Examination of Witnesses
(Questions 275 - 299)|
TUESDAY 12 DECEMBER 2000
MP, MR BILL
275. Tessa, you are very welcome. You know we
have embarked on this brief incursion into recruiting unemployed
people, which I know is rather important for the Government's
agenda and for us too. I wonder whether, Tessa, you would like
to make a brief statement by way of introduction?
(Tessa Jowell) I have not come prepared
to deliver an introductory statement, Chairman. I am very happy
to answer any questions that you may have. I and, I know, the
Secretary of State see this as a very important inquiry and I
am quite sure, as with all your Committee's inquiries, you will
give us cause for thought and challenge us to do even better.
We hope you will not disappoint us this time.
276. We will try not to. Thank you. Clearly,
turning vacancies into jobs is rather important to society as
a whole as well as to the Government, and within that context
we want to explore how effective the Employment Service is and
some other agencies which the Government are trying to promote
or to innovate upon. I think our questioning will be along those
lines. If I may begin, we have done a number of reports, as you
know, on the Employment Service, and one of the things we said
to them in our recent report was, "Really you should be increasing
your market share." Do you agree the Employment Service should
be seeking to increase its overall share of the vacancy market?
Is that a sensible objective? Were we right to say that to them?
(Tessa Jowell) The short answer to that is yes, I
think the Employment Service should. As you will be aware the
Employment Service at present takes on estimate about a third
of all vacancies and those vacancies are typically and disproportionately
full-time vacancies. You may also be aware that this year we altered
the definition of a placing by, first of all, recognising a job
as involving working more than eight hours a week, and counting
as a hit against the target that the Employment Service works
to somebody actually turning up on the first day and starting
work. Those are two quite significant redefinitions which tighten
the job that the Employment Service has to do. But the present
market share in relation to vacancies is about a third. You will
also be well aware of the Employment Service's very particular
focus on more disadvantaged job seekers and I think that I would
like to take this opportunity to pay tribute to the Employment
Service for the way in which they achieve this. I think it is
unusual for a public agency, a public service, which deals disproportionately
with the most disadvantaged, to have avoided the stigma and other
baggage that many other such services which principally deal with
the disadvantaged carry, and I think it is an enormous tribute
to the Employment Service that they have not only avoided that
but they are also winning the confidence of a greater diversity
of employers who are seeking to place their vacancies with them.
If I just say one or two things, having made clear the ambition
to increase market share, about how I think it would be possible
to do that, I think the programme of what we describe as "modernisation
of the Employment Service" will be an important contributor
to that. ES Employer Directthe direct employer phone line;
the network of touch screens which will be available in job centres
in time replacing jobs boards; the fact we now have all our vacancies
on the internet; all these are innovations which will enable us
to process vacancies more quickly and we hope will make the placement
of vacancies with the Employment Service more attractive to employers.
I think there is, however, a second set of issues which is the
way in which the Employment Service engages with employers which
no doubt you will want me to talk about, but we see that as a
very high priority. We now have a performance target against which
the achievement of the Employment Service is judged in relation
to that and, just as I hope we can increase our share of vacancies,
I also hope that the Employment Service can become even more attractive
for higher level vacancies and increase its market share there.
277. Thank you very much. I must admit that
some of the things you have mentioned, which we wholly welcome,
which the Employment Service has brought in, when we came back
from Australia we enthused aboutcertainly their use of
ICT and modern means of communicationso we are very pleased
that the Employment Service has either taken our advice or we
have both been taking the same advice from somebody. Although
it must be said that both in Australia and in the United States,
the share of the public employment service of the market is very
much lower than our own, and we were really rather gratified to
find that. On this question of targets for market share, we put
to Leigh Lewis, would it not be good to have a target for market
share, and he resisted that because he thought there was a risk
that if there was a market share laid down in the annual contract
or by ministers this might distort some of the objectives of the
service, particularly from, what you have already mentioned, their
work with disadvantaged people. Do you share that view yourself?
If so, what proportion of the vacancy market is it appropriate
for the Employment Service to have if it is to deliver its objectives
for placing the unemployed? Is there an appropriate market share,
would you say?
(Tessa Jowell) To answer the first part of your question,
yes, I entirely agree with Leigh Lewis's view that we ought not
to introduce a new target for market share. The principal function
of the Employment Service is to get unemployed people into work
and there are all sorts of ways in which we could deflect the
focus of that effort, which, remember, has to be delivered through
a thousand job centres up and down the country. It is a complex
management task, to get alignment of effort day in, day out, to
the delivery of the very tough performance targets which we set
for the Service every year. It would be easy to create the sort
of diversion that might in turn begin to create the perverse incentive
that one might well be creaming. In other words, that you would
go for vacancies which were quick and easy to fill, as opposed
to those vacancies which can be filled by some of the hardest-to-help
in the labour market, thereby delivering our twin objectives of
expanding the size of the labour market and extending the opportunity
to work to those who are presently outside it.
278. Minister, whilst we are aware of the proposal
to create the Working Age Agency, in the context of the Employment
Service's work with employers, I wonder whether this will have
any major impact in terms of shifting the focus of the Employment
Service's work away from the employer side and more towards the
reduction in benefit side. Do you have any views on that?
(Tessa Jowell) I think quite the reverse. I think
the focus on the work with employers with the new Working Age
Agency will in fact intensify. The confidence in the new agency,
just as the level of confidence in the Employment Service at present,
really comes from two sources: the satisfaction of job seekers
and the confidence of employers. So the success of the Working
Age Agency will be in no small part judged by its success in building
the confidence of employers and being able to build on the success
that we have seen in a number of parts of the country, particularly
Sheffield in which I know you will be particularly interested,
where the Employment Service are at the moment handling I think
700 vacancies for Dixons. Dixons have effectively handed over
the recruitment for their new business to the Employment Service.
We have similar examples in the South West where Virgin are asking
the Employment Service to recruit all of their 400 call centre
operators. So these are measures of confidence on which we want
to build and I do not think anything in the plans for the Working
Age Agency suggests that will have a lower priority. One supplementary
point on that is the way in which this is underpinned. I am very
keen that the Employment Service as it moves into the Working
Age Agency develops a greater strategic capacity in relation to
its local labour market, moving beyond simply filling vacancies
to understanding, anticipating, vacancies and being able therefore
to match people at the time those vacancies need to be filled.
The Learning Skills Councils will have an important part to play
in that with the Employment Service but we are developing full
employment plans for every region and the greater strategic role
of the Employment Service will be an important part of developing
279. The work with the large organisations you
need to deal with, like Dixons in Sheffield, is very successful
and very well respected, I think, in the local area. The concern
will be that the Working Age Agency might have a negative impact
on that. You yourself referred to the fact that the Employment
Service has been very successful in avoiding stigma, the stigma
sometimes associated with organisations only working with disadvantaged
people, and so perhaps you might understand that there may be
a concern that by merging with the Benefits Agency, which I would
suggest does not quite have the same high level of reputation
amongst employers and people out there, there may be a levelling-down.
You are suggesting you hope the whole thing will level-up.
(Tessa Jowell) All the enormous development effort
which is being invested into the early planning of the new agency
is about ensuring that it is work-focused, because it is the central
point of contact for all claimants of working age. There will
be a major opportunity to build a different kind of culture. It
will be very important with the new agency that it is more than
simply the sum of its component parts. Job seekers are aspirational
and the new agency has to be aspirational for them too.
280. We have all been very struck with the culture
change which has taken place within the Employment Service, which
was not easily achieved. What we are embarking upon now is to
merge with another agency and we are looking for another culture
change for this new agency. Are you not rather under-estimating
the difficulties which will occur there and is there not the possibility,
as Richard has said, that the work focus that you speak of might
be severely diluted especially in the initial stages?
(Tessa Jowell) I can only reiterate our determination
to build an agency which is a work-focused agency. That is the
whole rationale behind it, that is how the agency will be judged.
That is the premise on which the planning is being developed.
As you know, the ONE pilots which we are now running in eight
parts of the country with four call centres are beginning to show
some very, very early lessons about culture change. You know when
you are in a ONE office that you are not in the Benefits Agency
office and you are not in a job centre, you are in somewhere which
is different which has its own distinctive culture. The protocols
are very strict and clear in order to bench-mark performance and
perhaps the most compelling thing of all about the early indications
from ONEand you will no doubt want to invite me back at
some time in the future to share the outcome of the evaluation
with youis that the ONE service is very popular with not
just job seekers because it is a single point of entry for claimants
and for job seekers and people like it. They like the personal
service, they like the personal adviser, they like the very disciplined
focus of both the start-up and the work focused interview. That
is very much the sort of approach that the project team are looking
at for the new agency.
281. That is for the job seekers and the claimants,
what about the employers, are they as happy? Are the early results
from ONE saying that the employers are happy? Hopefully they are
happier with ONE than they were with just the Employment Service
on its own.
(Tessa Jowell) There are no indications they are less
282. I wanted to move on to the whole question
of managerial and professional vacancies. You will know something
like seven per cent of the Employment Service vacancies are actually
in those fields, although the amount of people out there looking
for work in those categories is a great deal greater. I wonder
if you feel the Employment Service should be seen to increase
those vacancies which it attracts as a matter of priority. If
it is a priority, how might it be achieved? Might it be a question
of saying that one should, one way or another, reverse the decisions
taken in the 1980s to hive-off the PER? Can you talk to us about
that general area?
(Tessa Jowell) In my first answer I made clear our
wish to increase the share of vacancies and also to maintain the
diversity and the extent perhaps of the Employment Service's reach.
That means being seen as a service which is relevant to anybody
who is out of work and looking for a job. Yes, I would like to
see us increase the number of managerial vacancies. There are
a number of factors about people looking for managerial jobsthe
turnover tends to be much quicker, for instance, and there is
some evidence that people move on to new jobs without using the
sort of intermediate advice of an employment agencybut
we do see this as a gap in the provision of the Employment Service.
We are at the moment piloting in the South West the Employment
Service-Plus on-line offering comprehensive advice to job seekers
looking for managerial-type jobs in recognition of this. I wonder
if Hugh Tollyfield from the Employment Service would like to amplify
(Mr Tollyfield) Yes. All the evidence is that the
Employment Service-Plus on-line in the South West is taking off.
It is based in Bath and covers four surrounding counties. Also
there is evidence, and you might have picked this up from Australia
and the USA, that when you put vacancies on to the internet you
actually get an increase in the level of vacancies that comes
on board. This is one of the things we will be looking at, to
see if we get the same effect with our own internet-based vacancies
which Leigh Lewis told you about when he appeared before you.
Of course, we will also be bringing on board the private agency
vacancies onto the internet data base, which means that we have
the two together; we will have our own vacancies plus the high
level of managerial vacancies.
283. Is it really the internet side of things
which enables you to raise your profile? I say this not in a pejorative
way but there is a perception that the strength of the Employment
Service does not lie in recruiting in the managerial and professional
sector. That is not in itself a criticism, it might be no more
than a statement of fact. What is it in a sense you feel you lack
in not being able to offer these services? Or is it that in a
modern age you feel you really are out there competing against
the private agencies which offer the full service?
(Mr Tollyfield) Again I think I would go back to what
Leigh Lewis said to you, in that we do not see ourselves competing
with private agencies but see ourselves working in collaboration
or partnership with private agencies. So in developing our internet
service we welcome the opportunity to work with the Recruitment
and Employment Confederation and to bring their vacancies into
our data base, not on a competitive basis, but it opens up our
vacancies to them and their vacancies to us. We feel that is a
more satisfactory way, if you like, of ensuring our job seekers
get better access to what is available in the labour market.
Mr Pearson: Was it not a political blunder for
the Conservative Government to privatise PER in 1988 and did that
not create massive problems when we had the recession in the early
1990s? Have they not let down a generation of 45 to 60 year old
Mr Nicholls: If so, will you therefore reverse
it? Indeed, why have you not done so already?
Mr Pearson: You were involved in it anyway!
Mr Nicholls: I know but I am not asking the
284. We are involved in a question and answer
session not a debate. Tessa, have you got an answer?
(Tessa Jowell) Yes, yes, and we will see!
285. A terribly controversial reply, if I may
(Tessa Jowell) Exactly. I think there are two things.
First of all, I have made clear our wish to ensure that the Employment
Service is a service with a wide reach across a wide range of
vacancies but never losing its distinctive role in helping the
most disadvantaged job seekers to find work. Secondly, on the
point about privatisation, the Employment Serviceand the
new Working Age Agencyis a public service agency and there
is a very important role for the public sector in job search and
job matching. There is, however, plenty of opportunity for partnership
with the private sector so I think we have probably moved on from
the agenda of the early 1980s, which was more ideological in looking
at the boundary between the private sector and the public sector,
to one where we would like to build on productive partnerships
which help us to get the more disadvantaged people into work and
stay in work.
286. Can I move on to the on-line services which
have already been mentioned? When we interviewed Leigh Lewis a
fortnight ago, I explained to him that I had problems with accessing
their service and it took me one hour and 43 minutes, I think,
to get some fairly rudimentary information on a vacancy. I have
tried since and there are still problems with the on-line service.
It is not to my mind at all user-friendly. What mechanisms have
you got in place to ensure this new service is constantly re-evaluated
and is as user-friendly as possible?
(Tessa Jowell) I think the first point, which is one
really of clarification, is to say that what will be in job centres
will be touch screens, so job seekers coming into job centres
will not be expected to navigate the internet. I looked at the
site last week and got on to it actually fairly easily but I am
very happy to receive complaints about difficulty of access and
regard it as the kind of useful consumer feed-back that we need
to have at what is a fairly early pilot stage. Let me just make
two further points on that. I think that some people will come
into job centres and feel alarmed by the technology, because people
always are if they are unfamiliar with it, but there will be help
in order for them to use the touch screens. I hope that before
long, using a combination of touch screen technology and the internet,
the idea that looking for a job as something you do between 9
and 5 will be a thing of the past, that people will be able to
look at vacancies while they are in the pub or before they go
to see a movie or whatever it may be. The second thing, of course,
is that many of the people who come into job centres will have
a range of skill gaps which are obstacles to their work readiness,
and the guided utilisation of technology as part of using the
services at the job centre will be one way of shedding the demon
of technology which a lot of people feel. But, obviously, we are
going to monitor this very closely indeed and I am serious in
saying that if you have feed-back about the difficulty of using
the site, we would like to know about it, but I did not have a
huge amount of difficulty, although I did have somebody helping
me, so I had better own up!
287. Thank you very much. Maybe I will get back
to you on that.
(Tessa Jowell) Or get somebody to help you.
288. Can I raise the question of the efficiency
of the Employment Service in filling the vacancies it handles?
There is some evidence which suggests that around a third of the
vacancies which it handles are filled. The Employment Service
itself was suggesting to us that just over 50 per cent is a more
accurate figure. Some private sector agencies achieve figures
above 80 per cent, although there are perhaps reasons for that.
Either way, it means the Employment Service is not necessarily
as efficient at filling vacancies as it could be. Do you think
this could be improved and, if so, what action are you taking
to achieve this?
(Tessa Jowell) First of all, I know that you went
through quite a lot of this with Leigh Lewis and Peter Shaw. The
Employment Service does fill half its vacancies within two weeks.
The analogy with private employment agencies is not really comparing
like with like. I think it is as much as 80 per cent, maybe slightly
higher, of the vacancies which are notified to private agencies
are temporary jobs, whereas only about a quarter of the vacancies
notified to the Employment Service are temporary jobs, so clearly
there is an important difference there. Filling half the vacancies
within two weeks is I think by general consensus, and certainly
the feedback we get from employers confirms it, a satisfactory
rate at which to fill vacancies. What perhaps concerns me more
and what we are mapping quite carefully is where you get structural
vacancies and jobs that simply do not seem to move. There are
30,000 vacancies at the moment in London in the catering industry,
for instance, and when you have vacancies at that sort of level
they are not all Employment Service vacancies. In labour market
terms those are the numbers of vacancies. When you have that kind
of vacancy level you potentially have a constraint on the efficiency
and growth of the sector. I do not, in the list of things I am
concerned about, rate the speed at which the Employment Service
fills vacancies as a matter of concern and nor do the employers
we are working with.
289. Can I follow up the point you made about
the number of vacancies from private agencies being temporary
vacancies? Some of the private agencies who have contacted me
have expressed some strong concerns about the Government proposals
to abolish the fee that they might charge for temp-to-perm contracts
and they say that this will make it far more difficult to recruit
and employ people and they have given a number of case studies
of people who have been taken on on a temporary basis and they
have got very good jobs afterwards. Obviously we are under pressure
to reply to them. What is the Government's view and what is the
justification for this?
(Tessa Jowell) This is, with great respect, a matter
which is being handled by DTI Ministers. If I can deal with an
issue which is related to that which underlines the sensitivity
of the private employment sector but also the importance of working
together, what distinguishes the Employment Service from them
is that they charge a fee, they earn their living by charging
a fee. The Employment Service is a free service. There were proposals
that the Employment Service might increase its work in helping
to recruit or organise the recruitment of temporary staff for
parental leave and maternity cover. That may be part of the point
that is being raised with you. In fact, we have had a very successful
collaboration with the private employment companies which has
produced a jointly promoted set of guidance on how to manage temporary
vacancies. That is at the moment out for consultation around the
country. There is plenty of scope for collaboration. The point
about a temporary to permanent fee is a matter which is being
handled by the DTI.
290. I understand that the matter is being handled
by the DTI but I am sure DfEE must have a view on this because
if, as is claimed by these organisations, it will have an adverse
impact on the recruiting of unemployed people, then it is surely
legitimately a responsibility of your Department to make representations
to the DTI on the issue? I suppose what I am probing is, has there
been a DfEE view on the abolition of this fee and is it making
representations to the DTI?
(Tessa Jowell) I go back to what I was saying earlier,
which is that the private employment agencies and the Employment
Service are to a great extent dealing with different sectors of
the labour market and the private employment agencies are dealing
with a considerably larger proportion of temporary vacancies.
We would obviously be concerned if there was any obstacle placed
in the way of getting unemployed people back into work. That is
our bottom line and that is the test that we would apply to any
change in the regulations that govern private employment agencies.
291. I was reading recently a Policy Action
Team on jobs report and I understand that 40 Employment Service
action teams have recently been established. I assume that that
has got something to do with responding to the issues of the Policy
Action Team on jobs report. I was wondering if you could say in
what ways are the new Employment Service action teams addressing
issues such as discrimination on grounds of postcode, length of
unemployment and ethnic minority background because these are
some areas where there is certainly a lot of evidence that employers
are saying, "We do not want to recruit from certain postcode
areas, we do not want to recruit people with certain backgrounds".
Presumably this is something that the action teams are directly
(Tessa Jowell) Yes, it is. What the action teams are
doingand they are very much the evidence of implementation
on the recommendations of the Policy Action Team for jobsis
working in the areas where the employment rates are lowest in
the country and identifying the obstacles to people who live in
those areas getting into work. In some cases that clearly means
working with the New Deal and the specialist labour market programmes
that are already operational, but in areas like that it means
they will be moving beyond that, picking up some of the issues
that you raised in one of your earlier inquiries to which I gave
evidence, on the issues of jobs and demand, looking at the indices
of mobility, looking at this paradox that people may be living
a bus ride away from an area where the employment rate is 15 or
20 per cent higher than their own. The second point in relation
to ethnic minorities is that one of the performance measures for
the New Deal for young people is achieving parity of outcome for
ethnic minorities and we are as yet some way from achieving that
target but we are determined that the New Deal will deliver equal
outcomes for ethnic minorities and white job seekers. As many
as 30 out of the 40 action teams for jobs have as one of their
top line objectives increasing job entries for people from ethnic
minorities in order that we can address both the structural and
the more circumstantial obstacles that people face, taking together
employer discrimination, postcode discrimination, lack of skill,
disconnection from the labour market, lack of networks, all the
factors which, when you combine them, create disproportionate
labour market disadvantage.
292. Can I very briefly pursue the previous
point that Ian raised? I too have had the same correspondence
about the new regulations that the DTI are bringing in regarding
private recruitment agencies and I have carried out a long correspondence
with the Minister. Latterly I have written to the Secretary of
State for Education and Employment saying, is there not a conflict
of view between the two Departments here, or should there not
be a conflict of view if what the private recruitment agencies
allege, that the people who will be deprived of jobs under these
new regulations will be the disadvantaged? Surely the Department
of Education and Employment ought to be taking an interest in
this and perhaps he would give me his view. I am not putting you
on the spot now but just registering with the Department that
they will be expected to address that issue pretty soon.
(Tessa Jowell) We would obviously monitor with interest
the labour market impact.
293. Can I take us back to the issue of equal
treatment for ethnic minorities? You mentioned conversations we
have had before in this Committee relating specifically to the
New Deal for young people. As I understand it we are now seeing
local data published to show progress on achieving the parity
of outcome for people regardless of ethnic background which you
referred to just now. Would it be possible for this to be extended
to the other areas of work of the Employment Service, not simply
the New Deal for young people but all the different schemes and
activities so that we have similar data publication?
(Tessa Jowell) Can I be clear about the sort of data
that you would be looking for?
294. Data that indicates progress in terms of
eliminating some of the inequalities that you referred to just
now and that our previous reports have identified specifically
in the New Deal.
(Tessa Jowell) The Employment Service already conducts
systematic ethnic monitoring of the profile of job seekers.
295. Right the way across the board? That is
conducted across the board, not only relating to the New Deal
(Tessa Jowell) Yes.
(Mr Tollyfield) It is for all people who make claims
to jobseeker's allowance. We register at that stage their ethnic
background and we are introducing it also for our other clients
who are not JSA clients.
296. Is that then followed right through to
(Mr Tollyfield) It will be but you have to build up
a body of information, that is the problem. It will take time.
297. So at the moment that sort of information
is not available on job outcome but it will be available further
down the line?
(Mr Tollyfield) I would need to check on that, to
be honest, but I believe so.
(Tessa Jowell) What we do know is that while there
is a discrepancy between job outcomes for ethnic minorities on
the New Deal, young people on the New Deal from ethnic minorities
do better than they do in the labour market as a whole. That is
the first point. The second point, which is I think a positive
one, is the Employment Service's success in recruiting personal
advisers from those areas where there are large ethnic communities.
298. Do we have the same problem with the turnover
of personal advisers, let us say, in the London experience as
compared to the rest of the country?
(Tessa Jowell) We are still concerned about turnover
(Mr Tollyfield) We obviously are concerned at rates
of turnover but also you recall Leigh Lewis said to you that there
is a sense in which the very turnover is a mark of our success
because people who have skills developed in the Employment Service
are in fact in demand in the labour market and so it is in some
senses a backhanded compliment to us that our staff are sought
299. I think Leigh should apply for the vacancy
for the Number Ten spin doctor if it ever occurs with an argument
like that. I accept it partly. Chris Humphries, Director General
of the British Chambers of Commerce, told us that there was concern
amongst employers that the Employment Service was not very good
in understanding their needs. Is this a fair assessment, would
(Tessa Jowell) I do not think so, no. It is certainly
not the feedback that we get from employers where the indication
is of high levels of satisfaction. I think that the Employment
Service has developed a more structured and systematic approach
to measuring satisfaction. There is now a contract with employers
in four parts, two of which include a commitment to providing
a named contact and also to providing follow up to help people
settle in during the first few weeks of employment. That is important.
The Employment Service is very close to reaching its satisfaction
target of 80 per cent, which is what has been set in this year's
APA. We can always do better and I thought with great candour
the Employment Service in their memorandum to you provided two
examples of the reaction of employers: what happens when an employer
thinks that they have had a good service and what happens when
an employer thinks that they have not had a good service. Of course
there will be employers who are not satisfied and we need to do
better for them. I hope that you accept from everything you have
heard so far from me today and from Leigh you could not be in
any doubt about the importance that we attach to building the
Employment Service on the basis of what employers need and ensuring
that as far as possible we get to a point where we may get somebody
coming through that door from the job centre and they can be pretty
confident about the level of skill and the quality of the screening
that that person will have gone through before they come to them.
1 The memorandum submitted by the Department for Education
and Employment is printed in HC533-vi, Session 1999-2000, pp.1-97. Back