Employment (Livingston)

Lord Grayling Excerpts

Tuesday 28th June 2011 Commons Chamber

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

The hon. Member for Livingston (Graeme Morrice) has, as he rightly said, drawn the short straw this evening, and I am sure that he would have chosen a slightly earlier hour to debate what are certainly important issues. However, I think that, quite appositely, we have finished this evening with a bit of a fairy story, because much of what the hon. Gentleman said was, although well-meaning I am sure, complete nonsense. Let me explain why. Having listened to his remarks for the past few minutes, one would not believe that youth unemployment today is actually 25,000 lower than it was at the general election, that the number of young people on jobseeker’s allowance in his constituency has fallen since the general election or that the trends in the labour market have seen an increase in employment in Scotland. One would not believe that across the country as a whole there are 500,000 more people in employment than there were a year ago and that, very gratifyingly at what are difficult times for the public sector, the private sector is creating jobs at a rate that is significantly faster than the loss of jobs in the public sector. I simply do not recognise the bleak picture that he portrays.

I fully accept that with the challenging youth unemployment in the hon. Gentleman’s constituency and across the country we still have a lot of work to do. That remains a big problem and a big challenge for us. Of course, the figures are somewhat distorted by the bizarre situation that the overall headline youth unemployment figure includes almost 300,000 young people who are in full-time education and who happen to be looking for a part-time job alongside their studies. I do not classify those people as unemployed and I do not think that most reasonable people would. However, the reality is that we still have more than 600,000 young people across the country—many in his constituency, some in mine and some in the constituencies of all hon. Members—who are struggling to get into work in what remains a challenging labour market. I accept that there is a job to be done. The progress that has been made is a welcome step in the right direction, but it is only a small step on a long journey to tackling a real problem.

I disagree with the hon. Gentleman’s comments about the future jobs fund. I know that Labour Members believe strongly that that policy was a significant strategy for dealing with youth unemployment, but I disagree. I do not deny that a number of young people benefited from what were six-month placements—it is important to get the jargon right. “Future jobs fund” was not an honest and accurate title for the programme. They are not jobs, but six-month placements almost entirely in the public, voluntary and community sectors. Because of rules relating to European state aid, it was not possible in almost all cases to provide jobs in the private sector. At a time when it is the private sector that is creating job opportunities, that was a big flaw in the future jobs fund.

The other big flaw was cost: it was massively expensive. It cost four times as much to achieve a job outcome as did the Labour party’s own new deal for young people. It was a hugely expensive programme that did not deliver results significantly out of line with previous programmes at a cost that was comparable to previous programmes. At a time when the Government were dealing with a massive deficit—a huge challenge—we had to take some hard decisions, and those hard decisions were about value for money. Early on, we took a straightforward decision that I stand by to this day and which I believe was absolutely the right one: to focus our attention on apprenticeships. I accept that in Scotland, in the hon. Gentleman’s constituency, responsibility for apprenticeships has been devolved to the Scottish Administration. I admired his bravery in referring to the Labour party’s plans prior to the Scottish parliamentary elections, because I am not sure that they were entirely welcomed by the electorate north of the border.

[Graeme Morrice]

It is probably true to say that the Scottish Labour party was not quite successful in last month’s Scottish parliamentary elections, but that was not because of our policies on jobs, employment, or apprenticeships; most people recognised that those were our top priority. There were other reasons why we did not quite win. I do not think that it was because of our position on getting young people back into employment.

[Chris Grayling]

Of course the hon. Gentleman knows more about Scottish political affairs than I do. Looking at the issues from south of the border, I simply observe that it is quite clear that the Labour manifesto for those elections did not capture the attention of those north of the border in the way that he and his colleagues might have wished it to. However, it is certainly the policy of the Administration in Edinburgh to pursue an apprenticeship route. It is very much the view of the Government that apprenticeships offer a much better option for young people. They offer a pathway to much longer-term skill building, and to a real job that can last a number of years. We all hope that in most cases it will carry on beyond the apprenticeship period and become long-term employment—in an organisation in the private sector, in most cases, where there is a real chance of growth and opportunity. Sadly, right now, for reasons that we all know and understand, the same growth and opportunity is not shared in the public sector.

That was a very conscious decision, and I was pleased when, earlier this week, my colleague the Minister for Further Education, Skills and Lifelong Learning, in the Department for Business, Innovation and Skills, published figures on the Government’s progress on apprenticeships and set out a quite remarkable increase in the take-up of apprenticeships over the past 12 months. When we add to that the additional apprenticeship places that were announced by the Chancellor of the Exchequer in the Budget, we find that the package of apprenticeships that we are offering, together with the package of apprenticeships that will be set up in Scotland and Wales, will offer young people across the United Kingdom a better option than the future jobs fund.

[Graeme Morrice]

I am grateful to the Minister for allowing me to intervene a second time. Certainly, I would welcome any increase in the number of apprenticeships for young people. Of course, the Government are building on the strengths of the modern apprenticeship scheme introduced by the Labour Government in this place and the Labour Administration in the Scottish Parliament. What does the Minister say in response to my comments about the criticisms made of the Government’s Work programme by a series of people, including Baroness Stedman-Scott, who was particularly critical of the scheme?

[Chris Grayling]

I shall go on to talk about the Work programme in a moment, but first let me touch briefly on one other important part of our strategy: the work experience scheme that is being organised through Jobcentre Plus. We believe that one of the key barriers to employment for young people is that age-old problem—they cannot get a job unless they have experience, but they cannot get the experience unless they have a job. We discovered very soon after taking office that under the previous Government, any young person who did a period of work experience would lose their benefits. We have changed that; young people can now do up to eight weeks’ work experience while continuing to claim jobseeker’s allowance. That allows them to get into a company, demonstrate their potential, and get to know the employer and vice versa. We believe that in many cases that will be a bridge into an apprenticeship or full-time employment.

There are already many thousands of young people going into work experience placements under a scheme that we launched about three months ago. We have commitments from employers to tens of thousands of placements over the next 12 months. We believe that that scheme can be a simple, quick vehicle that opens up opportunities for apprenticeships and other employment for young people, and allows them effectively to demonstrate to an employer what they can do, and break down that initial barrier. An employer may say, “Actually, I like this young person; they are doing something for my organisation, and they can make a difference.” That is the second part of our strategy.

As the hon. Member for Livingston rightly said, for those who have been unemployed for a longer period, or who come from a more challenged background, we have the Work programme. I am afraid that I simply do not recognise the pessimistic view that he portrays of the programme.

It is undoubtedly the case that there are some issues for voluntary sector organisations in the negotiations with prime contractors, sorting out the best possible deals for themselves. I have been very clear, and I am very clear again tonight on the record, that as far as I am concerned we have recruited a good team led by prime contractors and backed up by teams of organisations—specialist, community, voluntary sector, smaller private sector and public sector, such as local colleges—to deliver the Work programme across the country. We expect those teams to remain intact.

I have no doubt that there will be some to-ings and fro-ings in the negotiations between prime contractors and subcontractors over the next few weeks, but it will not be acceptable for prime contractors to treat their subcontractors as what has been called “bid candy” and to drop them. Any prime contractor that does that can expect to lose its contract. So I do not recognise that there is a deep-rooted problem. Yes, of course there are some to-ings and fro-ings in negotiations; that always happens in a big contractual changeover.

The hon. Gentleman talked about a lack of referrals to the Work programme. I can tell him that already many tens of thousands of people are on the Work programme and are starting to receive support from the providers. One of the bits of feedback that we are getting from providers is how pleased they are that we have delivered the volumes that we promised at the time we promised, in stark contrast to the flexible new deal programme under the previous Government, which was a disaster when it started. The people who were promised to providers did not materialise. Providers found that they did not have the people they had expected. That is not happening under the Work programme. The feedback that we are getting is that providers are pleased with the volumes of people who are waiting for support.

This is the most ambitious back-to-work support programme that this country has ever seen. In terms of numbers, it is bigger than any previous programme. I do not accept any figures that say otherwise. It is available to every single person who is claiming employment and support allowance, and it is available to every single person on jobseeker’s allowance who crosses the threshold of 12 months for an adult jobseeker, nine months for a young person, and three months for somebody who comes from a challenged background. Every single one of the people in those categories has access to the Work programme on a scale that has not been seen before in a previous programme.

This radical new approach—payment by results—says to provider organisations large and small, from big multinational companies down to small community projects, all working as a team, “You deliver the support that will work best for the people you are helping, get them back into the workplace, help them stay in work for a period of time that can be as long as two years and three months, and we will pay you on the basis of your success.” I am confident that that will unleash best practice around the industry. These organisations can succeed only if they are excellent at what they do.

The voluntary sector organisations that have real skills have a first-rate opportunity because if they are the best at helping these people into work, they will succeed in the Work programme because their skills will be very much in demand. We have in total 500 voluntary sector organisations across the country which have all signed up to the Work programme. As part of the tendering process, they have signed pieces of paper to say that they are happy with what is on the table. They will now deliver support and expertise to the prime contractors to help the long-term unemployed get back into the workplace in the hon. Gentleman’s constituency, in my constituency and in the constituency of every hon. Member throughout the country.

As of this Thursday, every single part of the country will have been covered by the Work programme on time, as planned. The contracting process has taken place in a very short time by public standards and in many parts of the country is already starting to help people into work. The package of support includes the work experience scheme, our real focus on expanding the number of apprenticeships, the intensive personalised support through the Work programme, and a greater devolution of flexibility and responsibility to the front line in Jobcentre Plus to tailor support in areas where those individual staff are working to the realities of those areas. To be able to look at a constituency like the hon. Gentleman’s and say, “For the shorter-term jobseekers who have not yet accessed the Work programme, what are the extra things we need to do in our area to help our own client base—