Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 20 - 39)



  20. I am glad to hear you say that, but your main justification seemed to be in answer to the Chairman not that there was a straightforward payback for the economy, which interpretation of these figures in terms of how worthwhile that has been to the economy might be slightly confusing, but let us leave that on one side for the moment. Your answer to the Chairman a few moments ago appeared to be that it was not just a question of how many jobs you created, it was also a question of the other objectives you were looking at, including long-term employability. Is that correct?
  (Ms Lomax) Let us take this head-on. All employment programmes are open to the criticism you and the Chairman have just mentioned; all of them. It is very difficult to say that every extra person who goes into a job would not have gone into a job otherwise. What the New Deal for Young People has done is got people into work, even on the evaluation evidence we have here, more successfully than most previous programmes, or most programmes in other countries, even on that narrow definition of success.

  21. If I may say so, you are moving a bit away from the point I was trying to get to, which was this question of improving employability. As I understand it, that was what you were saying to the Chairman just now was one of the major reasons why you felt, whether it is a waste of money or not, the issue was not purely about how many jobs you had created or how many people you had removed from unemployment, the issue was also about improving long-term employability.
  (Ms Lomax) Yes; it is indeed. I wanted to challenge your summary of my reply to the Chairman which implied that I was accepting that the scheme was a waste of money and I most definitely do not.

  22. You have challenged it very well but I do not want to stick on that. I want to get onto employability.
  (Ms Lomax) Let there be no misunderstanding.

  23. The point here is that if it is true that the question of improving employability is an important aspect of the whole scheme, then I want to ask you why in that case you have apparently no measure for measuring whether that has worked or not.
  (Ms Lomax) It is quite difficult just to capture employability in a target.

  24. Is it a sensible way then of justifying the scheme if you cannot know really whether it has worked or not?
  (Ms Lomax) You can capture the impact of a scheme by evaluating, as we have done, with specific evaluation studies. For example, I think it was the Policy Studies Institute (PSI) which did an evaluation looking precisely at the employability issue and concluded that on a number of different dimensions you could safely conclude that the New Deal for Young People was improving employability in terms of whether people were progressing in jobs, getting more pay, getting more responsibility, retaining jobs longer—

  25. Were they able to quantify that?
  (Ms Lomax)—and they quantified that.

  26. So why was no target set? If you can quantify it, you might as well set a target and see whether you have achieved the target.
  (Ms Lomax) Because we cannot trace everybody in their post-New Deal work record. What we have tried to capture is retention in terms of the people who come back onto JSA and that has been reflected in Employment Service targets and Ministers are going to be announcing the Jobcentre Plus targets next week and we shall be trying to capture a bit more of some of these ideas in the targets we set for Jobcentre Plus. It is a moving target. We are trying to develop our ability to capture it. We are learning how to do this as we go along and we also need to improve our ability to track people once they move into work. That is why in the Employment Bill at the moment, which is before the House of Lords, we are taking powers to enable us to join up the Employment Service records with Inland Revenue records so that we can track what happens to people once they enter work. That is exactly so we can begin to get some meaningful measures of employability.

  27. You seemed to say just now that one of the things people have been looking at is the question of whether, once they go into jobs, people's salaries then increase and this is a measure of employability. People have been measuring that and you appear to think that some of the work you are doing therefore has been worthwhile. I am not trying to deny that for a moment. What I am suggesting is that if this was always possible and people have been doing it, why, when you set up the scheme, did you not set a target that was measurable—okay you cannot track them all—in terms of a percentage of those you can track whose salaries increased over the year when they went into a job, or whatever?
  (Mr Lewis) May I say something pretty fundamental on this about what target setting is about within any major organisation or business? One sets targets for things which the organisation itself can directly and clearly change and make happen, because that is the motivation, that you want to ensure things happen within the organisation. There are many things you measure and you want to happen, but which you do not believe you can directly impact day by day. To give an example of that, we know from very extensive evaluation, just to put a few numbers on what Ms Lomax was saying, that 75 per cent of those leaving the New Deal for jobs have received a pay rise within six months, we know that 40 per cent have gained more responsibility within their jobs within six months. We know, and it is the acid test for me, that 90 per cent of option participants themselves identified employability benefits. It is hard to say to an individual member of staff in the Employment Service that their target is to ensure that somebody receives a pay rise within X months, because they cannot directly impact on that. That is the difference between on the one hand setting targets where you can have a direct and clear impact, helping to place someone into a job, and measuring outcomes which also matter to you.
  (Ms Lomax) What we can do is incentivise the agency to put people into sustained jobs, into quality jobs and that is what the retention targets were about.

  28. I find this one a bit hard to take. It does seem to me that if you are going to set an objective for your organisation with no measurable target at all and then say you can measure all sorts of things but you have not actually said how much you want these things to increase in order to improve, you have met that objective, I would have thought that was a fairly feeble way of monitoring what you are doing.
  (Ms Lomax) No. May I have another go at this because it is quite a fundamental point.

  29. It is a very fundamental point and I am rather worried about the reply.
  (Ms Lomax) Let us go back. You can set outcomes for objectives and outcomes for programmes which are ambitious and long-term and go beyond those things you can immediately control. Employability is a very long-term concept. It is relevant, it is very important for employment programmes but it would be quite wrong to pretend that it was easily measured or was something under our immediate control. As Mr Lewis said, what you do by way of target setting for an operational business is try to focus their attention on things they can impact. It is supposed to motivate them and focus their efforts. I really think that there is a distinction between the outcomes you are seeking to influence and operational targets which you are setting to try to focus business efforts. The two are not the same.

  30. I have to say that setting objectives and having no way of measuring whether you are meeting them or not is an unfortunate way of managing a business.
  (Ms Lomax) I would contest that we have no means of measuring whether we are having any impact on employability.

  31. But if you do have a method of measuring it, why do you not set targets to measure against?
  (Ms Lomax) Because setting targets and evaluating the impact of the programme are two separate things. That is the argument I am trying to make at the moment. We have an evaluation strategy which tends to look at quantitative evidence, long-term evidence, things which are difficult to quantify and which might be out there in the world. That is why we have a complex evaluation strategy. It is to get at the many dimensions of the things we are attempting to influence over a period of time. Targets are about trying to focus the efforts of the operational business in a way which will be supportive of getting performance, which will help contribute towards this. Any operational business which has woolly targets, complex targets, excessively bureaucratic targets, is not going to perform well.

  32. You do not have any targets; that is the point.
  (Ms Lomax) That is not true.

  33. It is not a woolly target, you do not have any targets.
  (Ms Lomax) The Employment Service has a large number of targets—

  34. But not for this programme.
  (Ms Lomax)—and some of them are related to things which we think they can control which are relevant to employability. That is why I mentioned retention. It is an important point.
  (Mr Lewis) If you were, as the NAO did, to go out and speak to Employment Service staff, personal advisers and other staff who worked on this programme and have been proud to do so for the last five years, they would certainly say that they have known and been very clear from the very first day that they had very clear targets to achieve. Those targets, in terms of employability, were fundamentally about helping a very significant number of young people coming through that programme into jobs and that is the fundamental starting point. You cannot develop your employability, if you do not first go into a job. We have measured many, many other things and made very clear that we attach great importance to them.

  35. Actually the measure should not perhaps have been just how many people went into jobs, but how many people went into jobs who would not otherwise have and Ms Lomax said that was very, very difficult to measure. So the one measurable target you set yourselves everyone knows you cannot really use terribly well to monitor the effectiveness of the programme and the others do not have targets at all. That is what worries me about the whole thing.
  (Ms Lomax) No, that is not true; that is just not true.

  36. Could I turn you to page 9 and Figure 4 where it looks as though the overall reduction in number of young claimants is very well worthwhile and I do not deny that for a moment, but it looks rather as though the reduction is almost entirely in terms of the over-six-months unemployed. I can understand very good reasons for wanting the long-term unemployed number to come down as quickly as possible. I just wonder whether you could comment at all on the fact that since the reduction is almost entirely in terms of the long-term unemployed, whether that is to some extent at least at the expense of the short-term unemployed, those who are more likely to get jobs anyway.
  (Mr Wells) It is true that some people, when they leave the Options, or leave a job, will come back into short-term unemployment. However, the rate at which they are leaving short-term unemployment has also improved over this period.

  37. But the number of short-term unemployed has not gone down. The dark blue lines on the graph are almost exactly the same.
  (Mr Wells) It is partly an optical illusion; they have actually gone down. The rate at which people are coming back on who are leaving the count has improved for the short-term unemployed as well as the long-term unemployed. There was an increase of short-term unemployed as people came round again, but it was nowhere near as big as the reduction in long-term unemployment and the net effect of both of those figures was a substantial reduction in overall youth unemployment and the evaluation evidence suggested that a substantial part of that was due to the New Deal.

Mr Gibb

  38. Chairman, I should like to beg your patience for 30 seconds while I say thank you to Ms Lomax for the figures I received this morning on income support and Jobseeker's Allowance fraud. You very helpfully split the figures between fraud and customer error: 290,000 cases of fraud and 316,000 cases of customer error in those two benefits. I was baffled by the answer I received from the Minister yesterday morning when he said that these figures could not be split because to do so would involve excessive cost because he would have to go through every case individually to see whether it was fraud or customer error; he said the split could not be made. Is the Minister's answer correct? In which case are the figures you have given me correct?
  (Ms Lomax) Yes, they are. Would you like me to write about it or does the Committee want to hear this answer.

  39. Yes, write, as it is not relevant to this hearing.
  (Ms Lomax) I have looked at this. I will write to you to explain how they marry up.

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