have set up a best practice group to look at a whole range of areas around raising performance. I am keen that they look at single parents. It is not all bad news. Working Links have worked with Gingerbread, for example, and have got people into work, half of them with Marks & Spencer, who are very good at supporting lone parents. We need to find what has worked in that situation and what we can replicate elsewhere, because we need to move more people closer to the labour market. The success of Working Links has demonstrated that we can do that. That needs to happen more often, in more places and for more people.

Q156 Mrs James: When single parents come to see me, the biggest challenge is child care. It is just the logistics of getting affordable child care for the hours that they need to work to meet the requirements of the Work Programme. That is something that you have picked up on yourself. Do you see a way forward to helping those people a little bit more, giving them that extra support?

Mr Hoban: We need to be creative. There is additional child care support coming through universal credit, which will help for those who are working less than 16 hours a week. That is a positive move. We need to do more to ensure that child care is available when the parent wants it, rather than when the child care provider decides to provide it. We are looking, as part of universal credit, to see what more we can do to encourage child care providers to come forward and offer care at hours that suit parents rather than suit themselves.

Q157 Mrs James: My next question is about creaming and parking. It is about those difficult-to-place people-those people who need the extra bit of help. The Work and Pensions Committee said last month that there was growing evidence that the Work Programme was "failing to reach jobseekers with the most severe barriers to employment," such as problems with drug and alcohol dependency and literacy and numeracy problems. How satisfied are you that the Work Programme is helping those people? Is there a better way to differentiate the payments to support those furthest from the labour market-for instance, by taking into account their challenges?

Mr Hoban: The payment model we use offers greater incentives for some of the harder to reach, so someone with the most complex needs can earn a provider up to £14,000. Someone with more straightforward needs is probably round about £3,000 to £4,000, so there is that incentive there.

There is an issue about what works, and that is why we have set up a best practice group. We need to get providers to think more carefully about the type of provision we have in place to support people to get back into work, but we should also bear in mind that there are some people on the programme who have been out of the labour market for some time. We published figures recently on people who have been found fit for work who have been on IB. Some people have been out of work for 10 to 15 years. Their distance from the labour market, if you think about how much the labour market has changed in that time, is quite significant. They need more support to get into work, and we need to encourage Work Programme providers to do that. They have minimum service standards in place-that is part of their contract-and we do audit those standards; and we take that very seriously.

Q158 Mrs James: The particular challenge that I am hearing from many employers is that those jobs are no longer there into which you could slot longterm sickness people if they have been unemployed for a long time. They are finding that the challenge is to find posts for them. The jobs just are not there.

Mr Hoban: That is an interesting point and we have to work quite hard to support employers. Clearly, the model underpins the Work Programme of wanting to get somebody into work; you only get paid if they get into work for six months, or, if you are in an ESA group, it is three months. That requires the Work Programme provider to work with the employee and the employer to get them into work.

We are also finding that, for many people with longterm health conditions, the best route back into work is selfemployment, so they can manage their health needs around their employment. I was in Plymouth a couple of weeks ago visiting two providers, one of whom was Working Links, who is in Wales as well. They are working very closely. I met a young man there who had been out of work through ill health for 13 years. He had been studying while he was recovering from his health condition and was now going to start his own business doing media production, using the skills he had learned but was able to have that flexibility in working practices and working hours that helped him manage his work condition. We need to think more creatively than we have done in the past.

Q159 Jonathan Edwards: We have received evidence during the inquiry from second tier subcontractors in Wales that they are not having many referrals, if any. Does this indicate that the programme is failing the needs of some participants or, even worse, that there is a fundamental flaw in the design of the programme?

Mr Hoban: In terms of the type of programme, we hold the prime contractors to account. They have to have in place the provision that they believe generates job outcomes, otherwise they will not get paid. So there is a very clear focus on the primes. They need to make sure that the people to whom they subcontract are in a position to deliver good outcomes. Actually, Rehab JobFit have a model where they are the managing agent. Effectively, all of their work is subcontracted to the next tier down.

I think there is a challenge. People were signed up at the start when providers had a different view about what was needed in the Work Programme. We have seen some second tier providers leave the programme; we have seen some come in. The stocktake that was published last week showed a net reduction in the voluntary and community sector, with the participance of only seven, which, given the criticism that there has been in the press, is lower than people would have thought. It is really about the primes ensuring that the subcontractors are doing what they want them to do, and that is get people into work.

Q160 Jessica Morden: Can I just ask what has happened to longterm unemployment since the Work Programme began in Wales?

Mr Hoban: Longterm unemployment has plateaued across the country since the Work Programme has come into force, which demonstrates that-

Q161 Jessica Morden: In Wales.

Mr Hoban: In Wales, Martin?

Martin Brown: It is broadly consistent with the UK figures.

Q162 Jessica Morden: It is increasing though, is it not?

Martin Brown: Its plateau increased a little in the last few years.

Q163 Jessica Morden: It has increased rather than-yes. What about longterm youth unemployment?

Mr Hoban: Looking at Wales, the change in 18 to 24-year-olds who have been unemployed for more than six months has fallen by 16.4%. That is just slightly less than the rate of the United Kingdom as a whole. It has fallen particularly in south-west Wales.

Q164 Jessica Morden: Longterm youth unemployment since May 2010 has almost doubled in Wales at a time when the Work Programme has come up.

Mr Hoban: Don’t forget that the Work Programme only came in in 2011 and it is a two-year programme as well.

Q165 Jessica Morden: It did. The unemployment trend is going up since the Work Programme began. One of the questions that relates back to Siân James’s question is that the work providers and subcontractors told us in evidence that they were seeing people who were not fit for work. Why do you think that is?

Mr Hoban: If you are looking at the people who have been referred to the programme and look at payment group 6, which is the main ESA group, these are people who have been through a work capability assessment and have had a prognosis that they will return to be fit for work within a 12-month period. At the time they joined the programme they clearly were not ready to go to work, otherwise they would be claiming JSA. One of the challenges with that group is how you keep them close to the labour market and ensure that you give them the right support so that, when they are fit to return to work, they get employment. Some of the people I have met who have been in payment group 6 have got back into employment long before we expected them to do so.

Q166 Jessica Morden: We had evidence from subcontractors who said they were seeing people with serious medical conditions who were awaiting surgical procedures and were asking-I think the quote was-"Why are they on this programme?"

Mr Hoban: You can have a medical condition that is going to be subject to surgery and still be in a position to work. There are lots of people who have medical conditions. They might be waiting for a hip replacement, but they are still working.

Q167 Jessica Morden: I am just telling you what the providers and subcontractors said to us. They are seeing people every day and perhaps you are not, and that would be their opinion, which I thought was interesting. In the last two-year data that came out last week, with regard to those ex-incapacity benefit people who are on the ESA, of the 2,000 that were referred to the Work Programme, there was a job outcome payment for 10. Do you think that is acceptable?

Mr Hoban: No. That is why we are driving up performance and that is why I have asked every provider to come up with an action plan to demonstrate how they are going to improve job outcomes for the ESA payment groups, because I want them to do that. It is important that, rather than writing these people off, as has happened in the past, when people are stuck on incapacity benefit for years without anyone looking at them, we want to make sure that we give them help to get back into work. This is the first time that any Government have launched a major programme to help people who have been out of work through ill- health back into employment, and it is something that we are proud of.

Q168 Chair: Minister, I have just been doing a quick back-of-the-envelope calculation here. The scheme so far has cost £736 million, I believe, according to a Library note, and 132,000 people have been placed in a job, which works out at £5,500 per job, which is not perhaps too bad. It is estimated that the scheme is going to cost up to £5 billion in 2017. So, unless a lot more people are getting placed, that would work out at a very high figure for each job placement.

Mr Hoban: Mr Davies, the distinction between this scheme and its predecessors-by the way, the Committee might want to go back and look at the figures we published in January 2011 about the cost of the Flexible New Deal programme-is that this scheme predominantly pays for people by results. The Work Programme providers get a small attachment fee. That disappears next year. After that, they are only paid if they are successful, so, if no one gets into work, they do not get paid and it does not cost the taxpayer. If we spend all £5 billion, it is because the scheme has been phenomenally successful and got more and more people into work. So that is one area of public spending perhaps you would like to see go up.

Q169 Geraint Davies: We did mention Amazon earlier. I have just been thinking that, basically, if we refer someone to Amazon who will be taking up labour anyway-it is normally people they have had before in previous years-and, instead, they take up someone they have not taken up, we give them whatever it is, £3,000, and they do not take on someone else, we are not really making much of a difference at all. We are just giving £3,000 to Amazon, who then do not pay any tax, as we know.

Mr Hoban: Who is giving £3,000 to Amazon?

Q170 Geraint Davies: You are-the Government.

Mr Hoban: No. Sorry, Mr Davies-

Q171 Geraint Davies: You give money to people to go on to the Work Programme in Amazon, basically stopping someone else getting a job there. We give taxpayers’ money to them and then they do not pay any tax. Is that sensible?

Chair: Let Mr Hoban answer.

Mr Hoban: No, sorry, that is a misunderstanding of the nature of the programme. We do not give Amazon any money for recruiting somebody through the Work Programme.

Q172 Geraint Davies: You give the provider the money.

Mr Hoban: The provider gets paid because they are working with someone to get them into employment. Quite often, these are people who have not been in work for one, two or three years, or even longer periods of time. Your suggestion would be that we should write people off who have been out of work for over a year-that we should not be interested in them. What we are doing in this programme is equipping people with the skills that they need to be competitive, to go into open competition with others who perhaps have just come out of work.

Q173 Geraint Davies: There are not enough jobs, I suppose.

Mr Hoban: There is work. There are an extra 32,000 more people in work in Wales than this time last year, so there are more jobs being created.

Q174 Geraint Davies: But no more economic output across the UK; is that right?

Mr Hoban: We are seeing more jobs being created. The private sector has created 1.3 million new jobs since May 2010 and created more jobs in Wales. This means that people who previously would not have been considered for those jobs are having a chance of applying for a job, getting it and getting the dignity that comes from that.

Q175 Guto Bebb: Listening to the questioning, to what extent do you believe that the negative attitude of the Welsh Labour establishment in Wales towards the Work Programme is having an impact, because we have seen, for example, the Welsh Labour Government refuse to allow anybody who is on the Work Programme to access ESF-funded support programmes? The Work Programme is all about the black box approach, where you try and ensure that the relevant and appropriate training is available to clients, and yet, in Wales, we are seeing people in dire need of that support being denied this because of a political decision by the Welsh Government to refuse to allow people on to those ESF-funded programmes.

Mr Hoban: You make a very powerful point. There is an opportunity for this Committee, in a non-partisan way, to raise that issue, because it does mean that people in Wales are not getting access to training courses. If they lived in England, they would get access to SFA-funded courses where there is ESF money behind them. That means it is almost as if the Work Programme providers have their arms tied behind their backs.

Chair: By coincidence, that very point is about to be raised by Mark Williams.

Q176 Mr Williams: It is-absolutely. My friend next to me preempts me. He raised this issue and you have answered very well on that, Minister. What was your understanding of the Welsh Government’s rationale for that decision? Were you notified or consulted before the decision was made?

Mr Hoban: The decision in Wales was made before I took on this role, so it is something we have to live with. It is disappointing. I am very keen to meet the new Minister, Mr Lewis, to see if we can get a change on this, but this is not the only area where there is a problem. For example, the Welsh Assembly Government will not pay for any skills course or mandate someone to take part in that course. That meant we set out base skills for the Work Wales Programme, which has been very effective at improving people’s English language skills. I was in Swansea last week, awarding certificates for people who have completed a course provided by A19, which is a very good provider in this area. A more collaborative and more supportive approach from the Welsh Assembly Government will be hugely helpful in getting more people into work.

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Q177 Mr Williams: You are looking forward to meeting Mr Lewis, the new Minister. How would you characterise the relationship to date and how you can improve upon that, because it is important?

Mr Hoban: I have not met Mr Lewis. I have no previous relationship with him, but I hope that what we can show is that there is a way of working together that will improve job prospects for the longterm unemployed in Wales. That is what I want to do. I do not want to make party political points about it. It is not really my style.

Q178 Mr Williams: The reality is that when we visited the providers and subcontractors in Pontypridd this is very much an important issue for the clients we met-the people who I think are being served very well by the providers in England.

Mr Hoban: Absolutely. In England, what I would characterise is that the really good performers are very good at levering resources of money from different areas and working with people across local councils and with training providers to maximise resources that can be used to help someone get a job. I would like to see the same approach applied in Wales.

Q179 Mr Williams: The question I was going to ask first is conceivably a bit more negative. There has been an assertion made by some of the people who have given evidence about the appropriateness of some of the employment that people have been given, with the direction of travel in some of that employment. Is that a criticism you are mindful of, and do you accept the argument that some have advanced that the payment-by-results model pushes providers and subcontractors to place people into inappropriate employment? You have rightly said that many doors that have been closed to people over a long period of time have been opened to them. I am also mindful of some people who may find themselves out of work who are perhaps inevitably looking a bit more selectively at what they do.

Mr Hoban: There is a philosophical challenge that we have discussed with Work Programme providers. Some will follow a "work first" approach; the important thing is to get someone into a job, get them into the habit of working, build up their CV and their attractiveness to employers. Others believe that the emphasis should be on getting the right job, and that may take some more time. Our model rewards people for getting somebody into work for six months, so the employment has to be sustainable. That is the challenge that Work Programme providers are facing, and that is what we pay them to do. In some previous schemes people have been paid simply for getting someone into a job. Because we are paying people when they get someone into work for six months, it really does focus their minds on whether this person is in the right job.

We were talking earlier on about temporary employment. The more temporary a job someone has, the harder it is to hit the six-month mark, and the more expensive it is for the Work Programme provider to deliver that service. So they should be looking for employers who can offer that prospect of six months’ continuous employment because it is good for the provider, it is good for the unemployed and ultimately it is good for the taxpayer.

Q180 Nia Griffith: I would like to bring to your attention the case of Ashley Jones in my constituency, who was forced to go on to the Work Programme in November because he had been unemployed a certain length of time. He did as he was told. He learned to write a CV; he looked around for work; he diligently tried to do all the things you are supposed to do to get work. He came up with the opportunity, in February, to go on to a Jobs Growth Wales Programme with someone fitting windows, where there was a good chance of expansion of the company.

As you know, there is an 80% success rate with that programme of people getting a permanent job afterwards. Obviously, his motivation now was that it was near to his home, much nearer than the job centre was to his home, and he would like to get on to this, but he was told he could not leave the Work Programme. He could not leave it until two years were up, so that was going to be another year and three quarters. He was only learning to write a CV there. This was a chance to have a real job at the end of a Jobs Growth Wales Programme. The company is expanding and thought if they took on this youngster in that capacity there would be a job at the end of it.

I would just like to ask you why we can’t release people from the Work Programme so that they can do something, because this is presumably what the Work Programme is about.

Mr Hoban: Yes, but why can’t we allow people on the Work Programme to access Jobs Growth Wales?

Q181 Nia Griffith: But what is the-

Mr Hoban: There is a very easy answer to this. It is a very easy answer for the Welsh Assembly Government, and it goes back to the issue about ESF-funded training that Mr Bebb and Mr Williams mentioned. If Work Programme providers can access those funds and that programme, it would be fantastic. It is a very simple thing for the Welsh Assembly Government to do.

Q182 Nia Griffith: Essentially, we all understand about not wanting to double-fund this person and wanting him to have the chance and the choice to move over to this other programme. Are you saying that there is no reason why he could not leave the Work Programme, because he was being told by the Work Programme providers that he could not leave their programme?

Mr Hoban: We have similar incentive schemes in the UK for young people, which we allow people to access through the Work Programme. All I am saying is that it is a very simple thing for the Welsh Assembly Government to do.

Q183 Nia Griffith: You are saying they could be released.

Mr Hoban: I am saying that what should happen is that somebody on the Work Programme should not be excluded by the Welsh Assembly Government from the Jobs Growth Wales fund.

Q184 Nia Griffith: Then how would you see that working out? Presumably then, instead of being funded twice, the Work Programme provider would cease to receive money for him because he has already now been looked after.

Mr Hoban: It may well be the case that, for that person, the Work Programme has invested time and money, as they have done on CV-writing courses.

Q185 Nia Griffith: Three months out of two years.

Mr Hoban: Yes, but on the courses; on seeing them on a monthly or fortnightly basis; on putting them through other training programmes. So they have invested a lot of money. That may make that person then competitive for a job in the Jobs Growth Wales fund. It is not double funding. There is investment there. The Work Programme provider could pick up their payment for the outcome because they put the money in. All I am saying is that it is a very simple thing for the Welsh Assembly Government to do. They can say that people on the Work Programme could take part in Jobs Growth Wales.

Q186 Nia Griffith: Can we get this absolutely straight then? You are saying that Mr Jones, in this case, would be able to leave the Work Programme. You would see some sort of resolution possible with the Work Programme, provided that you would pay them a certain amount of money for their achievement in the sense that he was prepared to go for this job now and they obviously deserved some reward for that, but presumably without incurring the sorts of costs that you would pay them if you were going to keep him on there for two years, because three months and two years is obviously different. They would have an outcome but they would not be providing the training for-

Mr Hoban: What would happen though, Ms Griffith, is that, if at the end of the period on the Jobs Growth Wales Programme he fell out of work, then the Work Programme would pick him up again and continue to work with him.

Q187 Nia Griffith: Right. You are saying that there is absolutely no barrier on your side, so we should be going to the Welsh Government-

Mr Hoban: Absolutely.

Q188 Nia Griffith: And ensuring that they will allow him on to the programme.

Mr Hoban: I am very happy to work with you on this.

Nia Griffith: Good. Thank you very much.

Q189 Chair: I am probably going to repeat the question here, but it is a really important consideration for us. You would be perfectly happy for somebody on the Work Programme to access training via Jobs Growth Wales, the Welsh scheme-perfectly happy on your part. There is no issue for the British Government in that and there is no European Union issue either.

Martin Brown: It is worth-

Geraint Davies: And to leave the Work Programme, because the issue here is the-

Q190 Chair: No, no. Let me finish my question. You would not need to leave the Work Programme in order to access the other scheme, would you?

Mr Hoban: No.

Q191 Chair: But you would be quite happy for the other scheme to be accessed while somebody was on the Work Programme.

Mr Hoban: I have no problems at all about that. It is an important point that, if someone is on the Work Programme for two years, it means there is a commitment from the Work Programme provider to provide support for that person in that two-year period. It could be support to get someone into work, support while someone is in work, or support when someone drops out of work to get them back in. It is a two-year programme because we want to catch people who fall out. That is why it would be wrong for someone to come off the programme. They would lose the opportunity of that post-employment support. I am very happy to have a discussion with Mr Lewis to find a way that would enable people to access those funds and the ESF-funded training.

Q192 Chair: Why do you think the Assembly are rather negative about this idea? If it is about getting people into work, surely this is something we all agree with? What reason have they given you for their negativity towards this?

Mr Hoban: It goes back to this argument about double funding.

Martin Brown: The genesis of it was around the black box description and a view from the Welsh Government that anything that was required while somebody was on the Work Programme was for the Work Programme providers to fund. It is also worth bearing in mind the criteria for Jobs Growth Wales; their eligibility criteria are people that are job-ready. It is for six months only and it is for 16 to 24-year-olds.

Q193 Chair: Forgive me for asking a probably obvious question, but why does it matter if somebody gets more funding? If we are talking about somebody who has been difficult to place into a job, why are any of us concerned if they are being funded by two groups of people instead of one?

Mr Hoban: Mr Davies, it is a mystery to me, too.

Q194 Nia Griffith: I can understand why people do not want double funding. People can say it is unreasonable, in times of austerity, to fund someone twice, but I am very interested in the Minister’s point here. Jobs Growth Wales is, as Martin Brown says, specialist for a particular group, but it does have an 80% success rate in terms of being kept on by the company. This person qualified absolutely for that. It was an expanding company. This was a super chance for them to have, if you like, a subsidised worker in order to see whether their expansion plans were really going to take off and hopefully then that he would have a job. Really, what we are saying is that there is absolutely no reason at all, from your point of view, why he could not have been allowed to take part and to take up that post, and, hopefully, would have taken it on, in which case he could have left the Work Programme altogether. I presume if you get a permanent job you leave the Work Programme.

Mr Hoban: No. It helps you get into work. It works with employers while you are in employment, and, if you come out of work before the two years is up, it is there to pick you up again and try and get you back into work.

Q195 Nia Griffith: After six months, that would be practically coming up for a year having being on the Work Programme. He would be allowed to stay on that Work Programme for another year, following that, while he was initially in that employment. There is absolutely no reason, from your point of view, why that cannot be the case. From what you are saying, it is a matter that we need to take up with the Welsh Minister in terms of why that person could not be accepted.

Mr Hoban: I get very cross and angry when petty rules stop people like your constituent getting a job. We should all share the desire to get more people into work, and having a rule that seems to be based on some ideology just goes against where I am at in helping people into employment.

Q196 Guto Bebb: Just picking you up on that issue then, would you be able to provide the Committee with evidence of where similar programmes have been utilised by Work Programme clients in other parts of the United Kingdom?

Mr Hoban: Yes, absolutely. I can give you a very easy example now. We mandate people into skills training for English language. In England, those courses are provided by the SFA; in Wales, we have to fund them ourselves.

Chair: Mr Bebb would you like to ask any further questions?

Q197 Guto Bebb: I will carry on then. The question I had for you was to what extent are you frustrated by your discussions with the Welsh Government on the way in which the Work Programme can be utilised by people in Wales? Clearly, we have touched upon this but, in terms of the ability to get the message across to businesses, to what extent are you allowing Work Programme providers the freedom to communicate effectively with the business community, and do you believe that the failure of other Government agencies to support any communication effort is a problem in the Welsh context, in view of the figures that we have from Wales?

Mr Hoban: As far as I am concerned, providers can go out there and talk to any businesses they want. They have to, because they have a pool of people whom they need to place into work. They need to go out and find those jobs, and there are some very successful examples of employer engagement across the Work Programme. I think I am right in saying, Martin, that Jobcentre Plus and the two Work Programmes share out the vacancies. That is a good sign of that collaboration. Work providers-I know that the two in Wales do-need to improve their employer engagement effort. They need to increase the supply of jobs that are available to people who have been out of work for some time.

Q198 Guto Bebb: Now on a specific issue, I am a regular visitor to Work Programme providers in the county of Conwy, who are doing sterling work in my view. One of the things that they have highlighted is the fact that they are having a huge takeup in the selfemployment option. Could you just clarify the extent to which the selfemployed support structure of the Welsh Government is open to Work Programme clients?

Mr Hoban: This is the point I hand across to Martin.

Martin Brown: That is one area where I am pleased to say we have managed to make some progress and to get access for people on the Work Programme, which I was delighted to achieve.

Q199 Guto Bebb: Interestingly, the European funding of that type of support in Wales is very similar to the European funding of the ESF programme. So why do you think you have had success with one part of the Welsh Government and not with another?

Martin Brown: I would not claim to be an expert in the intricate details of European funding, but it is from a different pot from within ESF, which is one of the reasons we have managed to open up that opportunity in Wales.

Q200 Guto Bebb: You are being very generous with the Welsh Government in that respect. In terms of the selfemployed option, are you willing to reconfigure some of the targets for Work Programme providers in rural parts of Wales, where my understanding is that the selfemployed option is proving to be significantly more popular than was originally modelled by the Department?

Mr Hoban: Sorry, significantly more-I did not catch the last part.

Guto Bebb: More popular than what was modelled by the Department originally.

Mr Hoban: They get rewarded for getting somebody into work for six months, and that could include selfemployment. They can change that mix without there being a financial penalty on them. One of the things that has been very successful from Work Programme providers is this emphasis on selfemployment. It has given a lot of people a new lease of life, and I am very keen to support selfemployment through the Work Programme.

Q201 Guto Bebb: I recently was involved in doing a mailshot on behalf of the two Work Programme providers, highlighting the fact that there is a financial incentive to take on people between the ages of 18 and 24. As a result of that, the local branch of the FSB asked me why we limit that incentive to those between 18 and 24. In my parts of Wales, for example, I have the second highest average age of any constituency, and one of the issues that we have is people over the age of 55 who are still looking for employment. Would the Department be willing to look at a similar incentive, which, by the way, has proved a great success? We have had real job outcomes as a result of that mailshot, I am glad to say, but would the Department be willing to look at something similar for other more difficult-to- support clients within the Work Programme?

Mr Hoban: The financial incentive-the £2,275-is part of the youth contract, so it is targeted at 18 to 24-year-olds. Wage incentives have a chequered history in their effectiveness, and we saw with the Future Jobs Fund that it led to public sector jobs being created on a shortterm basis. The work is sustained. We have sought to go down other routes. The wage incentive is enough to encourage people to recruit young people and create a job that only lasts for six months. We need to think quite carefully about what additional support we can give to older workers. Particularly, one of the challenges-we have touched on it earlier on with Ms Jones-is where people’s skills get them back into the labour market and perhaps trying to encourage work experience for older workers, to give them a flavour of what different jobs are out there. That would be good as well.

Q202 Jessica Morden: Two years now into the Work Programme, what are the figures in Wales for the people who are returning to Jobcentre Plus?

Mr Hoban: In June, Rehab JobFit returned 1,327 people and Working Links 1,320.1

Q203 Jessica Morden: After two years, can you explain now what the new regime is?

Mr Hoban: We have something called the Mandatory Intervention Regime. It applies to all those returning from the Work Programme. It is modelled on something called Ongoing Case Management, which was piloted in Leicestershire and Derbyshire last year. It looks at two things. The first is people who still have complex barriers to resolve. We talked earlier on about some people who are very far from the labour market. The Work Programme will move them closer, but there may be still some work to do. There is a dedicated team of advisers at each job centre who work closely with them, identifying alternative provision or support they need to remove those barriers. Some people are seen in the job centre more often, which is also a good thing. Daily signing on has been recommended for a number of participants. Martin, do you want to talk a bit about the experience?

Martin Brown: Yes, sure. It is early days in terms of seeing some of these people come back to job centres, but the Minister is absolutely right. The focus for my teams is very much around carrying on where the Work Programme has left off. We get a detailed action plan straight from the Work Programme providers, explaining what they have done and the distance that person has progressed in the two years, so that we are able to build on that. Rather than starting from scratch, we go back and make sure that the fundamental things have been addressed-that basic skills have been addressed, such as CV skills-so that we are orienting people back into the labour market in the way that we need to and trying some different approaches, as the Minister said, in terms of more regular attendance and group information sessions, so that we can help people move on as quickly as possible.

Q204 Jessica Morden: It sounds like you do not have much confidence in the process so far if you are going back and checking CV training and interview techniques and that kind of thing.

Martin Brown: It is only right that we check that there is nothing fundamental stopping somebody’s progress. The one thing that I noticed from the work I do every day is how quickly the labour market moves and is changing in Wales. Making sure that people have the skills to engage in the labour market today in some cases requires things that are different from when they entered the Work Programme two years ago.

Q205 Jessica Morden: The language that you use for the post-Work Programme programme is addressing people with complex needs and you talk about support, but, in the press releases you have put out about it, it is about a tough approach to get them into a job, an intensive and uncompromising regime, stepping up the pressure on claimants, and rigorous monitoring. It sounds a very harsh regime. Earlier on you admitted that people-ex- incapacity benefit claimants-might have quite complex needs and need a lot of support. Are you not then addressing a really harsh regime for people who, as you have admitted yourself, might just need some more support?

Mr Hoban: There are some people who definitely do need more support, but also there are people who have been out of work for some time who have no barriers to returning to work.

Q206 Jessica Morden: Why is that not in your press release then?

Mr Hoban: Sorry?

Jessica Morden: Why is that not in the press release that you have put out? Why is it all about being harsh and rigorous?

Mr Hoban: Because there is an element that is about being much more intensive. There is something there that people need to do and we do rigorously monitor the programme. It is absolutely right that we do that because we are spending taxpayers’ money. I have talked to Jobcentre Plus advisers who feel that daily signing on has got some people to face up to what is happening in their lives.

Q207 Jessica Morden: But should that not have happened on the Work Programme?

Mr Hoban: You can make the argument it should have happened when they first sign on at Jobcentre Plus. The vast majority of people get back into work very quickly and very easily. The people going on the Work Programme are the 10% of people who have not got back into work a year after signing on. I think for most people you do not need a very intensive or intrusive regime, and what we are demonstrating is that, as we get fewer and fewer numbers, fewer and fewer people looking for work compared with when they first signed on, we need to make sure that the intensity of the regime matches that and we give them support. That is exactly where we will look at what has happened on the pilots. A combination of these measures really was effective, but, as I have said, there are people who will have barriers to work that we need to remove. There are people whose barrier to work is really one of attitude, and sometimes a closer relationship with Jobcentre Plus helps that.

Q208 Geraint Davies: What if the problem is that there simply are not any jobs nearby because of the state of the economy? We are basically saying that, if somebody is on the Work Programme for two years and then they are not in a job, which is presumably quite a lot of them, and they also maybe have complex barriers like disabilities, they do not have any money and you are requiring them to sign on daily and work harder for jobs that do not exist, is that not just harassment and cruelty?

Mr Hoban: Mr Davies, you are unduly pessimistic. If you look at this, the number of private sector jobs in Wales has increased by 46,000 since May 2010. There are 32,000 more people in work in Wales than this time last year. None of us should be complacent about what is happening, but, equally, we need to be very careful that we do not talk down the economy to the people of Wales because the figures do not bear out your analysis.

Q209 Geraint Davies: My understanding, Chair, is that there are 36 people chasing every job in the Rhondda, for instance. I know there is a theoretical "get on your bike" and all this sort of stuff, but, if there are not local jobs and you are basically forcing people to sign on every day and they are doing everything they can but there is nothing more they can do, is that fair?

Mr Hoban: We expect people to be able to apply for vacancies within 90 minutes’ travel journey time from their home. There may not be a job in their nearest town, but we do expect people to travel further to find a job.

Chair: Mr Davies, I am going to have to call Glyn Davies next.

Q210 Glyn Davies: Minister, can I just say at the start how inspirational I find it to have a coalition Minister coming here and standing his ground with real robustness and being incredibly in favour of trying to change the lives of those who have been most difficult of all to reach. I would have thought it is one of the worthiest objectives, and it is absolutely superb that you are willing to stand your ground on what is a hugely important scheme that the Government have given great value to. I certainly give it the value. The two Mr Davies have a very different attitude towards you. [Hon. Members: "Give him a job!"]

Chair: Order, order. To be fair, Mr Hoban has actually given very good evidence. Even if you do not agree with him, he certainly knows his brief. I do not say that lightly.

Glyn Davies: Having suffered the wrath of my opponents opposite, to me, it is an inspirational scheme in its objectives. What we are looking for-and what you are always looking for-is a way in which you might be able to change things so that it delivers more. One of the issues that occur to me is identifying an exact period of time for a programme. It may well be that for some people the right length of programme might be three years or it might be shorter. For the most difficult people to reach, particularly those with complex health problems, have you ever thought that you might even consider lengthening the programme in certain circumstances?

Mr Hoban: Mr Davies, you flag an important issue and it is one that we are thinking about very carefully. It is about increased segmentation and trying to identify more closely people’s needs, and relating that both to the level of payment but also to what other changes one might want to make to the scheme. People do have different barriers to work. They have a different complexity of barriers to work, and they may take different times to eliminate those barriers. That is partly why the Mandatory Intervention Regime is there so that, for those who still have barriers when they have finished the Work Programme, that work does not stop and we just abandon them. There is more we can continue to do. So we are always looking for ways in which to improve it and trying to make sure the support that is given matches the need.

We need to do a bit more work in understanding why it is that people perhaps have not been helped by the Work Programme. Are there particular groups of people who need more support and how do we respond to that? Martin and his team, not just in Wales but across the country, are undertaking exit interviews for people who return from the Work Programme and we are looking at that data quite carefully, to understand who it has worked for and who it has not worked for. That will help inform not just the shape of the Work Programme in the future but also, perhaps, some pre-Work Programme support we can offer as well.

Q211 Glyn Davies: Every one that you get into a job could well be a life saved-certainly a life saved in terms of its value.

Mr Hoban: Absolutely. We underestimate, at our peril, the importance of work to people for their dignity, selfesteem and health.

Q212 Guto Bebb: As you have probably gathered, I am a big fan of the Work Programme, but you did mention that you were frustrated by the petty bureaucracy that occasionally causes a problem. As you probably are aware, the two Work Programme providers in my part of the world in Conwy are both subcontractors, and one of them is A4E. I recently worked extremely hard to manage the transfer of an A4E client from Birkenhead, who wanted to be transferred to the A4E provider in my own constituency, but, because the A4E provider in my constituency was a subcontractor and not a main contractor, it needed the intervention of an MP in order to facilitate that transfer. Can you give us some certainty that that sort of bureaucratic problem can be dealt with in order to allow somebody to carry on accessing the Work Programme even if they have moved?

Mr Hoban: It is interesting you raise that. I had a similar issue raised with me in one of my regional visits by a Work Programme provider. There is no reason why they cannot transfer, as far as I am aware. I am sorry, but I am the wrong person to ask. There is no reason why they cannot transfer and I am rather bemused that this does not happen2.

Q213 Guto Bebb: I have to come back on that issue then because I hosted a breakfast for the Employment Related Services Association and the same complaint was raised at that breakfast as well. If there is no issue, could you provide MPs or the Committee with some guidance on that because it is an issue of concern?

Mr Hoban: It is. I will try and go one better than that; I will make sure that we tell the providers there is no issue, since that is where the blockage is. We will make sure that they have that message very clearly.

Guto Bebb: It is appreciated.

Chair: Thank you very much indeed, Minister. That concludes our session, but I do say this again. It is refreshing to have somebody here who has clearly mastered their brief properly, and it has not always happened with coalition Ministers. I am not going to name and shame or curry favour with anyone, but I do appreciate that you have certainly done so on this occasion. Thank you very much.


[1] Note by witness: the number given by MfE is based on a short term forecast that was issued to individual Work Programme providers for planning purposes. DWP would not regard this as an official statistic. UKSA have released a report endorsing this view.

[2] Note by witness: Once a participant is referred to a Work Programme provider they will remain with the same provider who is contractually obligated to provide continuous support to a participant for the whole of their 104 weeks time on the Work Programme. If a participant (regardless of claimant group) changes address to one outside the contract package area it is for the original provider to arrange adequate support via themselves and their strategic partners to deliver the service requirement until the end of their 104 weeks allotted time.

[2]

[2] The rationale behind remaining with the same provider is that individuals are randomly allocated to Work Programme providers to ensure that each provider has an equal share of participants, and this provides a firm basis for drawing relative performance judgements. For this reason it is not possible for claimants to choose their Work Programme provider or move to another.

Prepared 1st November 2013