Select Committee on Education and Employment Fifth Report


1.We welcome the Government's acceptance and implementation of our earlier recommendation that evaluation reports and summaries should be published in the New Deal Website but stress the need to ensure that the web site is comprehensive and kept up-to-date (paragraph 14).
2.We accept that the overall target for New Deal is not to make participants job ready but to help them into sustained employment. The evaluation programme also needs to take into account improvements in employability which result from participation in the programme but which may not result in employment in the short term (paragraph 17).
3.We have noted in an earlier Report that assessing the cost per job is a complex area and one which merits independent analysis. We welcome the National Institute of Economic and Social Research's Reports on macroeconomic implications of NDYP and look forward to the results of the National Audit Office's forthcoming value for money study. Over-emphasis on the assessment of NDYP on a basis of cost per job obscures the wider purpose of New Deal (paragraph 20).
4.We recommend that the Government should monitor closely the impact of New Deal on wage pressures (paragraph 29).
5.We recommend that the Government should monitor closely the extent to which cost per client increases as NDYP evolves and those with multiple barriers to employment become an increasingly large proportion of the total number of NDYP clients (paragraph 32).
6.We recommend that the Government should continue to monitor substitution under NDYP closely (paragraph 35).
7.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 for them. 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 (paragraph 40).
8.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 (paragraph 41).
9.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 (paragraph 42).
10.We welcome the range of additional measures that have been introduced to help personal advisers identify those NDYP participants with inadequate basic skills and to help participants reach higher standards of numeracy and literacy. The drive towards increasing the basic skills levels of job seekers will become more important as the hardest to help become an increasingly large proportion of the New Deal client group (paragraph 44).
11.The development of basic skills is important, but it should be matched by a recognition of the diversity of the New Deal client base and the need to develop higher skills which may be required for job retention and career progression (paragraph 45).
12.We welcome the introduction of the post of Senior Adviser, which should help the Employment Service to retain its best staff, train its junior personal advisers and minimise the effect of promotion on the relationships between personal advisers and their clients. The impact of Senior Advisers in these areas should be closely monitored and other measures to increase continuity should be brought forward if required (paragraph 48).
13.We believe that the model of general medical practitioners for personal advisers is a valuable one. We recommend that the Government should consider developing the role of personal advisers on this basis (paragraph 49).
14.We welcome the Employment Service's determination to adopt an account management approach to its relationships with employers. This is consistent with an earlier recommendation we made that the Employment Service should continue its development into a demand-led service and strengthen the service it provides to employers. We accept, as does the Employment Service, that it has not yet achieved its potential in terms of relations with employers (paragraph 50).
15.We recommend that the Government should thoroughly examine the impact of mandatory referrals on both the motivation and subsequent success of participants, and on the effectiveness of the options themselves (paragraph 53).
16.Although the benefit sanction is infrequently applied, it must be recognised as an important factor in encouraging unemployed people back into the employment market. We recommend that the Government should monitor closely the frequency with which sanctions are imposed and examine the consequences of the threat of sanctions (paragraph 54).
17.We recommend that the Government should examine the reasons for the regional variation in the frequency of sanction imposition and should ensure that sanction criteria are applied uniformly by the Employment Service (paragraph 55).
18.The Government should ensure that there is not a single further instance income support sanctions affecting the receipt of housing benefit. Being made homeless is too strong a sanction for non-participation in New Deal (paragraph 56).
19.While we acknowledge the commitment of the DfEE and the Employment Service to the recruitment of New Deal candidates, we remain extremely disappointed that other Government Departments and agencies have remained so apparently unwilling to recruit New Deal candidates, despite the efforts of the DfEE to encourage them to do so. We recommend that the DfEE should bring forward proposals indicating how the Government intends to reach the two per cent target across the Civil Service (paragraph 58).
20.There is a strong case for increasing the spread of best practice in the provision of the FTET option (paragraph 59).
21.We recommend that greater flexibility should be permitted with the FTET option, to allow colleges to tailor courses and learning programmes to individual student needs (paragraph 60).
22.We welcome the Government's decision to increase the funding limits for FE colleges in respect of New Deal provision. We recommend that consideration should be given to funding New Deal participants on a par with those FE students supported by the Learning and Skills Council (paragraph 61).
23.We have previously called for the greater use of intermediate labour markets within the provision of the ETF in particular. We welcome the Government's commitment to achieving this. We also welcome the fact that, following the last contracting round, a proportion of the payments to providers will be dependent on ETF participants gaining employment. The impact of this measure on participants' job retention should be closely monitored and the concept should be extended if it proves successful (paragraph 62).
24.We welcome the Government's and the Employment Service's efforts to determine the profile of destinations of those who are recorded as leaving for unknown destinations (paragraph 64).
25.We welcome the Government's intention to improve the effectiveness of the follow-through period. We recommend that this aspect of NDYP reform should be undertaken with some urgency (paragraph 66).
26.NDYP should become flexible enough to be able to respond to the needs of a diverse client group (paragraph 72).
27.Voluntary sector organisations should not be required to subsidise New Deal in order to make it effective. Referral of NDYP clients from the Employment Service to voluntary sector organisations should always be followed by adequate funding (paragraph 73).
28.We recommend that the future development of NDYP should take account of the fact that those who are hardest to help will form an increasingly large proportion of the programme's client group. In Local and Regional Economic Development: Renegotiating Power under Labour, Professor Robert Bennett and Dr Diane Payne argue that a high proportion of the 43 per cent of young people and the 67 per cent of 25 year olds and over who leave the Gateway without informing the Employment Service are the longest-term unemployed, indicating the challenge for New Deal. The Employment Service will need to pay increasing attention to this group of clients. It should seek to identify quickly the particular barriers which a participant faces and make appropriate referrals to specialist organisations, many of which will be in the voluntary sector. The Employment Service should build its capacity to recognise difficulties and make appropriate referrals and its capacity to collaborate with external organisations. It is not acceptable for young unemployed people in the NDYP client group to be overlooked (paragraph 74).
29.The Minister said that the next phase of New Deal would put an emphasis on reaching out to those who are currently economically inactive. We welcome this and look forward to the Government bringing appropriate proposals forward (paragraph 75).

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