Jobs and Social Security

Stephen Timms Excerpts

Wednesday 28th November 2012 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

We have had a good debate to which the backdrop is yesterday’s publication of the first Work programme outcome data. One cannot help but admire the former employment Minister, the right hon. Member for Epsom and Ewell (Chris Grayling), who ensured that no data at all were published before the reshuffle and so secured his trouble-free ascent into the Cabinet, rather unfairly leaving the new Minister to face the music yesterday.

The hon. Member for Amber Valley (Nigel Mills), at least, recognised that the figures published yesterday were disappointing, and he is absolutely right. The Secretary of State did not recognise that; in fact, he claimed the opposite. It has been suggested that we have been unfair in evaluating the performance of this programme after only 12 months, but all we have done is to apply the measures and the criteria set out by the Department for Work and Pensions itself. The invitation to tender for the Work programme says:

“DWP will set a non-intervention performance…reflecting the number of job outcomes that would be expected to occur in the absence of the Work Programme.”

It goes on to say that the figure would be 5% based on historical job-entry rates—that is, that it would expect 5% of people referred to achieve a job outcome within 12 months. It then says that it would expect the situation to be better than that, and so makes the figure up to 5.5%, adding:

“DWP expects that Providers will significantly exceed these minimum levels.”

We discovered yesterday that they did not significantly exceed 5.5%; in fact, they got nowhere near it. The BBC reported yesterday that the figure was 3.5%, but for the first month’s cohort it is 2%. Oddly, despite the fact that the DWP refers to the “key performance measure”, that number does not appear in the data published yesterday. Strangely, it has been omitted and we have to work it out for ourselves. Given that the Minister’s Department describes it as the key performance measure, will he give us his calculation of it based on yesterday’s data?

The Secretary of State suggested that we were unfairly taking the employment and support allowance data out of the numbers and therefore reducing them. In fact, the reverse is the case. The ESA data are by far the worst. The key performance measure for the ESA data comes to 1%—a disgraceful level of performance. The Minister needs to tell us what he is going to do to address the lamentable failure of the programme to help new ESA applicants.

I congratulate my hon. Friend the Member for Manchester Central (Lucy Powell) on her excellent maiden speech. The depth of her roots in the community she represents was very clear, and I know that she will robustly defend her constituents from failures of the kind that we are debating.

Ministers need to sort out specific problems with the design of the Work programme. First, for over a year we have been pointing to the folly of the secrecy in which the programme has been cloaked. With previous programmes, providers have gladly published their performance data so that everybody could see how they were getting on and make comparisons between them—it was simply taken for granted that that was what they did—but the previous Minister banned them from doing that. I wonder whether he read the “Open Public Services” White Paper that was published by the Minister for the Cabinet Office and Paymaster General in the summer last year. It is worth a read. It asserts—rightly in my view—that:

“Open public services that are more accountable to the people they serve (both the users and the taxpayers who fund them) will be better services.”,

and that, importantly:

“Providers of public services from all sectors will need to publish information on performance and user satisfaction.”

Not only have Ministers not required providers to publish such information on the Work programme, they have actually banned them from doing so. Yesterday’s data were the first on job outcomes in almost 18 months since the programme began. If providers had published their own data, everyone would have seen quickly which approaches were working well—and which were not—and changes could have been made. As it is, we have had to wait almost 18 months, and that cloak of secrecy is one reason for the disappointing performance.

It would be useful to have data on Work programme user satisfaction, as the White Paper demanded, although I fear that after the drubbing yesterday, there is next to no chance of us getting it. Such data should be published because, as the Prime Minister argued in the foreword to the White Paper, that information would be a powerful lever for improvement. Will the Minister at least commit to lifting the ban on providers publishing their own performance data? The ban was imposed only to ensure no impediment to his predecessor’s appointment to the Cabinet, but since that has been accomplished, it should now be scrapped. Lift the veil and let the sun shine in!

I have a couple of other suggestions on how to salvage the programme and I want to pick up on a point made by my hon. Friend the Member for Huddersfield (Mr Sheerman) about skills. The Government have increased the number of apprenticeships—my right hon. Friend the Member for Tottenham (Mr Lammy) rightly expressed some concern about what those have amounted to, but nevertheless, numbers have increased. Hardly anybody on the Work programme ever gets on an apprenticeship, however, although many should be able to—most people think that apprenticeships exist to help unemployed people develop skills to get into work—and I urge the Minister to work with his opposite number to make that possible. My hon. Friend the Member for Stretford and Urmston (Kate Green) is right to say that we must address the current rate of unemployment among young black men, which is more than 50%, and the Work programme cannot be blind to the scale of the problem.

The Minister has spoken about what has gone wrong, and in an interview with The Daily Telegraph published on Saturday he made clear who he thought was to blame. He said it was “proving difficult” to return people to long-term work—he was getting his excuses in early—and the article stated that:

“He called on private firms…which have been given the task of retraining the long-term unemployed and placing them in jobs, to ‘get their act together’.”

So, it is their fault. Private firms are the reason the programme has not delivered—by the way, the Telegraph headline was:

“Just one in 20 aided by back to work scheme”.

Presumably that is what the Minister hinted at, but in fact the number was a great deal smaller. The Financial Times got the number right yesterday morning when it stated that

“the employment minister, will confirm the actual figure—which some believe could be as low as 3 per cent—when he publishes official statistics on Tuesday.”

The Minister reassures us that poor performance means the Government are saving money, but as my hon. Friend the Member for Edinburgh East (Sheila Gilmore) said, that is no comfort for the young unemployed parent who is worried about paying for Christmas but has been parked and is not getting the help they need to get back to work. They do not want to know that the Government are saving money; they want the help they were promised to get a job.

Why has it gone so badly wrong? The Minister says that providers need to get their act together, but it is Ministers, not providers, who have got this so badly wrong. Ministers assured providers bidding for the Work programme that their economic policies would lead to steady growth and falling unemployment. They did not say those policies would lead to a double-dip recession, although tragically they did.

My hon. Friend the Member for Wansbeck (Ian Lavery) is right: we need a plan B. It is not Work programme providers who must get their act together but Ministers who must come forward with policies to deliver jobs and growth. It is difficult to get people into jobs if there are no jobs. The lack of growth and jobs is hobbling the Work programme—no amount of providers getting their act together will change that.

The Work programme has fallen miles short. I hope the Minister comes clean on how far short. What is that key performance measure? It is not the providers’ fault. The Government promised steady growth and falling unemployment, but that has not happened. The providers are not to blame for the ludicrous ban on data, which has undermined the programme. I urge the Minister to announce tonight at least that that ban will be lifted.

I also ask the Minister to commit to address the truly appalling performance among applicants for employment and support allowance. Just 1% of those referred to the programme in the first three one-month cohorts were placed in a sustainable job. When will he sort those problems out?

--- Later in debate ---

[Mr Hoban]

My hon. Friend is absolutely right. We need to see programmes of reform to get people off benefit and into work. It is about making sure that we equip people with the skills they need in a 21st-century economy. Programmes such as the Work programme enable that to happen.

I was rather disappointed that we did not hear more from the shadow Minister about Labour’s bank bonus tax. This is a big feature of the motion before us today. Yet again, the Opposition trot out the bank payroll tax as the solution. The problem is that it is their solution for everything. How would they pay for a VAT cut? The bank payroll tax. Higher capital expenditure? The bank payroll tax. Reversing changes to child benefit? The bank payroll tax. At the last count, a tax that they think would raise £2 billion has been used 15 times over to fund tax cuts and spending increases.

[Stephen Timms]

rose—

[Mr Hoban]

I have three minutes left, so I am going to continue.

The other thing in the motion that neither the right hon. Gentleman nor the shadow Secretary of State referred to—[Interruption.] No, let me talk about something that they did not refer to in their motion. The right hon. Gentleman talked about the increased benefit bill—£20 billion. Is he actually saying, given that most of that relates to uprating, that he is opposed to uprating pensioners’ benefits? Is he opposed to the triple lock that we introduced? Does he want to see a return to the days when the previous Government increased the state pension by 75p? Is he really saying that that is what he is against? The reality is that that is part of the reason why we have seen the benefit bill rise, and that is also because we are seeing post-dated cheques left by the Opposition who, when they left government, told us there was no money left.

[Stephen Timms]

rose—

[Mr Hoban]

I am not going to give way. I want to try to address some of the points that have been raised in the debate.

It is clear that the Work programme is in place. What we saw yesterday was a snapshot—207,000 people have got into work as a consequence of the Work programme. The Opposition should be celebrating that achievement, not criticising it. In the same way that we heard nothing in their speeches to congratulate the private sector on creating 1 million net new jobs, they said nothing about falls in unemployment and nothing about the fact that the previous Government fiddled figures and that youth unemployment is now lower than when we came into office. They have no ideas. They complain about the welfare bill, but oppose measures to bring it down. They fail to acknowledge the doubling of long-term unemployment during the recession and the rise in youth unemployment even when the economy was growing. They fall back on the empty rhetoric of the bank payroll tax and hark back to schemes that were bad for the unemployed and bad for the taxpayer.

The truth is that more people are in work, fewer people are unemployed and youth unemployment is down. One million net new jobs have been created by the private sector since May 2010. We are making work pay by reforming the benefits system and introducing universal credit. There are 190,000 fewer people now on out-of-work benefits than there were in 2010. That is the scale of the welfare reform that we are introducing. Rather than condemning people to a lifetime on benefits, we are providing support to get them into work. We have provided more help for young people, through the £1 billion Youth Contract. The work experience element is cheaper and as effective as the future jobs fund jobs that the Opposition parade.