Select Committee on Education and Employment First Special Report

Seventh Report: The Performance and Future Role of the Employment Service (HC 197)

Seventh Report: The Performance and Future Role of the Employment Service (HC 197)
Published: 20 July 1999
Government Reply:  Seventh Special Report,

 Session 1998-99 (HC 858)

Published: 26 October


Government Response
Further Government Action

1. If the new placing validation system is to blame for the ES's recent poor performance, then this is very worrying. The implication is that the ES may in fact have been under-performing for a number of years. What appears to be a downturn in performance starting in 1996-97 may simply reflect the start of an accurate performance measurement regime.

ES performance since 1996­97 has been affected by a number of factors. In 1996-97 the major challenges of introducing the new Labour Market System (LMS) and Jobseeker's Allowance had a significant transitional impact: we judge that underlying performance began to recover towards the end of that operational year.

During 1997-98 and 1998-99, the strict new arrangements introduced by ES for validating placings and the ES's excellent performance in implementing the New Deal and other Welfare to Work initiatives will have had an impact on the recorded Annual Performance Agreement (APA). Disentangling the effects of these different factors is virtually impossible. However, performance in the first quarter of 1999-2000 has been encouraging (see below, point 3).

ES performance since 1996- 97 has been affected by a number of factors. In 1996-97 the major challenges of introducing the new Labour Market System (LMS) and Jobseeker's Allowance had a significant transitional impact: we judge that underlying performance began to recover towards the end of that operational year.

During 1997-98 and 1998-99, the strict new arrangements introduced by ES for validating placings and the ES's excellent performance in implementing the New Deal and other Welfare to Work initiatives will have had an impact on the recorded Annual Performance Agreement (APA). Disentangling the effects of these different factors is virtually impossible. However, performance in the first quarter of 1999-2000 has been encouraging (see below, point 3).

2. Since the ES is now adopting a more sophisticated method of monitoring and managing performance, we recommend that it publish local office performance figures on an annual basis.

The Government welcomes the Committee's recommendation. ES has already committed itself to publishing quarterly on the Internet, its national performance against APA targets. In response to the Committee's recommendation, it now proposes to publish key annual performance figures for each local office.

The ES local office APA performance achievement for the operational year ending March 2000 has been published on its web site since August 2000. This includes performance achieved against all APA indicators devolved to local office level. Performance will be published annually from now on, at the same time as the publication of ES Annual Report.

3. The ES's failure to meet its targets is likely to have a negative effect on staff morale, generate a climate of failure within the service and damage its public profile.

The Government is confident that there is no climate of failure within ES. On the contrary, the Agency's 1999 survey of ES employee opinion registered the highest result for overall job satisfaction since the survey started in 1988. ES was certainly disappointed at its failure to meet some key APA in 1998-99. Nevertheless Ministers and senior ES management recognised and publicly acknowledged the huge amount that ES staff had achieved during the year, especially in the delivery of New Deal. Measures to support improved performance were put in place and so far in this operational year, the results have been very encouraging. All APA placing targets for the first quarter of the year have been exceeded nationally, and weekly average achievement is higher for almost all placing targets than in 1998-99. We believe that our staff remains justifiably proud of its achievements and motivated to succeed in the future.

The Year 2000 survey shows that job satisfaction remains at a high level with continued improvements in employees' feelings of achievement. More ES people now feel ES is committed to Customer Satisfaction and believe our service to customers is improving; many say they are proud of the service ES provides to customers.

4. The pace of change within the organisation is one of the factors frequently cited for the ES's poor performance and we believe that a radical restructuring of the targets at this stage would be disruptive.

We welcome the Government's review of the nature of the ES's APA and we recommend that it use this opportunity to move away from the use of placement-based performance targets. Data about the number of placements should still be recorded, but they should be replaced as the core measure of the ES's effectiveness by targets that measure more accurately the value added by the Service.

The Government's review of the ES APA is intended to ensure that the Agency's aim, objectives and targets properly reflect priorities and the key outcomes which ourselves and the public expect ES to deliver. We are consulting very widely and will give careful consideration to the Committee's views. The outcome of the review will be announced before the end of the year.

A fundamental review and external consultation took place of the ES APA at the end of last year. This produced the new APA, which reflected Ministers' objectives for ES, reinforcing the ES's contribution to the effective working of the labour market and helping unemployed people into sustained employment.

The new APA supports and encourages ES to improve services to jobseekers and employers and promote equal opportunities, through effective partnership working, increased use of information and communications technology and modern business methods.

The new APA has moved away from stand-alone placing targets, and has introduced a set of "nested" targets, which focus ES on the most disadvantaged jobseekers.

The ES has introduced a new customer service target for employers, which gives employers a greater prominence in the APA. The new employer service target is based on a regular survey of a sample of employers who have used ES services and is linked to the ES employer service standards.

Two milestone targets have been introduced for the first time in the ES APA.

These measure ES's achievement in areas where no direct placement activity is involved, but structural changes to facilitate activity is planned or underway.

The targets are:

· Modernising the ES—ES will be introducing an Internet based Learning and Work Bank, a new Labour Market computer system, touch screen kiosks for jobseekers to access job vacancies and a single national telephone number for employers by March 2001.

· Work Based Learning For Adults— The Employment Service will be working towards the successful transfer of Work Based Learning For Adults from Training and Enterprise Councils to the Employment Service in England by April 2001, to form part of a coherent package of support for unemployed adults.

A key policy objective is to move people permanently from welfare to work by helping them find and keep sustained employment. The ES has a pilot target to measure sustainability in the Northern region and Wales. This will measure the number of people who remain off JSA 13 weeks after starting a job.

6. We recognise the importance of these proposals, and we believe that the White Paper provides a real opportunity to develop the relationship between the work-focused ES and the organisations that will deliver the lifelong learning agenda. However, there is a danger that this opportunity may be missed.

The Government recognises the necessity for close liaison between the post 16 services and the ES, to offer a seamless service to clients. We will take this fully into account as the new framework initiated by the White Paper develops.

7. The ES is in a position to expand its role in providing a gateway to, and helping to co-ordinate, the provision of a broader range of employment-related services to a wider range of clients. Its services should be targeted not just at the unemployed but also at those who are in employment, but still dependent on in-work benefits, and to those who are without work and wish to work, but who are not registered as unemployed. There is also an opportunity for the ES to expand its services to employers. As well as its core work of placing unemployed people into jobs, its services should include:

(i) job broking services for the employed and those who wish to work but who are not registered as unemployed;

(ii) the provision of careers and training advice and guidance for all its clients, in co-operation with the full range of Information, Advice and Guidance (IAG) providers and the proposed agency for 16 to 19 year olds; and

(iii) human resources advice for employers.

The Government considers that ES's main role should be to help people without a job to find work. ES has a particular responsibility to target help on those who are at greatest disadvantage in the labour market and to ensure that they receive advice, training and support that meets their individual needs. This responsibility is not confined to JSA claimants alone. Our Welfare to Work policies, including the ONE service, require ES increasingly to offer services to people who are without work and wish to work but who do not receive JSA. We believe this is a natural extension of ES's expertise and focus. The Government shares the Committee's wish to see improved provision of employment-related services to this broader range of clients. Work­related education and training is a valuable route into employment for many people and ES has an important role to play in ensuring that their needs are met by working in close partnership with specialist providers of training and careers advice. We intend to build on that and we will therefore ensure full ES involvement in our plans for Lifelong Learning, post-16 services and IAG.

The Government strongly supports ES's efforts to improve the quality and accessibility of its services to employers. High standards of service will encourage a wider range of employers to open up more opportunities to people without work. We therefore welcome ES's new and enhanced employer service standards and the better co-ordinated approach to employer needs which the Agency has been developing as part of its customer service strategy.

Since Autumn of 2000, ES services have become much more accessible to a wider audience. It's close to completion that all ES vacancies will be available on the Internet together with some thousands of vacancies from other European public employment services and a pilot selection downloaded from agencies and Internet recruiters. It is anticipated that many more employed jobseekers will use this facility than presently use Jobcentres. In turn, this should lead to employers being more ready to notify their vacancies to ES, thereby enhancing ES's capability to help its priority clients find work.

Since January 2000, ES have been piloting a Callcentre Service for employers to notify vacancies. This has proved so effective, that a national launch of Regional Callcentres are planned for Autumn 2001.

In November 2000 ES began a pilot-based in Bath and covering the counties of Avon, Gloucestershire, Wiltshire and Somerset—of a special service for clients who are looking for higher level vacancies, called ES Plus On-Line.

Alongside this ES have been in consultation with REC and DTI about providing advice and guidance to employers about covering gaps in their workforce during temporary absences. As a result a booklet called "Coping with maternity, parental and emergency leave & other absences—a guide for employers" will be launched in December 2000, giving employer's advice about the services on offer.

Through membership of the local IAG partnerships, ES has the opportunity to plan and access a network of local IAG provision to meet the employment and learning needs of its clients.

8. Under the proposal set out in Learning to Succeed, a new non-departmental public body, the Learning and Skills Council is to be created in an attempt to link coherently the different elements of post-school learning. The intention is that membership of the Council will be made up of organisations "representing the consumers of education and skills", and it is expected that employers will make up the largest single group. We believe that this is an important step, and we welcome it as a development, which will make the link between learning and work more explicit.

9. We recommend that the Secretary of State appoint a representative of the Employment Service as a member of the National Learning and Skills Council and that the ES be represented on the Local Learning and Skills Councils.

We are at present consulting over the structure and functions of the Learning and Skills Council at both national and local level and will consider the Committee's recommendation in that context. The closing date for comments was 15 October. As the White Paper Learning to Succeed suggests, the ES will have a key role to play at the national level, working with the LSC's Adult Learning Committee. At the local level the ES working with the local arms of the LSC and with Local Learning Partnerships, will be at the heart of the new arrangements.

Subject to Parliamentary approval for the necessary legislation, we will work with the LSC to ensure that work force development is adequately covered. Where large-scale redundancies are threatened, we will work with employers both prior to and after the redundancies to help identify skill needs and job opportunities for those affected.

Substantial progress has been made in setting up the new Learning and Skills Council. The Learning and Skills Act received Royal Assent on 28 July 2000, and the Learning and Skills Council that it establishes became a legal entity on 1 September 2000. The LSC will formally take up its duties from April 2001, and will operate at national level and through its 47 local Learning and Skills Councils. One of the major objectives of the new arrangements for the funding and planning of post-16 provision is to build on the success of New Deal and improve still further the opportunities available for unemployed people. Local Councils will work with ES to update and develop information on current and future skill needs and skill gaps in the workforce, and to improve intelligence on the recruitment market, to steer post-16 education and training provision. The LSC is being set up as a Non Departmental Public Body. The ES will be a key partner in planning provision and in helping to deliver the right national and local strategies for getting people the skills and qualifications they need to get in to work. The Secretary of State for Education and Employment has made it clear that the ES Chief Executive should be invited to attend meetings of the LSC, and Field Directors should be invited to attend local LSC meetings.

10. It is not yet clear what form the new service to 16-19 year olds will take, but it is essential that the links between this service and the ES are strong and made explicit. We believe that there is much greater opportunity for these two services to co-ordinate their activities, to share information and to provide in partnership a holistic service for this client group.

The Government welcomes the Committee's comments that the creation of the new support service for young people provides an important opportunity significantly to improve links with ES. We believe there is scope for a more integrated delivery of services to young people by the two organisations. Details will be considered in the light of replies to the current consultation on the youth support service.

11. We believe that the ES has a leading role to play in the provision of IAG for adults.

12. The ES must be at the hub of the IAG networks, which are envisaged as part of the Lifelong Learning initiative.

13. We recommend that the Employment Service should be represented on the accreditation body for IAG.

The Government agrees that ES has a significant role to play in the provision of Information Advice and Guidance (IAG) for adults. We are encouraging local learning partnerships to work closely with ES to ensure that the services available to the public from both sources "join up" effectively at the local level. We are keen to see further joint working as the policy for local IAG services develop. We would welcome closer involvement by ES in the work of the Guidance Council's Accreditation Board. However, the Accreditation Board is independent of Government, and its membership is a matter for the Guidance Council. We have alerted them to the Committee's recommendations.

Acknowledging the importance of the ES role in providing local information, advice and guidance services to adults. ES is now required to be a full member of the local IAG partnerships. This now provides ES with the opportunity to work with local partners to plan and deliver a co-coordinated network of local IAG services.

14. We welcome the Government's proposal to transfer the responsibility for Work Based Learning for Adults from TECs to the ES.

15. We would welcome assurances from the Government that a more sophisticated approach to the assessment of outcomes will be adopted now that Work Based Learning for Adults is under new management.

The White Paper Learning to Succeed, made clear that the transfer of Work-based Learning for Adults (WBLA) to ES was intended to simplify current arrangements, and achieve greater coherence with existing provision, including the New Deal. From April 2001 we want arrangements in place that will attract and reward providers, while contributing to the delivery of a comprehensive package of support for unemployed adults. Over the coming months, we will be considering what changes are required and in particular, we shall examine the funding and contracting arrangements that are in place across all DfEE sponsored provision.

In the interim an important change to WBLA funding has already been implemented to encourage TECs to focus more attention on entrants with basic employability problems. TECs are now paid 75 percent of unit funding for the start and the in-training process with only 25 percent being made available on evidence of successful outcome. Participants with basic employability needs make up about one third of the programme and in the current year, 36 percent more have started than in the same period last year.

16. We hope that the ES's stewardship of Work Based Learning for Adults will provide the opportunity to re-examine the effectiveness and accountability with which the Scheme's funds are managed.

The Government expects ES to be properly accountable for all public funds, which are entrusted to it. Work to minimise the risk of financial impropriety in WBLA will continue during the transitional period between now and April 2001.

17. We believe that the transfer of Work Based Learning for Adults to the Employment Service presents an opportunity further to enhance the work­based elements of the Scheme.

Evaluation evidence demonstrates that work­based attachments with employers increase the likelihood of unemployed adults securing sustained employment. We will take full account of this finding during our review of WBLA provision. The work­based opportunities from the programme fit very well with the labour market focus of the rest of the ES menu of support.

18. We have set out a challenging agenda for the ES. It is an agenda that will re-focus the attention of the public employment service on retention and progression in employment rather than job placements. It is also aimed at ensuring that the issue of workforce development is tackled in a co-ordinated and inclusive way. It recognises the importance of reaching out to those who might be at some distance from the labour market and of the need to strengthen its role in the provision of information, advice and guidance. In our earlier discussion we argued that future targets for the ES would need to reflect to a greater degree the activities, which are most important to its work. The need to reform the targets is even more important given our proposals for its expanded role. If the ES were to take on this role, it would need to show quite quickly that it was making a difference in a number of key areas. In addition to targets relating to its core work, it would need to be measured on its ability to:

(i) help clients move from dependence on in-work benefits into independent employment;

(ii) move people into education and training, as a result of the information, advice and guidance that it provided or brokered;

(iii) help those who are without work and looking for work, but who are not registered as unemployed, take up employment, education and training options; and

(iv) increase the level of in-work training provided in the WBLA scheme.

The responses to previous recommendations are relevant. The Government believes that ES must retain its focus on helping people without jobs to find and keep work. However, ES has a substantial role to play in providing advice, guidance, training and support for a broad range of people without work, whether they are in receipt of JSA or not. The role of ES in helping to increase the employability of those who are at a disadvantage in the labour market and to help them to remain in sustained employment through training has been enhanced through the New Deal programmes and will develop further as ES assumes responsibility for WBLA. Continuous improvement in partnership working with a range of specialist organisations at local and national level will be essential if ES is to perform this role effectively.

As IAG partnerships develop their networks, ES will have access through full membership to the range of services provided by the network. This will include organisations providing specialist help to disadvantaged clients and those at a distance from the labour market.

In this context the development of the New Agency is relevant. The aim of the New Agency is to accelerate the move from a welfare system that primarily provides passive support to one that provides active support to help people become more independent, based on work for those who can and security for those who cannot.

The New Agency will have a new culture, and will be firmly focused on helping people become independent, and further embed a culture of rights and responsibilities within the welfare system.

The Agency will also help and support working age people who are out of the labour market for whatever reason. A single Agency will provide a better and more responsive benefits service to all people of working age, tailored to individual needs, and will be in the front line of the drive to modernise Government.

19. We recommend that any deepening of the role of the private sector, in ways which move beyond partnership with the ES, should be approached with caution, until a proper evaluation of the added value provided by the private sector in delivering the New Deal has taken place.

The Government fully recognises the importance of evidence-based policy. We shall pay careful attention to the findings of the full evaluation of the New Deal, which is taking place, including evidence about the value added by the private sector. There will be further evidence from the evaluation of the private sector's role in the New Deal 25+ pilots, Employment Zones and the ONE pilots.

20. Partnership with the private sector agencies is clearly one way in which the vacancy pool available to the unemployed can be enlarged, and we welcome the ongoing commitment to the partnerships expressed by all concerned.

The Government welcomes the Committee's recognition of partnership with private sector employment agencies as a way to increase the number of job vacancies available to unemployed people. The ES is continuing to work closely with agencies locally and nationally. In addition, it is developing jointly with the Federation of Recruitment and Employment Services a digest of good practice for Agencies and jobcentres designed to promote greater co-operation and joint work between them. It is also actively exploring ways of making both Jobcentre and Agency job vacancies readily available to all jobseekers via the Internet, by carrying agency vacancies on an ES website or linking together various websites.

The ES and the Recruitment and Employment Confederation (which has replaced the Federation of Recruitment and Employment Services) have established a joint Development Group. The Group has jointly prepared the "Good Practice Guide for Jobcentres and Employment Agencies". The Guide was published in November and has been sent to all ES Jobcentres and REC members.

ES has established a pilot group of 10 agencies and internet recruiters to develop and test ways of advertising bulk supplies of agency vacancies on the ES Internet Job Bank, which will open before the end of the year. The Job bank vacancies will later also be available on touch screen terminals—"Job points"—in Jobcentres. If the pilot experiment is successful, all agencies and Internet recruiters will be invited to advertise their vacancies through the Job bank, which will be the biggest repository of jobs in the UK.

21. We welcome this initiative [the co-location of a private employment agency with the ES in Woking] and look forward to seeing the results.

The pilot co-location of a Reed presence in an ES Jobcentre in Woking began in April 1999. We will send the Committee a separate note summarising the results of this pilot at the 6 month stage once they become available.

The Minister of State wrote to the Committee in March to explain that the experiment had not been an overall success and had been discontinued. In particular, concerns were raised from elsewhere in the private agency industry, that the experiment distorted the local labour market by providing the agency in the Jobcentre with an unfair commercial advantage. The industry felt that it would be better for ES to focus on more inclusive ways of working with the industry as is now happening with the internet job bank.

22. As this is such an important area we recommend that the ES report annually on the application and impact of sanctions, focusing attention on the subsequent behaviour and labour market outcomes of the individuals involved.

23. If sanctions are to play a role in the delivery of services to the unemployed then the ES must take special care to ensure that staff that are involved at any stage in the process of imposing sanctions on clients are absolutely certain of the way in which the criteria should be applied. We further recommend that the Government should monitor closely the effect of applying sanctions on the job search behaviour of those concerned.

We agree with the Committee that providing assistance for jobseekers while ensuring that they meet their obligations is one of the main roles of the Employment Service. The ES already publishes quarterly analyses of Adjudication Officers' Decisions on labour market aspects of JSA.

As part of the programme of research we have conducted on JSA, studies have been undertaken of people who have been sanctioned or disallowed benefit for labour market reasons. The job search behaviour of those sanctioned or disallowed is already monitored closely through the contact each jobseeker continues to have with the Employment Service at fortnightly jobsearch reviews and other periodic interventions. It would be impractical to monitor systematically the subsequent behaviour of every person sanctioned or disallowed benefit but we will consider conducting further research in this area.

We agree that ES should take special care to ensure that staff involved in applying sanctions are trained and have the necessary skills and expertise. They must make decisions which can be supported in law. The new Decision Making and Appeals system (DMA) which is to be introduced into JSA on 18 October 1999 will introduce more customer focused processes and provide better explanations about decisions taken on jobseeker's claims for JSA. Under DMA, sanctions and other questions relating to claims for JSA will continue to be decided by impartial decision makers on the basis of the facts and the law.

The Chief Executive of ES will be responsible for the quality of ES decision making. This work will be overseen by the ES Corporate Governance Committee, which is chaired by an ES non- executive director, to provide independent scrutiny of the processes. The Chief Executive will report publicly each year on the exercise of his responsibilities.

ES will continue to publish each quarter an analysis of JSA labour market decisions and report each year in its Annual Report the findings of its monitoring of decision making quality.

The Employment Service has comprehensive arrangements in place to monitor the quality of decisions and appeals and provide technical guidance to Decision Makers. Findings are reported to and revised by the Corporate Governance Committee chaired by a non-executive director. Evaluation of DMA will incorporate qualitative research with jobseekers that have received a sanction.

24. We recommend that the Government should undertake an enquiry into how effectively the jobseeker's legislation works in helping claimants find work and whether any changes in regulations may assist the Employment Service to perform its role more effectively. We believe that the rules should encourage people to engage in activities which might enhance their employability including part-time work, study and voluntary work where appropriate. We believe that the issues raised merit further investigation by the Government and would welcome their comments on these matters.

A four year programme of research on JSA and its forerunners, Unemployment Benefit (UB) and Income Support (IS), has recently been completed. The findings from that research will inform decisions as we continue to implement our welfare reforms. We want to ensure that JSA is providing the appropriate help and support for those who need it, while at the same time enabling and encouraging people to move from welfare to work. The Government recognises that benefit rules should not place unnecessary barriers in the way of jobseekers undertaking activities, which may enhance their employment prospects. We also believe that the incentives available should be in favour of people taking up work, rather than staying on benefit, even if they are undertaking a worthwhile activity such as study or voluntary work. The JSA rules provide considerable flexibilities for jobseekers to undertake activities while unemployed including part-time work, study and voluntary work. Under current regulations, for example, jobseekers may undertake unlimited amounts of voluntary work while in receipt of JSA, providing they continue to meet the underlying entitlement conditions.

The full-time education and training (FTET) and the voluntary work options available as part of the New Deal for 18-24s demonstrate our commitment to these activities as appropriate ways for some jobseekers to improve their employment prospects. It is important that we learn from the experiences of the New Deal and from the promotion of voluntary work through ONE and Millennium Volunteers.

25. We welcome the use of employer satisfaction surveys as supporting evidence for its customer service objective, but we recommend that the DfEE and the ES explore the possibility of developing a specific customer service target for employers.

The ES sees employers as key customers, and has recently launched a major initiative to improve its service to them. Research from the Institute of Employment Studies, due to be published at the end of September, shows that 84 per cent of employers who use ES are satisfied or very satisfied with the service they receive. This is an increase on the previous figures, from research in 1995.

However, ES believes its service to employers needs to become more consistent. As part of its current initiative, it has recently published a new Service Commitment for employers, under which it undertakes in respect of every vacancy notified by an employer to:

(i) provide a named contact to handle the employer's vacancy;

(ii) advise the employer about the services ES can provide;

(iii) confirm with the employer their minimum requirements; and

(iv) keep in regular contact with the employer until their vacancy is filled.

This is backed up by an action plan to increase ES local staff understanding of occupational and business requirements. We will consider the scope for a specific customer service target for employers as part of the review of the ES's Annual Performance Agreement.

Subsequent to the publication of its Service Commitment to Employers (September 1999), ES piloted a new performance target designed to measure the extent to which the agency was meeting the commitment's four standards (Providing a named contact to handle the employer's vacancy; advise the employer about the services ES can provide; confirm with the employer their minimum requirements; and keep in regular contact with the employer until their vacancy is filled). The pilot also tested the use of telephone survey techniques by an independent contractor. The pilot was a success and enabled the Secretary of State to agree a target for service to employers as part of the review of ES's annual performance agreement. The target for 2000/01 is an 80 per cent success rate against the ES's Employer Service Commitment. During 2000/01 ES will measure performance on a quarterly basis, alongside a broader assessment of employers overall level of satisfaction with the service received. The latter measure will enabled the agency's performance to be bench-marked against a range of public and private sector organisations.

26. We believe that, by expanding its range of services to employed people and other groups, and by targeting those groups more explicitly, the ES would help to dispel employers' prejudices about the quality of candidates which it is able to offer them. This would improve the range and nature of vacancies that it is able to offer to both its employed and unemployed clients.

As already described, the Government believes that ES must continue to focus its efforts on helping people without a job to find work, whilst at the same time seeking continuous improvement in its services to employers. This is the best use of the resources available to ES and the most effective way to take forward the Welfare to Work Agenda.

The internet job bank has made all ES vacancies open to anyone with internet access. The government believes this will broaden the range of applicants for jobs. Due to its size, the job bank will rapidly become the first port of call for many people using the internet to find work, which will encourage employers to notify their vacancies to the Employment Service. To help them do this, next Summer ES is opening a single telephone number service, open for 60 per cent more hours more than jobcentres for employers to notify their vacancies. There will be further opportunities for employers to notify vacancies by Email or to input them direct over the internet.

27. Although we recognise the work that the Employment Service has already done, we believe that the potential to harness technology for use in the area of employment assistance is enormous and we urge the ES to proceed with all reasonable haste.

The Government strongly agrees with the Committee that ES should proceed quickly in further harnessing technology, in a way which supports the aims of labour market policy. The Chancellor of the Exchequer announced in September that £18 million had been provided from the Capital Modernisation Fund to develop the software for, and delivery of, an IT Internet-based vacancy and CV service, and to test different types of access equipment for clients to use such a service. This project will be delivered through the Employment Service.

The ES is also working with its IT partner EDS, and with DfEE, to build on this initiative. Aims include:

(i) offering customers access to information about jobs, learning opportunities and advice on careers, via the Internet;

(ii) use of touch screen kiosks to access this information;

(iii) using call centre technology in addition to face-to-face service, building on initiatives such as the ES Direct pilot; and

(iv) modernising the ES's Labour Market System so that it supports the business more effectively.

Further details of these initiatives will be announced later, but we share the Committee's desire to move forward energetically.

From the later part of this year, any partner with internet access will be able to see all the vacancies held by ES including those downloaded in bulk from other agencies and from the European Employment Services network. Contact with partners suggests this will satisfy their needs to the extent that it will not be necessary to provide them with access to the ES internal Labour Market System. The Secretary of State for Education and Employment announced in November 1999 a comprehensive business change programme for the ES based on investment in ICT in line with the strategy outlined in the government response to the select committee's report. A further £50m, from the Capital Modernisation Fund was made available by the chancellor to begin the programme. The Modernising ES programme is being developed and delivered with ES's IT partner EDS and in close consultation with DSS, BA, IR and HMT following the announcement in March of the formation of the Working Age Agency. Current plans are to complete the replacement of all pc's in jobcentres by the end of January 2001 to enable improved software to be run. The pc's are compatible with those already installed for rollout within DSS from next spring .The Labour Market System is being modernized in successive releases from September 2000 to improve service for individuals and employers and enable better MI to be provided for Ministers and managers.

From mid-November 2000, all ES vacancies (and increasing number of vacancies from private sector agencies) will be available on the internet through the ES website and from the end of November as part of the Learning and Work Bank that will bring together information on jobs, learning opportunities and advice on careers. The jobbank will be available on an intranet to advisers in all jobcentres and progressively from November 2000 on touch screen jobpoints for jobseekers to use directly. By April 2001 a national network of customer service centres will enable employers to notify vacancies through a single, national telephone number. Vacancies will be directed to the relevant jobcentre by a postcode identifier for matching action to take place. Further announcements of these initiatives will be made at the appropriate time.

28. We recommend that ES Direct be made available to employed people on the same basis on which it is available to unemployed people.

The Government considers that ES's main aim should be to help people without a job back into work. The ES Direct pilot is a service which should contribute to that aim, and its marketing is targeted to people without a job. This targeting has been successful, to the extent that no more than 4 per cent of calls to ES Direct come from employed people. Given the small numbers involved, the Government agrees with the Committee that any employed people who do ring the service should henceforth be treated like any other jobseeker. We will keep this under review as the ES Direct Service is evaluated.

Employment Service Direct became a permanent service from March 2000, and has been available to employed people since October 1999.

29. We recommend that, provided the placement targets are discontinued or suitably modified, the ES examine ways of sharing vacancy information from the LMS with its partners.

The ES is currently exploring with its IT partner, EDS, how vacancies held on the Labour Market System (LMS) might be made available more widely to partners. It believes that the long-term solution is likely to be moving to hold ES vacancy details on a new web-enabled database. Both partners and jobseekers, via Internet-connected personal computers or touch­screen kiosks, could then access these details. This is part of the work in progress with EDS, described in response to recommendation 27, about harnessing technology more effectively. In the short term, ES have asked EDS to assess whether there is a simple and cost-effective way of enabling partner organisations to gain on­line access to the LMS vacancy information. That will be on condition that this "short-term fix" does not impede the introduction of the preferred long-term solution.

As indicated in the response to 27, from mid-November all vacancies notified to the ES (and an increasing number notified to private employment agencies) have been available on the ES website and will be an integral part of the Learning and Work Bank which will be publicly available in 2001.

This will be the most convenient way for partner organisations to access vacancies—and learning opportunities—available to ES.

30. We recommend that the Employment Service examine systems for identifying those at highest risk of long­term unemployment, and for targeting services more effectively to those individuals. We have already noted the problems inherent in a mechanical device such as the JSCI, and we believe that to maximise its effectiveness such a system should be dependent not only on rigid classification criteria, but on the acumen and experience of the ES's front­line staff. It should mix the assessment of objective criteria relating to individuals' labour market position with judgements about individuals' circumstances made by experienced ES staff, and by clients themselves. We also recommend that such an early identification mechanism be accompanied by an appeals system for those clients who feel that they have been misclassified.

A fair amount of research has been carried out into early identification (profiling) and intervention. The Policy Studies Institute were commissioned by the ES and the then Employment Department in 1994 to examine the feasibility of predicting long-term unemployment at the individual level. ES has subsequently carried out further work into the efficacy of profiling models, building on this work. The results have been disappointing. In particular, models have suffered from a high proportion of false positives—people predicted to experience long­term unemployment that in fact leave the register. Although the Government will take a close interest in further work, there is as yet no convincing evidence of a workable model. We therefore believe that the UK's system will be best served by maintaining continuous active job search by providing a job matching service to all those entering claimant unemployment.

Much research has been carried out into early identification (profiling) and intervention. The ES has conducted pilots to test how reliable a model could be produced. These pilots included an element of assessment by the ES's front line staff. Analysis of the pilots concluded that it had not been possible to establish a robust model. The models suffered from a high proportion of false positives—people predicted to experience long-term unemployment that in fact left the register. A subsequent literature search carried out for the ES by Warwick University in 1997 was more positive for producing a model in the future given a wide enough range of information about individuals. Such information would require a detailed assessment of client characteristics, attitudes and abilities not currently collected.

Ongoing analysis of survey evidence where this data was collected has not produced robust models, they continue to suffer from a high proportion of false positives. The Government will continue to take a close interest in any further work. In the New Deal programmes there is the flexibility for advisors to make assessments about an individuals labour market position and allow them to enter the programme early, on a voluntary basis.

31. Whatever changes are made to the organisation of the Employment Service, the nature of its partnerships with other organisations, its Annual Performance Agreement or its IT systems, its staff will continue to be its most important asset.

32. We welcome the ES's commitment to its staff set out in its Values, and we believe that the target for 60 per cent of its advisers to be undertaking S/NVQ level 3 is important in underpinning this commitment. We recommend that, if this target is met in 1998-99, the ES should seek to set a more stretching target for the following years.

The Government welcomes the Committee's recognition of the importance of ES's staff to its success. The ES strongly believes that it should live by its Values, and continues to work to that end, with further action planned this autumn following a staff conference on the Values in July. The Government also agrees with the Committee about the importance of high quality training for ES staff. The target for 1998/99 was for 60 per cent of ES Advisers to be undertaking S/NVQ in guidance by March 1999, as part of a strategy to ensure that every ES person has the skills and competencies required for the jobs they do. ES estimate that over 3,500 people had achieved the award, or were working towards it, by the end of March 1999, which suggests that the target was met. Further, more stretching, targets have already been set for March 2000, as indicated in the ES Operational Plan for 1999/00:

(i) 90 per cent of established ES New Deal personal advisers to have achieved, and 40 per cent of non­New Deal advisers to be working towards, Guidance Level 3; and

(ii) all Disability Employment Advisers to have achieved or to be working towards these qualifications.

ES is monitoring progress towards these targets carefully, so as to be able to take early action if progress is slower than envisaged. It has also begun to consider further targets for the period beyond April 2000.

ES has continued to develop its commitment to and investment in its staff. A major new programme of manager development begins 2001/02 working with an external partner. ES Values are now an integral part of our personnel systems including recruitment and appraisal. ES and BA have begun work to plan development of new values and human resource systems for the Working Age Agency. There is much work to manage the transition but a guiding principle will be to take forward best practices from ES and BA on staff management and development and continue to improve them in the new Agency. S/NVQ targets were again substantially met in 1999/00. In line with the Committee's recommendation, and the strategy of ensuring that every ES person has the skills and competencies required for the jobs they do, the target was for 2000/01 was further increased to: 95 per cent of established New Deal advisers to have achieved, and all other advisers to be working towards S/NVQ Guidance level 3.

As at July 2000 over 2400 ES advisers have achieved a Guidance award with a further 3350 working towards the qualifications.

The recent creation of a range of new adviser roles (e.g. Start Up Advisers, who do not have a caseload) has meant that in some instances the full Guidance award is not achievable. However, we are working closely with S/NVQ Awarding Bodies to develop "Cluster" Awards, which combine units from compatible S/NVQs e.g. Guidance and Customer Service. By doing this, we can ensure that all advisers can still be accredited with an appropriate nationally recognised qualification.

Additional Note from the Government:
The aim of the New Agency is to accelerate the move from a welfare system that primarily provides passive support, to one that provides active support to help people become more independent, based on work for those who can and security for those who cannot.

The New Agency will have a new culture, and will be firmly focused on helping people become independent, and further embed a culture of rights and responsibilities within the welfare system. The Agency will also help and support working age people who are out of the labour market for whatever reason. A single Agency will provide a better and more responsive benefits service to all people of working age, tailored to individual needs and will be in the front line of the drive to modernise Government.

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Prepared 27 February 2001