Back to Work Agenda

Chris Ruane Excerpts

Wednesday 11th May 2011 Commons Chamber

[Chris Ruane (Vale of Clwyd) (Lab)]

Great changes have been introduced in the back to work agenda over the past year and many more will shortly follow. I believe that many of this Government’s decisions have been taken in haste and without a proper assessment of what does and does not work in the back to work agenda.

I have been involved in the back to work agenda in my constituency for the past nine years. In 2002, I noticed that 50% of the unemployed people in my county, Denbighshire, lived in just two of the 34 wards: the west ward of Rhyl, a traditional seaside ward with many houses in multiple occupation, and Rhyl South West, a ward with a large council estate. Indeed, that is the council estate on which I grew up and spent 26 years of my life.

In 2007, after I had convened a back to work agenda in my constituency, we heard that the Labour Government were introducing a national pilot scheme to get people back to work. It was called the city strategy. Along with Gareth Matthews of Working Links, I lobbied Work and Pensions Ministers to include Rhyl in the pilot. Rhyl was not a city—only 27,000 people lived in it—but it did have city-type unemployment problems on a small scale, as thousands of unemployed people had fled the inner cities of Manchester, Liverpool and Birmingham and come to such seaside towns. We have concentrated areas of deprivation and unemployment. I asked whether Rhyl could be the pilot for the unemployment initiatives in seaside towns, and my wishes were granted, with Rhyl becoming one of just 15 areas accepted into the city strategy.

Since 2009 Rhyl City Strategy has gone from strength to strength. It administered one of the most successful future jobs funds in Wales, putting 450 long-term unemployed people back to work, and it won a bid to become a national pilot for the fit for work scheme.

Rhyl City Strategy is supported by a consortium of more than 180 people from 70 different organisations in the public, private and voluntary sectors, and there is a management board of 25 organisations that deals with the nitty-gritty of putting people back to work. Those two parts of the organisation meet four times a year, and the consortium now meets to deal with different themes relating to the back to work agenda. Best practice is swapped, initiatives are shared and support is given. Co-operation is maximised and duplication and ignorance are minimised. It is one of the most successful organisations that I have been involved with in the past 25 years of my public life.

There are a number of reasons for that success. The board is headed by the private sector: the chair is Barry Mellor, the north Wales manager of Arriva buses. The organisation views the issues from the perspective of the employer as well as the employee. Rhyl City Strategy is a community interest company, which gives it tremendous flexibility, and decisions do not have to be referred back for months of county council committee meetings.

There is a good blend of the public, private and voluntary sectors. As the work has been going on for almost 10 years, there are bonds of trust and co-operation between and within all three sectors, each reinforcing the other and often coming together informally, outside set meetings, to help in developing initiatives. There is good feedback from the overseeing bodies at the Department for Work and Pensions and the Welsh Assembly Government, and from within our own organisation. Success is celebrated and failure is fixed.

The strategy has used a number of novel schemes to connect with the unemployed. It is not simply about sending a man or a woman in a grey suit with a big stick from the Government to tell the unemployed that they have to get back to work. In my constituency, the strategy has dealt with those furthest away from the jobs market—unemployed people who may never have succeeded in school, who have lost confidence in themselves and faith in society, who have many problems with drugs and alcohol, and who lead chaotic lives and change address regularly.

In order truly to connect with people who face such multiple barriers, we have developed a number of novel projects in conjunction and co-operation with many diverse local groups. I wish to mention a few of them. Rhyl football club operates football in the community, using unemployed people’s interest in football to sign them up for skills training and job placements in the local sports sector.

Coastal Hawks is a project to train local young people in the art of falconry. They use those skills to keep seagulls and pigeons, which blight town centres and cause damage, away from Rhyl town centre. They dress up in medieval costume while doing this, engage with the public, and are in effect a tourist attraction. They were the subject of a TV programme—but now, because of cuts, they may be disbanded.

The Hub, a youth project in Rhyl with 1,000 young people on its books, is located in the heart of the poorest community not only in Wales but, probably, in the whole country. It is self-financing, and in the past three years it has had two extensions that have been built by the local unemployed youngsters who use the centre. It has been part-financed by the 10 back to work organisations that want to gain access to those 1,000 young people. They rent office space from the Hub, and the money is then reinvested in the Hub.

A local market has been established in Rhyl town centre, and the organisers are training 10 local unemployed people to take stalls on it. The organisers provide professional training through North Wales Training and give the trainees a stall to turn that theory into practice. Some of the people on the training scheme have multiple problems and are making a valiant attempt to recover from alcoholism. A separate TV programme is being made about that project.

The Government say that they want to encourage enterprise, and I share their goal. We are doing it, and doing it successfully in Rhyl, the home of Albert Gubay’s Kwik Save and also of Iceland—two supermarket chains that changed the face of UK and world trading. We wish to rediscover that spirit of enterprise.

[Jim Shannon (Strangford) (DUP)]

It is important that young people have the opportunity of a job at the end of the day, and the hon. Gentleman says that that is happening. It is also important to instil confidence and to provide opportunities. Is it also important to have a Government who are committed to the public sector, so that the job opportunities in that are there, too, for the young people?

[Chris Ruane]

I entirely agree with the hon. Gentleman, and I shall come to that point shortly.

The Dewi Sant centre in Rhyl works with dozens of people who have massive drug and alcohol problems, some of whom have literally been taken off the streets. Its clients are then given training away from the urban centre on a 7 acre farm donated by a local business man. They are being trained in the art of bee-keeping and other rural skills. They are organising a community harvest collecting unwanted apples, pears and berries from local people and turning the fruit into preserves.

A week on Monday, I will be the master of ceremonies at the opening of a Jamie Oliver-type training restaurant called Taste. The building was empty for five years and has now been refitted to the highest standards by a top-class designer called Jamie Alcock. It will train young people how to cook, wait on tables, and generally run a restaurant. Those young people will then gain work in our local hospitality sector.

Three weeks ago I was at the first presentation night for a back to work scheme aimed at 70 unemployed young men and women to improve their child care skills. This has a double benefit in that those skills will be used by them in bringing up their own children, but will also help to increase the quality and quantity of the child care work force. The presentation evening was highly emotional, as each young person got up to give a brief personal history and then went on to say how the scheme had rebuilt their confidence, returned their pride and helped them to gain employment. Of the first 10 who had been through the scheme, eight had gained employment and two had gone back to college.

The training for many of the initiatives is supplied by a range of private sector trainers and also by Rhyl college, which was established by Labour 10 years ago. This £10 million college has had two extensions in four years—a further £7 million investment—and has won a UK beacon award for widening participation. It is located in the heart of the fifth poorest ward in Wales, and its outreach work, through many of the organisations I have mentioned, has helped virtually to eliminate the category of NEETS—those not in education, employment or training.

Our local schools have also turned themselves round under the political leadership of an independent, Councillor Hugh Evans—I give credit to him—and a new chief executive, Mohammed Mehmet. The private sector, too, has played its full part. Tesco has said that it will take 50% of its new employees from the dole register. Serco, whose Welsh chief executive, Gareth Matthews, has driven our local back to work agenda for nearly 10 years, has located a regional office not in a leafy business park, but in the middle of the street with the greatest social need in the whole of Wales, creating 35 jobs. I am proud of our local back to work agenda.

I now turn to my concerns about the Government’s back to work agenda. I am concerned that their new proposals will not recognise the good practice and progress that has gone before. They want to start from year zero and do away with all that Labour implemented—as much out of political spite as any desire to help the unemployed—and believe that any “lefty-sounding” package, such as the new deal, must be disparaged. The future jobs fund was viewed by seasoned practitioners as the best back to work scheme that has been created, because it recognised the dignity of the individual and dealt with people as individuals. It raised their confidence, gave them meaningful employment and, most of all, gave them a wage at the end of the week. The FJF was not like the skivvy schemes introduced by the Tories in their 18-year reign—but it was ended within weeks of the Government gaining power, without any independent assessment of its contribution to the back to work agenda.

I am worried by the language, tone and philosophy of the Government. They look on unemployed people as feckless scroungers who should be chased back to work with a big stick even when no work is available—even when it is the Government themselves who are laying off those people. They are putting 500,000 workers on the dole and then stigmatising them. The voluntary sector and the public sector will walk away from Government initiatives that stigmatise people. The voluntary sector has no interest in that approach.

I am worried about the directives coming from the DWP instructing local benefit advisers to trick people out of their benefits. They give advisers targets of two to three clients a week to punish by taking away their benefits. The Minister described those allegations made in The Guardian as claptrap—until he was shown the e-mail evidence that it was happening.

I am worried that the Government have no policy for dealing with areas such as mine, with nearly 50% of its workers—13,000—in the public sector. The Government want to sack between 10% and 27% of these workers, pushing them on to the dole queue. Seaside towns such as mine, with many public sector workers, could end up like the coal and steel towns of the 1980s—the towns the Tories decimated. The Government say they want private enterprise to take on those workers. But when I tabled a parliamentary question on the budgets that the Government have allocated for enterprise clubs, the answer came back that £3 million had been allocated—£3 million for 3 million workers, or £1 each.

My biggest worry is that nationally there is no growth strategy and no jobs strategy. Recent emergency meetings have been held in government to try, belatedly, to correct that, but the comprehensive spending review and the Budget did nothing to help create jobs and growth. As a result the economy, which was recovering under Labour, has flatlined for the past six months.

It is not just me, a Labour Back Bencher, who is making these points; this is also what the experts are saying. The director of the National Institute of Economic and Social Research said that we should be seeing quite a sharp recovery, but that looking back over the past six months we have had no growth in output at all, and it is very disappointing. The chief economist at the Office for National Statistics said:

“we have an economy on a plateau”.

The Office for Budget Responsibility has revised down its growth forecast for 2011 from 2.6% to just 1.7%. That will have a devastating impact on jobs and growth.

The gains in the private sector proclaimed by the Government were achieved largely as a result of what was done in the dying days of the Labour Government. The Government boast of an extra 350,000 jobs in the private sector, but most of those were created in the first quarter of their Administration.

Unemployment in my constituency was 4.7% in December 2009. It fell dramatically, to 3.9%, in the six months to June 2010 under Labour. Under the Tories it has gone back up to 4.4%—and that is before the Government sack thousands of public sector workers in my constituency. I fear particularly for the unemployed young people in my constituency. There were 735 in December 2009, and that went down by nearly 30% in the six months to June 2010, to just 530, under Labour. Under the Tories, youth unemployment in my constituency has shot back up to 730. That happened as my local FJF took 450 young people off the dole. If those people were added on, the figure would be nearly 1,200 young people on the dole. Political spite has its price.

“Panorama” is making a programme on the back to work agenda in seaside towns. It came to my town and presented me with a stick of rock, through which is written, “A JOB TO GET WORK”. It is a job to get work, because of many of the policies that the Government have introduced. The intricate web of employment opportunities that we have created in Rhyl over the past 10 years is in danger of being swamped if the Government’s plans are not properly introduced.

The Government need to end their targets to force and trick people off benefits. They need to work co-operatively with the public and voluntary sector, especially where there is a proven track record. They need to change the language through which the back to work debate is being conducted. They need to ensure that those who are furthest from the jobs market are not left behind while the more able are cherry-picked by private sector companies. They need to put aside party politics, accept what was good practice under the previous Government and carry it on. They need to develop a strategy to deal with areas with huge numbers of public sector workers, so that we do not have coal and steel town-type unemployment in the next decade. If they are serious about the private sector providing jobs for sacked public sector workers, they need to give specific help to promote enterprise among the unemployed; £3 million is not enough. Most of all, the Government need to develop a coherent strategy to promote growth and jobs across the board, not as an afterthought but as a key component of getting the country back to full employment.

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

For at least the last five minutes of the hon. Gentleman’s contribution, that was a really disappointing speech. He spent 10 minutes setting out very eloquently the benefits of localism in Rhyl and the work that has been done by the local community to help young people and people of all ages into work. I listened with care, and he was actually making a good argument for the approach that we are taking in the Work programme. In a moment, I will set out how we hope that the Work programme will address some of the challenges faced by towns such as his.

I am well aware of the excellent work that has been done on the ground in Rhyl. It is a good example of how a partnership between providers, local authorities, local business and other organisations to help people into employment can be fruitful. He referred to Working Links, and he will be aware that it is one of the preferred bidders for the Work programme across Wales. It has certainly built experience in Rhyl that can be used in the rest of Wales. However, that was where it stopped, and for the last five minutes of the hon. Gentleman’s speech, one would have believed that we were back to the rhetoric of the 1980s and the Morning Star. We heard a rather outdated view of class war and an apparent belief that Conservative Members and the Government have no interest in helping employment. He could not be more wrong. He needs to understand, first and foremost, the legacy that we inherited.

One would have believed from listening to the hon. Gentleman that the past 15 years were a period of great employment success, but nothing could be further from the truth. We have gone through a long period in which we have consistently had almost 5 million people on out-of-work benefits. Although there have been increases in employment, such as the growth by almost 4 million in the past few years, we know thanks to the assiduous work of the right hon. Member for Birkenhead (Mr Field), who spent a lot of time in the previous Parliament teasing out of the previous Government the reality of the labour market, that far too many of those jobs—indeed, the majority—went not to unemployed people in this country but to people coming to the UK from overseas. That was a great tragedy and a great failure. Billions of pounds were spent on nationally organised back to work schemes that did not deliver the change that we needed.

The hon. Gentleman made a good point when he said that he did not want to see the man or woman coming from Whitehall with a big stick to try to get people into work. I agree with him, but that was the failing of the previous Government’s policy. Programmes were designed in Whitehall, to a template designed in Whitehall and on a contractual basis designed in Whitehall, and they did not deliver the improvement that we needed. That is why we are determined to change things and have brought an entirely fresh approach to back to work programmes. I believe that that approach will help and harness the expertise that has been built up in his town of Rhyl over the months and years.

Let me explain to the hon. Gentleman how the Work programme is designed to work. He will be aware that the contracting of the programme has involved not only individual prime contractors such as Working Links but a network of private small businesses, voluntary organisations, local charities, local groups with expertise on the ground in dealing with unemployment challenges and local public sector bodies. A number of local colleges are also involved in delivering the Work programme. We have decided to say to those providers that it is not the Government who know best how to get people into work, and who are best placed to design the programmes that will work in various parts of the country, it is the professionals on the ground.

We have said that we will leave it to the providers to design what works. We want to encourage them to form excellent local partnerships such as the hon. Gentleman describes as having worked well in Rhyl. The only thing that we ask of them is that they succeed. We have put in place a payment-by-results regime, in which the prime contractors are investing £580 million over the next 12 months. We have confidence in their ability to build consortia of organisations and local partnerships, and in their capability to transform the lives of unemployed individuals around the country. We will reward them when they succeed in getting the unemployed into work. The scheme is designed to deliver the type of localism that he described in Rhyl. We believe that localism can work well around the country, and it is the essence of the Work programme and the black box approach.

[Chris Ruane]

We’ve been doing it for 10 years.

[Chris Grayling]

No, the tragedy is that the Labour Government did not do that for 10 years. There were one or two isolated pockets where there were very good local partnerships, and the hon. Gentleman has described one in Rhyl which was clearly very good, but in too many places that did not happen. Individual communities did not have the type of support that he described. They had top-down programmes designed in Whitehall. The man or woman from Whitehall with the big stick did indeed go down and tell people how things should be done.

I remember that when I held the work and pensions brief in opposition, I used to receive regular e-mails and letters from people who had been referred to the employment programmes that the previous Government had put in place and were hugely frustrated. They were being referred for a 13-week period, more often than not to sit in a classroom for the entire time, with a few lessons on how to fill in a CV and do interviews and the occasional work placement. However, they absolutely did not get the type of diverse programme that the hon. Gentleman described.

I am all in favour of some of the initiatives that the hon. Gentleman mentioned, although I do not know the details of every one. He described young people setting up their own market stalls and unemployed young people rebuilding community centres to gain the skills that they need. I applaud such valuable initiatives.

One thing that excites me when I look at the ideas of Work programme bidders is that we have challenged them to move beyond where they were before. We set a minimum performance standard in excess of what previous national programmes had achieved, precisely because we wanted to drive innovation, new ideas and much more tailored provision. I do not want one-size-fits-all provisions, because, as the hon. Gentleman knows, they do not work. A wide variety of individuals have been on benefits for the long term. He referred to young people who grew up in households in which their parents and grandparents did not work, and who had no experience of a working environment as they grew up. We must help those people back into an understanding of what they can achieve in the workplace. Some older people find that the profession that they spent 20 or 30 years in is no longer available to them. We need to help them to find something different to do with the remainder of their working years.

The Government have actively sought new ideas and a new approach. The exciting thing about the Work programme bids is that there have been real signs of innovation that move beyond that 13 weeks in the classroom and the structure of past programmes.