Making it work: the European Social Fund - European Union Committee Contents

Examination of Witnesses (Question Numbers 150-159)

Mr Mark Yeoman, Ms Carolyn Webster, Mr Steve Arnott, Mr Greg Burke and Mr Shay O'Rourke

7 JANUARY 2010

  Q150  Chairman: Could I formally welcome you to the meeting. There are a number of you and we only have, as you know, a little over an hour, so when you do come to give your evidence I would be grateful if evidence is not repeated but you may wish to add to it if you have a different view or a different perspective. You have before you a list of interests so that you know the interests of the members. This session is on the record and I think you have to recognise that although there are not a lot of people here it is webcast and people do tune in to webcasts and, therefore, will be interested from another perspective. There will be a transcript at the end of the session which will come to you. We need you to turn that round pretty rapidly in terms of whether or not you have things that you believe are not quite accurate. We move at speed here and would be grateful for that. I need to apologise that we have not got the full number of members here this morning. This is not because, unlike you, they have not all been able to get here but we have got some sickness amongst members, so I just give the information because I cannot really apologise for that; it is not something we can do anything about, and other people are stuck in different places. I feel rotten saying that because I know where you have all come from and, therefore, what a journey you must have had. When you begin you need to state your name for the record. That is so that you are stating that you are who we believe you are, and if you want to make a brief opening statement that will be received but it needs to be brief and not repeating what you are going to be saying in answer to the questions. Could we begin, therefore, by asking you to state your names for the record and where you come from.

  Mr O'Rourke: I am Shay O'Rourke from Government Office North West.

  Mr Burke: Greg Burke, Government Office North West.

  Mr Arnott: Steve Arnott from the Government Office for Yorkshire and the Humber.

  Mr Yeoman: Mark Yeoman from the Convergence Partnership Office for Cornwall and the Isles of Scilly.

  Ms Webster: Carolyn Webster, Convergence Partnership Office for Cornwall and the Isles of Scilly.

  Q151  Chairman: Thank you very much indeed. Can we begin by looking at this issue of the ESF priorities and asking how has your ability to respond to the local needs through ESF changed since the last programming period? We are quite interested in these changes between the programme periods. Do you believe there are or have been elements present in your programmes which offer advantages over the mainstream areas?

  Mr Arnott: From my perspective in Yorkshire and the Humber I think the programme in South Yorkshire has been able to respond quite positively, particularly to the changing economic circumstances that we face and certainly different circumstances from the ones that were pertaining when the programme and the regional priorities were being planned. We have been able to respond, I think, positively to that. You are probably aware that in the previous programme South Yorkshire had Objective 1 status, so it received the very highest level of EU support that a region can get. For this programme it became a phasing-in region, which was good news in the sense that it was no longer one of the least developed regions in the EU. However, one of the consequences for South Yorkshire is that the level of resourcing has been reduced, although there has been transitional funding to, if you like, help cushion that reduction in funding, which has helped. If I could perhaps give you a couple of examples of things that we have been able to do in the programme through phasing-in status. The two phasing-in regions in the English programme did have more flexibility in terms of programming and planning than the remaining regions and that was to take account of the fact that they were moving away from Objective 1. For example, in South Yorkshire the previous Objective 1 programme had invested quite heavily in schools in supporting children from 14 onwards, which is unusual for ESF, and we were able with the phasing-in funding to continue supporting that work in schools. It is primarily encouraging the links between schools and businesses and helping children cope with and prepare for the world of work. We have been able to continue to do that through phasing-in funding at least until 2010-11. The second thing I would mention is that the partners in South Yorkshire were very keen to provide more intensive support to people who were most disadvantaged and perhaps furthest away from the labour market. One of the things that had happened during the previous programme was that although unemployment was falling we did not seem to be making the same sorts of reductions among the long-term unemployed and the economically inactive who were not engaged in the labour market, so one of the things we are doing in the first half of the programme is funding what we call the Progress Together model, which is a much more holistic approach to supporting the most disadvantaged through a series of measures beginning with outreach work, actually getting out to people and trying to encourage them back into the labour market by providing mentoring and key worker support, both during periods of training before employment and when they are in employment afterwards, and providing a range of other training, advice, guidance and support. The additional money that has been available in South Yorkshire through phasing-in has helped us to do that.

  Q152  Chairman: Could I just ask you a supplementary to that, and that is that you may not have seen this but we have had a submission from the Yorkshire and Humber Regional Forum which suggests that they feel they have lost out in terms of being able to take more active roles, and particularly with the NGOs feeling that they are, if you like, being marginalised. What would your response to that be? We are quite prepared to give you a copy of this and ask for your written submission but you may want to comment on it.

  Mr Arnott: I saw the submission on the web page and I was surprised about some of it because it seemed to suggest almost that we were ignoring social inclusion as an issue whereas my view is that things like the Progress Together model that I have just described were an attempt to deal with inclusion in a much more holistic and positive way. I think there may be a feeling that because of the way the programme is managed now perhaps some of their constituent members may not be able to access ESF funding in the same way as they may have done in previous years. I would not be able to comment fully on that but I can assure you that the Third Sector is quite engaged in the ESF programme in South Yorkshire, primarily as a sub-contractor to the main providers who are contracted with DWP, Jobcentre Plus and the Learning and Skills Council.

  Q153  Chairman: I should say that this is not the only area where we have had this, if you like, complaint that they are finding it more difficult to become part of the mainstream activity, so we were very interested to hear what your response was.

  Mr Arnott: Could I just say one other thing? Not just in South Yorkshire but also across the country we do provide small grants, mainly to small Third Sector organisations which would find it difficult to access ESF because of the size of the organisation. We have got something like £1.6 million in South Yorkshire available in the first four years of the programme, and I think that is likely to support several thousand individuals through very small, Third Sector organisations in South Yorkshire doing probably pre-mainstream activity, helping and encouraging people who may be disadvantaged in the labour market to make the first steps towards it.

  Q154  Chairman: If you had statistics we would find it quite useful to know how many of the NGOs have been able to access money and whether or not there is a change over time. Thank you very much indeed. It is just that it is something that has come up, not just here but in a number of areas.

  Mr Arnott: I am not sure I have actual figures. I am not sure I could provide you with information that said how much money the Third Sector got in the old programme because we did not collect that information in the old programme and we do not collect it at the moment, but I can certainly provide examples—

  Q155  Chairman: Whatever you have we would be pleased to have it. Can I move on to the second part of this question, which is, in the light of your respective experiences (and other people may want to comment on this), where do you think the focus of ESF spending should be and where do you think the balance should lie between the provision of higher level skills and lower level skills, again, if you like, reaching the hard-to-reach?

  Mr Burke: I think it is absolutely essential that ESF has room for both, that it does need to address both the lower level skills and the higher level skills, but, picking up very much on the Leitch recommendations, it does need to have an emphasis on the lower level skills because this is where there is very strong evidence that market failure happens, so individuals are much less likely to either choose or be able to invest in the skills they need at basic level and level 2, which are the foundations for employability, whereas once you get more to level 3 and level 4 skills the market tends to work much better—the signals are given, individuals pick up the signals, identify that if they invest in that level of training they are likely to get an economic return from it, so although it is important to balance across the skill provision it is really important that ESF focuses on the lower level skills because these are really the absolute basic employability skills that people need to be able to move from being out of work into a long-term employability agenda.

  Q156  Chairman: Do you think that is happening though, because we are going to come to the economic downturn? One of the suggestions is that because of the economic downturn and more people being unemployed, funding is actually now moving up the scale. Is that anyone's experience?

  Mr Yeoman: From a Cornwall and Isles of Scilly perspective I think we would probably have a slightly different emphasis. We are very happy with the splits that we have at the moment between the Welfare to Work agenda and the Workforce Development agenda, if you like. It is about 40 per cent under Welfare to Work and 60 per cent under Workforce Development, and 25 per cent of that 60 per cent is specifically on the higher skills, and that is probably because we have a slightly different economic geography in Cornwall and the Isles of Scilly. We had a lack of higher education facilities until the Objective 1 programme, so we feel very strongly that the ESF agenda should travel across the entire employment and skills agenda, all the way from those who are hardest to reach in terms of getting into work through to the higher skills, because that is what our economy needs. Going back to your original question, we feel that we have had the flexibility and we have been able to use the European Social Fund across that whole pathway of employment and skills, because at the end of the day people who are economically inactive need skills as well as those people who are already in work, and we need to make sure those people coming out of universities and colleges are fit for work as well, so there is a whole range of skills and we are quite happy with the splits that we have at the moment.

  Ms Webster: Just to add to that, I think the balance of ESF funding needs to be set in the context of the other resources that are available in the region to tackle employment and skills, so we need to take into account the mainstream and other funded delivery and get ESF to add value to that. It is not going to be the same in each area. In Cornwall and the Isles of Scilly we have a very coherent strategy[2] around tackling worklessness and raising employment rates, ESF is one funding stream that helps us to deliver that. That is why we have got slightly less ESF in the project for Priority 4, overcoming barriers to employment—

  Q157  Chairman: Before we move on, do you think it is the localisation, because you have more of that, I think, in Cornwall and the Isles of Scilly because you are a special status, and that has had an advantage there?

  Ms Webster: Absolutely. We have a strong history of partnership working and we have got a number of investment streams that come into Cornwall and the Isles of Scilly. The lesson we have learned from the old programme is that in convergence we needed to join up much more strategically so that we are much more intelligent about all of the resources we have and where ESF fits within those.

  Q158  Lord Inglewood: At the risk of stating the obvious, the economic outlook now is rather different than when the programme was drawn up and if I could have a response in respect of each of the three bits of Britain that you represent it would be helpful. What do you think has changed in terms of the challenges that you face in deploying the ESF in your own areas and how have you responded to that challenge? That is the most concise way I can put the question. I would like to hear what you think.

  Mr Arnott: I think I alluded to this in my first answer, but clearly when the programme started we were in a position of falling unemployment and there was quite a heavy focus on the most disadvantaged in the labour market and the inactive and so on. Obviously, as economic conditions changed the programme needed to respond, particularly to the increase in unemployment and particularly to the increasing number of people who were either being threatened by redundancy or being made redundant. I think the programme has responded quite well to that challenge. I think the programme itself, in the way it was drawn up, was not absolutely prescriptive, and the range of activities that one was allowed to support (and we could only support what was in the programme) have been drawn, I think, sufficiently widely to enable us to do that. We also had the benefit that, as you know, the money that comes from Brussels comes in euros and because of the exchange rate the value of the programme in sterling went up by something like 20 per cent in cash terms in the first half of the programme. That sort of flexibility and that additional money meant that we were able to continue providing a focus on the most disadvantaged but we were also able to put in place special measures to respond very quickly to people who were being made redundant or were under threat of redundancy, and we have certainly had particular initiatives in the region to do that.

  Q159  Lord Inglewood: I am trying to boil it down to essentials. Is then the proposition that you are explaining to us that because of the change in the exchange rate you have had more cash to spend?

  Mr Arnott: Yes.

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