Government Employment Strategy

I am absolutely delighted that the Select Committee has secured this debate. This is one of the many reports we have done to which the whole Committee was very committed. On the one hand, the Government have been most successful in identifying an incredibly ambitious aspiration of 80 per cent. of people in employment. They also identified work as the best route out of poverty—I believe that everyone on the Committee agreed with that—and therefore also as the single best way of ensuring that their other ambitious targets to end child poverty are also met. The Committee applauded what the Government are doing in respect of the 80 per cent. target, and therefore was excited about examining the detail behind the strategy. We focused on the strategy, and that is where we were most critical. I should like to focus on it a little now. The strategy falls into many different parts. Further to the point made by my hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble) about pilots, there have been some immensely successful pilots, and immensely successful examples of getting people back into work. One of the pilot areas for pathways to work in my area of Derbyshire, which we visited quite a while ago, informed much of the Committee’s debate and much of what went into the report. We saw that the more individualised and tailored the support, the more people had success in making the leap from out of work into work. The more tailored the support—and, by the same token, the more expensive the support—the more successful the strategy was, not just in placing people in work but in keeping them in work for any length of time. That goes to the heart of the problem that we as a Committee had with the strategy. It has been mentioned already, but is worth mentioning again, that the system and the Department for Work and Pensions at present look at the whole system—the whole strategy—of getting people back into work in terms of the benefits that they claim. They do not consider the individual or the barriers that they face in going into work. That has a huge implication for anybody who claims anything other than one simple benefit. For anybody who has multiple disadvantages—many different types of disadvantage—there is an issue about which benefit is the basis for getting them into work. We need not only a system change but a culture change, but that will not happen just by tweaking the present system. Other Members have spoken about the changes that they would like, but I go back to the point that the more tailored and individualised the support, the more successful it will be. The report deals with one of the big problems with strategies to get people back into work, which is that at present everything is delivered through Jobcentre Plus. Jobcentre Plus does an excellent job at many things in many parts of the country, but the focus is almost exclusively on job entry. Although there are bits about keeping people in work for a certain time—and we can discuss until the cows come home what that period should be—what Jobcentre Plus really focuses on is job entry. The number of people who come back to claim benefits, and who go back through the doors of Jobcentre Plus, is 70 per cent. That is a staggering figure. It tells us that there is something seriously wrong with the kind of work that Jobcentre Plus is doing. There is a revolving door, a churn—whatever one wants to call it. People go to Jobcentre Plus and are placed in work, but they fall out of the labour market far too quickly and come back through the doors of Jobcentre Plus again. There are plenty of statistics about keeping that 70 per cent. out of Jobcentre Plus, keeping them in the workplace and meeting our 80 per cent. target. All sorts of different statistics are bandied about, but they indicate that the system is not really succeeding at keeping people in work. The report also points to what the Committee identified as a sort of a tick-box mentality in either the DWP or Jobcentre Plus. Once somebody has gone for 13 weeks, or however long it is, the box is ticked and their case notes go into the files. The person does not really matter until they come back through the door, when their case notes become live again. Not only is that enormously inefficient and expensive, but it is not very good for the individual who bobs in and out of the labour market and is just running to keep up. The Committee focused on that. That brings me to the point about work first, work first plus and Lisa Harker’s report. Freud and Leitch were enormously interesting to read and enormously informative, but Lisa Harker’s report on child poverty targets is one of the best reports that I have ever read. She proposes the idea of work first plus. Under the New Zealand model, when somebody comes through the doors of Jobcentre Plus, the focus would be on work—not benefits—but not only on work. The focus would be on good work. Not only are people being churned through the doors of Jobcentre Plus, but we also have many people who are in poverty at work, and that is very alarming. I go back to the points made about lone parents and lone parent benefit, and how we must create a system whereby it is worthwhile for somebody to go back to work. Work is about a lot more than just earning money to survive. It is about creating social networks, and progression and personal development. That brings me to retention and progression. An alarming aspect of Leitch was the description of our economy as having many low-skilled or unskilled jobs and many high-skilled, high-technology jobs but really nothing in the middle. It is difficult, given the state of our economy, to progress from a low-skilled, low-paid, often menial job through the labour market into a higher-skilled, higher-paid job. We must look at that situation in a sophisticated manner and develop policies to deal with it. Much is said about in-work skills and ““Train to Gain””, but we must also consider how our economy is structured. That would go a long way towards ensuring that we keep in touch with people once they are in the labour market, rather than just letting them bob in and out without gaining any skills or any really useful experience other than how to sign on again. The Government’s response to our excellent report on their employment strategy referred frequently to the Freud report. I am aware that the Government have not yet responded to it. I would like to make a bid in respect of the response. The Treasury will produce a response to Leitch, and the DWP will respond to Freud. Would it be possible to produce a hybrid report to both reports that addresses skills and welfare at the same time? That is essential if we are to deal with the skills development agenda but also keep people in work and reach the 80 per cent. employment target. The Freud report talks a lot about the radical proposal of regional prime contractor-led monopolies and consortiums bringing in local private and voluntary sector organisations to deliver welfare in each of the regions. The Committee produced its report when the Freud report was happening in the background. All members of the Committee welcomed some of Freud’s proposals and thought that they were new and interesting. We will certainly look at them in far greater detail, but we had slight concerns about the effect that such a large regional consortium would have on the local provision that is currently good. Some local provision is not good, but some is absolutely excellent. There were also concerns about the ultimate effect that proposals would have on Jobcentre Plus, which has a good district-based network of not just personal advisers but jobcentre managers, who are part of networks and liaise with local authorities and private employers. There is a danger that making consortiums far too big would undermine the good work that is happening and if it is done in the wrong way, the Government’s 80 per cent. employment target could also be undermined. The proposal for city strategies was in the Welfare Reform Act 2007 and was discussed in our report and the Government response. The Committee visited Glasgow and I have recently found out about the Manchester city strategy. City strategies work best where there are close personal working relationships, not just with Jobcentre Plus, but with local authorities and different local providers. The key to the success of city strategies has been the pooling of resources and budgets. It is fundamental to the success of city strategies that those operating them are in control of the resources and budget. City strategies that have not yet been so successful have not been running for long and we should give them more time because it is a no-brainer to say that city strategies must work. Pooling resources and bringing together people with an interest in the strategies has to be a good thing. As my hon. Friend the Member for Blackpool, North and Fleetwood mentioned, Jobcentre Plus and city strategy partners are losing flexibility because the Government have recently centralised the procurement budget. That undermines the help and support that can be brought in at a district and city strategy level in order to better and more easily reflect local labour market needs and the needs of local claimants. Nationally pooled and spent budgets means that the local labour market angle is totally lost, which we warn against in the report. Finally, the Government response states that there will be"““a small number of consultation events in May 2007””" on the Freud report. I am not aware of any consultation events although I have been looking out for them. I would like to know where they will be, when they will be and who can take part in them. The issues raised by Freud are dramatic—such as moving welfare delivery from Jobcentre Plus to the private sector for people who are out of work. That is a dramatic shift and I understand that the DWP will be piloting Freud’s recommendation before it is introduced. As it is such a dramatic shift from the way that welfare is currently delivered, consultations should not take place not just in May, but for a much longer time. We need the opportunity to scrutinise that proposal much more carefully to ensure that the good things are not wiped out. I do not wish to be too negative and will end on a positive note. The whole Committee agrees that the 80 per cent. target is wonderful; it was just the way to reach it that we had slight concerns about.