Employment (Livingston)

Graeme Morrice Excerpts

Tuesday 28th June 2011 Commons Chamber

[Graeme Morrice (Livingston) (Lab)]

I believe that both you and I have drawn the short straw tonight, Mr Speaker, but I am delighted to be able to initiate the debate, and I am very pleased that it concerns employment in my constituency.

One of the key issues that motivated me—along with many other Labour Members—to become more actively engaged in politics was the corrosive effect of mass unemployment, which reached 22% in my local authority area of West Lothian in the mid-1980s. Action to create job opportunities, especially for young people, in the communities I grew up in and went on to serve as a councillor, a council leader and now an MP, has always been central to my political outlook and activity.

But before I move on to specifics on the future jobs fund and employment in my constituency, it is important to set this debate within the current national context. Youth unemployment in the UK is alarmingly high, with unemployment among 18 to 24-year-olds higher than at any time since 1992. West Lothian also has a higher proportion, at 7.4%, of youth unemployment than the Scottish average of 6.5%.

The House explored the effects of those record levels of youth unemployment in a debate last week, so I will not dwell for long on the details now. However, I was amazed to read in the Library briefing for that debate about the results of a recent poll conducted for The Independent on Sunday. It found that eight out 10 people think it is harder for young people to get a job now than it was 20 years ago under the previous Conservative Government. It also reported that two thirds of the public think that the coalition’s economic policy threatens to

“leave a generation of young people jobless”

and that there is not enough being done to help youngsters into work. That is a damning public verdict on the coalition’s failure to get a grip on this vital issue. It is now clear that jobs are one of the biggest costs of the Government’s cutting too far and too fast.

As we came out of recession, Labour’s No. 1 priority was creating jobs, and by spring 2010 we were turning the corner and unemployment was coming down. Putting young people on the dole is not only a waste of money but a waste of their potential. We believe that getting people back into work is the best way to reduce the deficit. Yet the Government’s poorly targeted spending cuts have led them to axe programmes such as the future jobs fund, resulting in higher unemployment and more people claiming benefits. This, in turn, is making it harder to get the deficit down.

I will now turn to my main points in this evening’s debate—the future jobs fund and employment in Livingston constituency. During my time as the leader of West Lothian council I made economic regeneration and job creation top priorities. As part of that work, I oversaw the establishment of Access2employment, a council service to extend essential employability support to people who need help to get back into work. The Access2employment team delivers employability support to all residents of West Lothian, but with a priority focus on specific groups who have been identified as disadvantaged. They have very strict and challenging targets, which to date have been consistently achieved or exceeded.

On average, the team will work with 1,500 residents of West Lothian each year and will move at least 50% of them into work or training. There are three dedicated locations where the service can be accessed, including two in my constituency at Craigshill and Broxburn. The team also has lead responsibility for PACE—partnership action for continuous employment—in West Lothian, a partnership of key organisations which provide an immediate response for organisations when redundancies occur.

Support is tailored around the individual so that they are equipped with the employability skills that meet the needs of employers, recognising that one size does not fit all. The service has really come into its own during the difficult economic period, experiencing significant increases in the number of clients it works with over the last few years. In October 2009, the Department for Work and Pensions awarded West Lothian council a future jobs fund contract to create more than 200 jobs for young people by March 2011.

Access2employment has led the delivery of that contract and 211 people aged 18 to 24 have now been found employment opportunities, achieving the FJF target. The fund has supported those young people to gain the confidence and skills boost that they needed to find jobs.

One of those who found employment through the future jobs fund in Livingston was Aileen Ross, who was employed by the West Lothian chamber of commerce. She said of her own experience:

“I feel as though the Future Jobs Fund position gave me the chance I needed, to not just get myself back into work but change my career path in a positive direction. On the whole my experience over the last few months with the future jobs fund has been a positive one and I am very grateful for the opportunity I was given.”

Amber Lees was the 211th, and last, employee under the contract. She is now employed by The Pitstop community facility in Addiewell, a former mining community in my constituency, as a community assistant. She said:

“I really enjoy working at The Pitstop and know that I would not have been able to find a job like this without the future jobs fund.”

Margaret Pow, the manager of The Pitstop, which has been highly supportive of the delivery of the FJF contract, commented:

“The Pitstop would not be able to operate in the way it does without the hard work and dedication of the future jobs funded staff we have here.”

There are dozens of similar success stories, with young people in my constituency and across West Lothian who had struggled to find work after leaving school having now, through the FJF and the expert assistance of Access2employment, found work.

Most crucially, the overall success rate in West Lothian has been remarkable, with about 65% of the young people who completed the programme moving into jobs or training—some 15% more than the national average. The added value provided by Access2employment, and its long-established expertise and contacts, has clearly been vital in achieving such significant success. The council’s FJF will end completely in September, but where does the scrapping of the FJF leave Aileen, Amber and thousands more like them?

It is clear that the Government moved to axe the FJF at an indecently hasty pace, before all the evidence on its outcomes was available. The Select Committee on Work and Pensions report on youth unemployment and the FJF, published in December last year, concluded:

“While we accept the Government’s need to make savings to address the public spending deficit, it is our view that insufficient information was available to allow the Department to make a decision to terminate the FJF if this decision was based on its relative cost-effectiveness.”

In fact, there is an increasing amount of evidence to suggest that the FJF has generally been successful and has produced positive results for those who have participated in it. Indeed, a new qualitative study backing the success of the FJF was published last month, albeit with little fanfare, by the Department for Work and Pensions itself.

“Customer Experience of the Future Jobs Fund”, a DWP in-house research report, found that the quality of jobs on the FJF was often high, that Jobcentre Plus generally managed it well, and that the programme had been a huge help in securing jobs for the young people who have been through it. The report states:

“A widespread view amongst respondents who had not found work was that their six month post would help to secure another job in the future. Some of the respondents who had been unemployed for many months plus prior to starting FJF described how their frustration and despair had changed into a real sense of hope for their prospects.”

It goes on to conclude:

“Overall, the evidence from this study suggests that FJF has been successful in up-skilling and preparing customers for work, particularly in terms of increased confidence and belief in capabilities.”

It also states:

“for many participants their reported experiences had been to such a high standard, that they could not think of any improvements to the scheme.”

That hardly sounds like a description of an ineffective scheme, as the Government tried to claim the FJF was a year ago when they announced that they were shutting the programme down.

Support for the FJF has also come from the Scottish Council for Voluntary Organisations, which led the Third Sector Consortium in Scotland, one of the largest third sector providers of the FJF in the UK. Its “Future Jobs: Future Communities” report showed that the FJF helped to support vulnerable people, increase recycling, involve more children in sport and support financial inclusion projects. The report highlighted many specific examples of successful placements in the voluntary sector, including three at Cyrenians Farm, a social enterprise, based in Kirknewton in my constituency.

Martin Sime, chief executive of the SCVO, said the FJF was an example of successful public service delivery. In evidence to the Select Committee inquiry last year, the SCVO also stated:

“We are disappointed that the Coalition Government has chosen to end the FJF early, particularly as this decision was taken so swiftly and without being informed by thorough analysis or evaluation of the outcomes achieved by the programme, which we believe to be favourable when compared to mainstream employment initiatives designed for this client group.”

What of the Government’s alternative, the Work programme? It has been dogged by criticism from all quarters, including from the head of a leading welfare-to-work charity, who also happens to be a Conservative peer. Baroness Stedman-Scott of the Tomorrow’s People charity last week publicly expressed strong concerns about how the Work programme is being implemented, and not least about how voluntary sector providers have been treated. She was voicing the widespread concerns of work charities, many of which have lost out to commercial providers in the bidding process for Work programme contracts.

Earlier this month, Tomorrow’s People and the Centre for Public Service Partnerships published a report that suggested that the Work programme will fail if commercial providers do not help jobless people with the worst social disadvantage. Neil Lee, senior economist at the Work Foundation, has supported this concern. He said:

“As the Work Programme is based on payment-by-results, contractors carry the initial risk. There is therefore the danger that private contractors will focus on investing in places where they are more likely to get people into work to secure a return on investment.”

Perhaps the most disturbing concern has been raised by the Employment Related Services Association, which represents most of the organisations awarded prime contracts to run the Work programme. It has claimed that the welfare-to-work industry could shrink by up to a third in the years ahead, with up to 10,000 jobs at risk. That is because the Government’s own predictions suggest that fewer people will be referred to the Work programme than were referred to similar schemes under the Labour Government.

The ERSA’s chief executive, Kirsty McHugh, said that although she and her members support the Work programme and want it to succeed, there is “huge concern” about its implementation. She said:

“The big unknown is quite how many customers are going to be going through the Work Programme. If, as we think it will, that number turns out to be quite low, our estimate is that the workforce employed to deal with those customers will shrink by 25 to 33%.”

That is breaking new ground even for a Tory Government: a jobs programme that is putting those responsible for running it out of work before it has even begun. On a serious note, that highlights the Government’s lack of ambition in tackling youth unemployment.

Labour believes that a repeat of last year’s bankers’ bonus tax, which brought in £3.5 billion, could, on a cautious estimate, raise £2 billion, which should be used to help create 100,000 jobs, build 25,000 affordable homes, rescue construction apprenticeships and boost investment in businesses. The coalition Government’s decision not to repeat last year’s bonus tax means that even with the increase in the levy announced earlier this year, the banks are still getting a tax cut this year as youth unemployment increases.

In Scotland, Labour adopted an incremental and evidence-based approach to the issue before last month’s Scottish Parliament elections. We consulted with relevant organisations on a £40 million Scottish future jobs fund, which would have built on the strengths of the UK Future Jobs Fund and sought to learn from examples of best practice such as those displayed in my local authority area, West Lothian. That approach, which involves working with experts and local communities, contrasts starkly with that of the coalition Government. At a national level, instead of consulting those who know best how to get young people into work—the people on the ground, such as the dedicated staff at Access2employment—the Government have shut down a programme that is now proving its value and that could easily have been adapted and further improved. Thousands of young people in Livingston, the rest of West Lothian and up and down the country will wonder why the Government have pulled the rug out from under them in this way just when they are in the greatest need of extra support.

In conclusion, I would like the Minister, who I know has drawn the short straw this evening in having to respond to the debate at this late hour, to tell us why the Government acted in such a precipitous way in axing the future jobs fund before all the evidence was available to make an informed decision. Furthermore, what will the Government do now to ensure that the best aspects of the future jobs fund, as so effectively evidenced in my constituency, in the rest of West Lothian and across the length and breadth of the country, are not lost as the Work programme is rolled out, so that young people in Livingston constituency can continue to benefit from expert support in helping them to find work? I thank you, Mr Speaker, and the two Members who have remained in the House.

[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—