Work Programme (Wales)

Stephen Timms Excerpts

Thursday 1st May 2014 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

After three years of virtually no growth in the British economy after the general election, we are now finally seeing a recovery taking shape, which is very welcome. We all hope that the recovery will be sustained. The central labour market challenge now is that, following that period, we have unprecedentedly high numbers of people who have suffered unemployment in the long term. That needs to be at the centre of policy over the period ahead.

Tackling long-term unemployment is very urgent. As the Welsh Affairs Committee has pointed out, the Work programme is not up to that task. In fact, long-term unemployment rose inexorably to the highest level for 20 years in the two years after the Work programme was introduced. We need to do much better.

The facts about the Work programme’s performance in Wales have been set out fully in the report. The Government’s response says, “Well, it is not quite as bad as it looks, because 14.7% of those who started on the Work programme in Wales have achieved a sustained job outcome.” The Chair of the Select Committee said that it had gone up a bit to 15.1%, and I think that is right, on the most recent data. However, 85% of those who went on to the programme have therefore not achieved a sustained job outcome. It is very difficult to see how 15.1% can be regarded as good performance, and we should bear in mind that people have spent two years on the Work programme and that they have already been out of work for a year, usually, when they start on it. We are therefore talking about people who have had three years out of work, and it looks as though 85% of those who started on the Work programme do not have the sustained job outcome that is the purpose of being there. That looks pretty disappointing to me.

As my hon. Friend the Member for Blaenau Gwent (Nick Smith) rightly said, the policy has been particularly disappointing for young people. The youth contract has been a serious damp squib. Wage subsidies provided under that have had minimal take-up. I understand that Ministers have now given up on achieving the take-up that they initially forecast, and it is expected that spending on the youth contract will be much less than was originally thought. If the Minister could tell us her current expectations about that, it would be helpful.

It is true in Wales, as it is elsewhere, that the Work programme has been terrible for people who are out of work on health grounds and in receipt of employment and support allowance. Only 5% of them across the UK have secured a sustained job outcome after two years, so the failure rate has been 95%. If I am reading the Committee’s report correctly, at table 4, the proportion in Wales is less than 3%. Again, those people have spent two years on the Work programme, but it appears that less than 3% of them have a sustained job outcome. The Work programme has been very disappointing for jobseekers generally; for that particular group, it has been terrible. The report tells us that 2,630 former recipients of incapacity benefit were referred to the Work programme in its first two years. Of that 2,630, 10 secured a sustained job outcome.

We were told at the outset that the design of the Work programme would enable extra support for those facing the greatest barriers. In fact, many of those with the greatest barriers—such as people with health problems—have simply been parked by the Work programme and have not had any serious help to get back into work.

The report refers to alignment between programmes in Wales and in the whole UK. As my hon. Friend the Member for Llanelli (Nia Griffith) pointed out, the Welsh deputy Minister for Skills and Technology, Ken Skates, who I think is doing a fantastic job, made a statement on Tuesday about his discussions with the Minister. I hope that she will be able to tell us something from her perspective about the progress of those discussions.

Inspired by the success of the future jobs fund, which was in place across the UK before the election, the Welsh Assembly Government have established Jobs Growth Wales, which my hon. Friend the Member for Newport East (Jessica Morden) drew to our attention and the report mentioned. By contrast to the disappointment of the Work programme, my hon. Friend the Member for Swansea West (Geraint Davies) was absolutely right that Jobs Growth Wales has delivered for young people in Wales.

The shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Leeds West (Rachel Reeves), and I visited Cardiff last month to find out more about how that success has been achieved. We visited a rapidly growing software company employing 150 people in Cardiff. It has taken on young people through Jobs Growth Wales. It told us that it took on 12 young people last year. The company is Israeli-owned, and it had quite a tough job making a pitch to the board in Israel that it should take on those 12 people. It was able to win that argument only because of the wage subsidy from Jobs Growth Wales, but having taken on those 12 young people, 11 have now become permanent employees. The 12th was not kept on, but that young person has gone on to get a job in another firm. We met four of the recruits at the company’s offices in Swansea. They all told us that they had found it extremely difficult to find a job. One told us they had applied for hundreds of jobs; it was Jobs Growth Wales that gave them a break.

As my hon. Friends have said, the performance figures from Jobs Growth Wales are very impressive. The most recent figures that I have seen suggest that of those who have completed the Jobs Growth Wales programme up to 10 April, 45% continued in employment after their six-month job subsidy ended with the same employer. Another 8% were able to get work with another employer and 26% went on to an apprenticeship. Most of the employers recruiting under Jobs Growth Wales are small and medium-sized enterprises. The programme has very strong support from the Federation of Small Businesses and, as my hon. Friend the Member for Swansea West said absolutely rightly, the lessons from that success should be applied right across the UK, and that is precisely what Labour’s compulsory jobs guarantee will do. We want to guarantee a choice of job offers to 18 to 24-year-olds who have been in receipt of jobseeker’s allowance for a year and—this is different from what is happening in Wales—to over 25-year-olds who have been in receipt of jobseeker’s allowance for two years. Every European Union member state, except for the UK, is now introducing a youth jobs guarantee. We should do so as well, and I very much commend what is being delivered in Wales.

The Select Committee was right to point out the extent of the disappointment in Wales about how the Work programme has done so far—less well than elsewhere, and it has been rather disappointing elsewhere, too. It has been at its worst in Wales. Jobs Growth Wales, by contrast, has established a much more encouraging record. In our view, the lessons from that need to be applied in a compulsory jobs guarantee in every part of the UK.