36. That young job seekers should move into
sustained employment was a key part of the Government's
aim for New Deal for Young People (see para 17). The Government
(as did the previous Government) defines sustained employment
as that which lasts 13 weeks or more. Figures up to November 2000
show that 40 per cent of all those who leave NDYP have entered
sustained, unsubsidised jobs.
To the end of November last year, 269,210 young people had entered
employment on leaving New Deal. Of these, 206,530 young people
had entered sustained employment (87 per cent of which was unsubsidised).
This still leaves a sizeable minoritysome 22 per centof
participants who have found a job through New Deal but have not
obtained sustained employment. Taking into account the fact that
many of those on New Deal may experience more than one job start
before finding sustained employment (for instance a period on
the employment option followed by an unsubsidised job is a common
experience) the number of sustained jobs that had been gained
through New Deal rises to 221,680 but the number of short spells
of unemployment rises sharply to 149,490. On this basis, around
40 per cent of all placings into work through NDYP are unsustained.
37. The Unemployment Unit and Youth Aid has repeated
expressed its concern at the high level of short-term and insecure
Mr Paul Convery, the Director of the Unemployment Unit and Youth
Aid, told the Sub-committee that he was "alarmed by the fact
that some 40 per cent of placings into work through New Deal have
not become sustained jobs".
Mr Victor Adebowale, the Chief Executive of Centrepoint, agreed.
Several witnesses argued that the targets set for New Deal were
a contributory factor in the high level of unsustained placements.
For example, the Public and Commercial Services Union explained
that by putting too much emphasis on any job outcome, rather than
on starting clients on the right career path for them, the targets
(in particular Core Performance Measure A)
resulted in a higher level of unsustained placements.
38. The Greater Manchester Low Pay Unit argued that
"a constant moving in and out of employment means that young
people will quickly become disillusioned with the programme and
view it as a 'revolving door' rather than an opportunity to secure
a job. Arguably constantly moving in and out of short-term employment
will also demoralise and reduce the confidence of young people
as they question their ability to find secure employment".
We stated our concern over the relatively high level of moves
into unsustained employment when we reported on New Deal: Two
39. Mr Leigh Lewis, Chief Executive of the Employment
Service, told the Sub-committee during an earlier inquiry that
he did not believe that sustained employment should be the only
goal for NDYP participants. He told the Sub-committee that "if
you end up at absolutely one end of the spectrum rather than the
other, you are probably defeating your overall objectives".
Similarly the Minister drew the Sub-committee's attention to evidence
that indicates that those young people who undertake a short spell
of employment are more likely to find sustained employment in
the long term.
The Government said that for those "young people whose job
is not sustained, the experience may still transform their confidence,
their ability to work and their prospects of getting another job
with recent work experience to show to their next employers ...
The Government's view is, therefore, that jobs that are not sustained
are still of value to the young person. The point of New Deal
is that it increases a young person's employability".
40. We agree that there is benefit in providing
young people with short-term work experience. Nevertheless, we
remain concerned that the proportion of moves into unsustained
employment remains as high as 40 per cent. As the Minister has
told us on more than one occasion, young people on New Deal are
ambitious and aspirational and that New Deal must be aspirational
Those aspirations will not be met by a cycle of continual short-term
employment in entry level jobs, registered unemployment and participation
in New Deal.
41. The Minister told us that the Government was
placing "increasing importance on retention and people not
just getting into a job but staying in work".
We note that the Employment Service (ES) is piloting retention
targets in some areas and that job sustainability is now a condition
of payment for some New Deal providers. The Sub-committee have
questioned the use of 13 weeks as the definition of sustained
employment. While we accept that it is standard definition used
by this Government and the last, we have sympathy with those who
argue that 26 weeks would be a better definition. After six months
in employment, new opportunities such as access to training and
eligibility for promotion, are available.
Under the New Deal Innovation Fund 26 weeks is used as the definition
of sustained employment in some pilot programmes. We welcome
the increasing emphasis on helping young people into sustainable
employment. Job retention and career progression should be built
into future measures of achievement for New Deal.
42. Definitive data on the number of NDYP participants
who gain employment and who are still in employment after 26 weeks
are not available, although the Minister estimated that around
75 per cent were still in employment after three months. She also
told the Sub-committee that 80 per cent had not returned to benefits
after 26 weeks.
We recommend that the Government should collect information
on the length of employment retention to inform the development
of policy aimed at increasing employment retention.