Jobseeker’s Allowance (Work Experience) (Amendment) Regulations 2011

Lord Freud Excerpts

Wednesday 2nd March 2011 Grand Committee

Moved By

[Lord Freud]

That the Grand Committee do report to the House that is has considered the draft Jobseeker’s Allowance (Work Experience) (Amendment) Regulations 2011.

Relevant document: 15th Report from the Joint Committee on Statutory Instruments.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, in moving the Motion, I am satisfied that the instrument is compatible with convention rights.

I am grateful for the opportunity to debate the amendment before the Committee today. As your Lordships know, young people typically face disproportionate difficulties in finding work both during and after periods of recession. However, youth unemployment was stubbornly high even before the recent recession. The Government inherited a major youth unemployment problem, which has left us with some 600,000 young people who have never worked since leaving school or college and some 250,000 children growing up in homes where no one has ever worked. This is why this Government are determined to overhaul the welfare system and support more young people on to the first steps of the career ladder.

Today’s amendment is an important part of that process. It is just one element in a package of measures that the Government are introducing to help young people to make a smooth transition from education into work. However, it will play a key role in ensuring that we offer young people the opportunity to gain real experience of the world of work and the discipline required to allow them to play a full and responsible part in society.

The rationale underpinning the proposed amendment is really quite straightforward. We wish to reframe the rules around work experience programmes to make them more effective and more valuable for those who need most support. That is why we have built a number of defining characteristics into the new programme, which I will run through briefly.

For example, we aim to target the programme primarily at 18 to 21 year-olds who find it hardest to make the transition into employment. This is important, because the evidence suggests that, even though the headline figures for youth unemployment move up or down in a relatively smooth manner, there is a great deal of volatility underlying the figures. Indeed, some 80 per cent of young people move off jobseeker’s allowance after six months. Rather than paying for people who would move off JSA without the need for a great deal of support, we want to make sure that we target our resources at those who need it most—the 5 per cent or so who are at most risk of becoming long-term unemployed or withdrawing from the labour market altogether.

Another feature of the work experience programme is that we are keen to ensure that those taking part get a real sense of what it is to make the commitment to work. This is why we have made a conscious choice to extend the work experience placements from two weeks all the way up to eight weeks. Just as important, this approach also explains why we have introduced an element of mandation into the scheme. What this means in practice is that a Jobcentre Plus adviser will offer advice to those who are most likely to benefit from a spell of work experience. After that, the jobseeker will have a choice about whether they commit, so that funds are focused on those willing and motivated to attend. Each participant will then have a week-long probation period to find out whether the work is suitable for them. From this point, however, there will be a benefit sanction for those who do not complete their placement. This will give each young person a real sense of what the world of work is about—discipline, professionalism and commitment. Not only that, it also signals to the host business that we value the time and effort that it is putting in, as we will not accept time-wasters getting away scot free.

The last point that I wish to raise in relation to the work experience scheme is that we will still ask those taking part to show that they have made an effort to find work. This is a particularly important point because we know from previous experience that, even when people are doing programmes such as this, they have a better chance of moving off JSA if they stay with their job searches. However, we will also make sure that advisers have the flexibility to adjust the job-search reviews to make sure that they do not disrupt the work experience placements.

We are taking a whole new approach to work experience to make it more relevant and more cost-effective. We have created the framework for giving young people the opportunity to boost their confidence, their employability and their prospects. We have already secured support for the programme from a number of major companies, such as Skanska, Homebase, Hilton Hotels, McDonald’s, ISS facilities management, Chums, De Vere hotels, Carillion, Coyle Personnel and Punch Taverns.

This is a great start in giving young people access to quality work experience and introducing them to the world of work. However, given the sheer scale of the challenge that we have inherited, we know that we have far more to do to effectively tackle youth unemployment. The Government are willing to take on the challenge. That is why we are helping more young people with personalised support at jobcentres to help their transition to work, making access to skills provision a priority across the country and vastly increasing our investment in apprenticeships, where the Government have already committed to increase the budget for 2011-12 to more than £1.4 billion.

We will also help to get Britain working by rolling out work and enterprise clubs across the country, introducing the new enterprise allowance to support the start-up of up to 40,000 new businesses over the next two years and introducing the new work programme this summer to provide tailored solutions on a payment-by-results basis to help those trapped on benefits to start making the journey back to work.

All these measures are part of a wider commitment across government to make sure that we are giving everyone, especially young people, the right support to make the transition into the workplace, no matter which path they choose to get there. This is the only way to help people to work their way out of poverty and to spur the private sector growth that this country needs to drive the recovery and generate the long-term jobs that we need to build a sustainable economy for the future. I beg to move.

[Lord Knight of Weymouth]

My Lords, I am grateful to the Minister for putting flesh on the bones of this statutory instrument. Inevitably, what can be put across is limited by the regulations’ dry form. My reading of them is that they change the jobseeker’s legislation so that you can volunteer to take up a work experience opportunity and then, once you are in, it becomes mandatory with the threat of sanctions. If I was mischievous, I would say that this raises the possibility of compulsory volunteering. I know that it is not quite that. I have had experience of debating with Prime Ministers and others whether or not compulsory volunteering is a credible option, so I will not stray down that road.

We agree with the Minister about the value of work experience. When I was appointed Employment Minister in the previous Government, the Prime Minister told me that, as employment was rising in general and in particular among young people, the challenge was to get it to come down again. He would lend a hand through chairing the National Economic Council. It was implicit that it would be particularly helpful if that were achieved by the spring of last year rather than the summer. We did a range of things: the young person’s guarantee, the six-month offer, the September guarantee of education for young people and expansion of apprenticeships and, crucially, Backing Young Britain, which was in some ways the best example of which I can think of what others might describe as the big society.

It was a considerable effort to persuade employers in this country to offer young people opportunities for work—as work experience, as internships, as apprenticeships, or as whatever else they could offer to give young people a chance and something to put on their CV. We also developed sector routeways. When the Minister listed the names and different sorts of employers who have already expressed an interest in his work experience scheme, it was interesting to note that quite a few of them were in hospitality. I wonder what has happened to those sector routeways in care and in hospitality in particular and the part that they played in creating tens of thousands of opportunities for real work for our young people. We also had the fiscal stimulus, as a result of which we started to see growth come back into the economy and, magically as instructed, unemployment, particularly youth unemployment, fall in the spring. It is unfortunate that it is now going back up.

Work experience was vital to that effort and to all those packages for which I was responsible last year and the latter half of the year before. Therefore, I cannot argue with the Government in their wish to bring forward a work experience scheme. I would also encourage them to develop a form of work experience along the lines of what we would describe as internships. They are not a silver bullet—as, if I were unkind, I would say Ashley Cole might have found out at Chelsea recently—but they can be extremely helpful. In my private office in DWP, for example, we took on an intern who turned out to be an excellent official and who has been taken on permanently by the department. I would be interested to learn whether the Minister is now taking on another intern given that he knows the value of internships in the past.

We have seen the success of more extended schemes such as the Future Jobs Fund, which provided six months’ real work, at proper minimum rates of pay, through work experience, volunteering and the Community Task Force. I commend to your Lordships the work that we did with BTCV, CSV, v and Volunteering England, which provided 50,000 young people with work experience opportunities in the voluntary sector. I would be interested to learn whether any voluntary sector organisations—the Minister did not list any—will be engaged in offering work experience programmes. The outcomes from that scheme—I spoke to the chief executive of BTCV yesterday—were exceptional given the quite limited time during which the work experience opportunities were available.

The principle behind the proposals is therefore fine, although I have a few questions for the Minister in addition to those that I have already asked—he knows that I like to ask a few questions. Why the mandation? When we introduced our work experience schemes, which proved successful, as I have said, we did not need to change regulations in this way to require mandation. Might not a potential unintended consequence be that people will say, “Well, I’ve still got to fulfil the jobseeker regime in terms of being available for work and actively seeking work, which I’ve got to demonstrate to the adviser at Jobcentre Plus, so why put at threat my benefit by signing up to a scheme where, as a sanction, I could lose it? Why not just go and volunteer, and build up a CV by volunteering and doing work experience in other forms rather than joining the Minister’s scheme, where I do not get any extra money but where I might lose it?”

The Minister said that this was part of a wider package for young people. Of course, whatever the Government feel they can do to help young people is welcome, because we are extremely concerned about the rising numbers of young people who are unemployed, particularly the huge number of graduates who are now in unemployment. Are there any guarantees attached to his package? We had a guarantee that you would get some useful activity at least, even if it meant the Community Task Force as the back-stop provision, if you like. That meant that we could require them to do something and that doing nothing was not an option. Is doing nothing an option under the Minister’s scheme? How will he procure this provision? Will it be in the normal way, or will he just encourage people to offer work experience opportunities but not actually procure work experience opportunities, as I recall we did by, for example, using Reed in Partnership?

In summary, there is nothing that I can oppose in considering this statutory instrument in Committee today, but I still need a bit of convincing that it is needed. I would be grateful for answers to my questions, particularly as to whether there will be unintended consequences, with people not wanting to engage because of the threat of sanctions.

--- Later in debate ---

[Baroness Thomas of Winchester]

My Lords, I shall add one or two comments. I, too, very much welcome these regulations. I was interested that the Minister said that they were aimed primarily at 18 to 21 year-olds. That presumably means that the Jobcentre Plus advisers have some discretion and that the only thing that is absolutely laid down is that the person must be over 18. Will that be known by all the Jobcentre Plus advisers so that they do not prevent anyone from getting a work experience placement if they are, say, 25? Someone may have had a very chequered career and may have been in and out of work; they might quite like to be involved in this scheme but may be over 21. Can the Minister clarify that? Furthermore, why did the Minister alight on the time span of two months? I would rather like one of these work experience people myself, but I suppose that the House of Lords is not an employer. It is a pity—maybe we should be.

[Lord Freud]

My Lords, we have had an interesting debate and, as usual, some snappy questions. One of the things that this short debate has clearly demonstrated is the concern that we all share for the plight of young unemployed people. Their plight is why it is so important to develop this scheme and other schemes like it. I shall try to work through some of the questions.

I start by making the point that we have effectively built something of a Catch-22 for young people in that employers require work experience, or are much more comfortable with people who have demonstrated an ability to hold down some good work experience, whereas the support system for poorer youngsters on JSA has been loath to let them do it. The previous Administration carried out some experiments and programmes on this, as the noble Lord, Lord Knight, pointed out, and I fully and absolutely acknowledge that we are building on previous experience. The noble Lord referred to the contract with Reed. I was interested to read the report on the Reed work experience and some of the interesting lessons there. One of the most interesting lessons was that the switch from going off JSA, which was a kind of bureaucratic requirement, on to a training allowance led to the loss of many youngsters, some simply because they could not transfer smoothly. The other factor that made that programme improvable—I will express it like that in the interest of consensus—is that the youngsters lost the link with jobseeking in that period. It was called a training allowance but they did not feel that they were still linked in. They lost the link with their Jobcentre Plus adviser.

This is a very different approach, which we incorporate within the mainstream JSA offer. The question “Why mandation?” was asked. I think that this is one of the things that starts to pull it together. We are saying to people, “You remain on the conditionality that JSA requires—you have to go on job searching. We will be more flexible about how you do that, working with the employers, but mandation remains in your JSA requirement and that carries forward into your work experience. Also”—as the noble Lord, Lord German, pointed out—“we have balanced it so that you have a week to work out whether this is really completely intolerable, and you can get out without a sanction. But once you have committed, you are like any other employee and you cannot bunk off without some repercussions”. In that way, the JCP regime is replicating what an ordinary employer would do to an ordinary employee where there is a set of mutual obligations. We cannot have a situation where employers, for whom we will want to make a lot of effort to ensure that this work experience is of great value, feel that they waste those resources because somebody can just stop turning up. That is the reasoning behind that.