Select Committee on Work and Pensions Minutes of Evidence


Examination of Witnesses (Questions 140-158)

MR TONY HAWKHEAD, MR GRAHAM PARRY, MR IAN CHARLESWORTH, MR IAN REEVES AND MS DEBBIE SCOTT

WEDNESDAY 8 MAY 2002

  140. It is always very easy to criticise other people who are involved in partnerships or collaborative working. How do you see your role developing, especially in local partnership working?
  (Mr Hawkhead) Groundwork is fundamentally premised on the basis that we are a bottom-up organisation based on what we regard as a true local partnership rather than local collaboration. We cannot deliver without that local partnership. We find generally that people are very committed to working with that, if there is a common aim and over 20 years it has worked for us. We are all for it.
  (Ms Scott) Do you think Jobcentre Plus is doing everything it can to support you in that?
  (Mr Hawkhead) It is worth remembering that Jobcentre Plus operates very much at an area level only slightly with partnerships. It is involved in some local partnerships but its key job is to work in bilateral relationships with people like us to provide services to the unemployed.
  (Mr Parry) The relationship is different between district and regional level. At district level I feel we have good strong collaborative links with Jobcentre Plus. At regional level it is somewhat different because it would be very difficult for Jobcentre Plus to enter into a partnership. The contracts are delivered through tender. It is very much a tendering process and it is probably difficult to run through a partnership.
  (Mr Charlesworth) That is one of the advantages that Groundwork and Shaw Trust have in that we genuinely believe in partnership and are not bedevilled by having to have an antagonistic contractor/client relationship that seems to bedevil a lot of the public sector. I have a background in local government contracting and I know what it did there. It certainly seems to bedevil much of the relationship with Jobcentre Plus. They find it difficult to work in partnership. In my view they understand the contracting relationship and are happy to hide behind it. They need to develop more true partnerships if they are going to be effective in the future.

  141. Ian Reeves, how do you see your role in getting together the local partnerships?
  (Mr Reeves) Despite the point I tried to make about definition, we do work very well in collaboration and we are very good in partnership. We are very clear about when we are sharing risk and reward and when we are there to add value in a co-operative sense to a shared aim. I am not knocking either. I am just saying they are two very different things. In Getting London Working we lead ten parties. We are very much behind the Employment Bond, which was first launched in Sheffield, then in Newcastle. We have financed and helped launch the City and East London Bond where we are seeking to raise £50 million to help in the regeneration in East London. We are very much a partner there. We are putting money on the table, management on the table, total ideas, access to the business world, which they did not have and marketing committees. We have put enormous resource behind it as a partner. We have demonstrated this—time does not permit to list all of them—across the country. Our network of patrons is another matter. We have people distinguished in public life and in business as patrons regionally throughout this country for us who are there actively helping us to come together with people with responsibility as well as authority locally to enable us to function and deliver on the ground and we do from Plymouth to Glasgow to many other places. You cannot do this by standing back. You have to be able to engage, you have to be able to engage employers. All I would reiterate is that there is inadequate involvement of employers in a process talking about employment. One of the strengths we have demonstrated in getting this is that we have gone out and put almost as much effort into talking to and getting employers involved in the process as we have needed to with the individual. Forming real working relationships with employers and getting more employers prepared to be involved in taking people who have been either disadvantaged or involved in long-term unemployment is in my experience a critical issue. I have talked to a lot of top business people—no names, no pack drill—who think I am mad. Why do you bother? Let the marketplace decide. I do not believe that you can function in that way; I think business is about communities and I believe that it is good business. Not enough business people believe it is good business to get involved in this process.

  142. Given your experience across the country and picking up on a point Graham Parry was making about a regional dimension, do you think there is sufficient flexibility in the system for you to address issues at a local level and at a regional level, or are the various regeneration projects that you tap into too tightly constrained and lack the necessary flexibility to address those special local and regional issues?
  (Mr Reeves) They are too tightly constrained. There is not enough flexibility. It is almost inherent, when we are dealing with Government money. I come out of a major construction projects business, so I have in another sense a lot of experience of dealing with public/private partnerships and PFI. It is almost inherent in the process that nobody trusts anybody. We start with a blank sheet of paper where distrust is written through the centre and we design a system to constrain anything happening rather than deciding that the downside of anything going wrong is far overwhelmed by the upside of operating in a system where we do not spend one third of our time filling out forms. Nobody calculates, as a business would, whether the cost of policing exceeds the cost of fraud—if I might put it as simply as that.

  143. Does the Shaw Trust have a similar experience of lack of flexibility, dare I ask, given some of the remarks you made earlier?
  (Mr Charlesworth) I would echo everything he said. I cannot add anything better to what he said. There is a lack of flexibility and it is all built on that distrust model. I have worked with the Treasury Review Group on the Compact. If only we had the Compact on Funding in practice within Government Departments and within local government then we would all feel far happier from this side of the table.

  144. May I mention two specific points? The intermediate labour markets have been mentioned and Tony Hawkhead mentioned it in his introduction and you have also highlighted some of the benefits of ILMs with regard to individuals: the fact that they are employees from the start of the project. Can you just tell me what role you think ILM initiatives in general have in encouraging neighbourhood renewal and sustainable development, the macro view?
  (Mr Hawkhead) The first thing an intermediate labour market project enables you to do is ground the individual you are helping firmly in a project which helps the local community, so you get an immediate win-win. To give you an example, a similar trust operation in South Yorkshire, Groundwork Dearne Valley, is operating with a number of former mining communities. What has been happening there is that people are being helped to get ILM jobs which directly benefit the local villages, the former mining villages themselves. What is then happening is that the local authorities themselves are breaking down the way they used to work and they are employing those people permanently in jobs instead of a distant direct labour organisation. So you get a win-win: people who know the individual who is stewarding their village, the person concerned has a job and there is a much more direct ownership by the village itself of the services which are being provided. What they want they get.

  145. Do you find that the intermediate labour markets work regardless of market constraints? Picking up on the earlier point about London being an area where there are lots of jobs, is it successful in these other areas, given different market conditions or are there different measures of success?
  (Mr Parry) The same model is run in two different ways. In areas where there are no existing vacancies left open, like the coal fields for example, the ILMs have run as an additionality. New programmes, new projects and employment opportunities are set up. In areas such as London or Birmingham, where the goal is the same, the ILM will operate on a placement within a company trying to recruit, in an organisation trying to recruit. The process is the same: if there are not enough vacancies a new project will be created; if vacancies exist somebody can run an ILM with people placed within organisations looking to recruit.
  (Mr Hawkhead) I would not want you to get the impression that ILMs are created simply to create temporary employment with no end. If that is the only end we have, we do not do it. What we have worked very hard at in Groundwork is that if the jobs exist already, like in London or Birmingham or Manchester, we do not spend lots of time trying to create jobs. We work much harder at creating longer-term green jobs, for example, as in Dearne Valley, where the obvious jobs have gone.

  146. Do either of the two other organisations have an involvement in ILMs?
  (Mr Charlesworth) I talked about the eight social firms we operate, two of which are profit making, which are on a model equivalent to the ILMs. We are affiliated with Goodwill in America and Goodwill as the biggest provider of welfare-to-work, operate some very big social firms. Everything in America being big. One of the areas they operate in is in defence. They operate a public facilities social firm across naval bases on a preferred supplier basis. That might be a model which could be brought here. There used to be a preferred supplier status for Remploy, which has now gone in most local authorities. Something equivalent to that might be a way of developing the ILM market.

  147. Ian Reeves, do you have any involvement with ILMs?
  (Mr Reeves) No.

  148. Do you have any comments on the new StepUp pilots and especially how you see them linking into existing ILM projects. Do you have any involvement with them at all?
  (Mr Hawkhead) The answer is that we will. We were disappointed—and I have told Leigh Lewis this—that being the largest provider of intermediate labour market places in the country we were not consulted about the detail of the programme before it was set up. I think that was an opportunity lost. That said, we are glad to see that what the Jobcentre Plus call a transitional employment scheme is being piloted through StepUp and we are aiming to work in four or five of the pilot areas directly, talking to the local regional offices.

  Mrs Humble: Does anybody else have comments about StepUp? No? Thank you very much.

Mr Dismore

  149. Is it not really the case that you are the exception to the rule? From what you have been saying it is probably self-evident that employers are pretty prejudiced not just against unemployed people but potentially disadvantaged groups, ex offenders or people with disabilities whom Ian Charlesworth looks after. Is that not particularly so when the economy starts to falter? Is it not really a question of one or two big employers getting involved in this and really that is about it?
  (Mr Reeves) I am glad to say the answer to that is no.

  150. Convince me.
  (Mr Reeves) Fair enough. Give me long enough and I hope to do so. First of all you might be interested to know that we had a lunch last Thursday under Getting London Working to which we invited a range of senior people from small to medium-sized enterprises who have become active employers with our programme here in London. There was not one particularly large employer amongst them. They ranged from transportation companies, bus companies, to betting shops, to a new start-up business in web design, to a training group on construction skills. All of them have become engaged because we went out on an outreach basis and engaged them to get involved. People in business do not have two heads. They do care, they live in communities, they have children, some of whom are disabled or dyslexic and all the rest of it. It is not typical to believe business does not care, but it is under pressure, it is in a competitive environment and therefore it has to be made clear that they have a role to play. It has to be facilitated in a way that is important to their business. What is not helpful is to have 300 or 30 inappropriate people sent to you by the Jobcentre for a job. One of the things we insist upon in Tomorrow's People is that we review the applications and we tailor and we only send people who we think have a realistic chance of getting that appointment. That is at the very minimum a respect for the company's time and resources. It is a small example of how you can endear yourself to employers or you can make them decide not to see anybody else. No, it is not just the big employers. Yes, they have more resources. Yes, they can have directors of community affairs, of course; larger companies do have different structures, but our experience working round this country is that it is people who care and they can be in the private sector or the voluntary sector. I do not think that "voluntary sector" is a very good description either. "Not for dividend" is a better one. Most of the people in Tomorrow's People are paid, they do not volunteer. I am probably one of the few people who do not get paid in Tomorrow's People and I am very happy about it. There are many misnomers. It is not true to say that business does not care. It is not true to say that it is only large companies. All of our evidence, which I am very happy to offer you in a supplementary memorandum with some statistics, is about how the people who tend to care are people in the small- to medium-sized enterprises who struggle to attract the best people[6].

  151. It would be useful to have that. Were the small- and medium-sized companies which came from West London or East London or both?
  (Mr Reeves) They tended to come from South London.

  152. The reason I put that to you, is that within London we have the East/West divide on levels of unemployment; certainly in my area you cannot get a bus driver for love or money, which is why we have problems with the bus service. They are absolutely struggling to recruit and similarly in retail.
  (Mr Reeves) It comes down to pay.

  153. Have you tried to do the exercise you have just mentioned and have people got involved and taken people on in other areas of the country where the economy is less buoyant? You said to Anne Begg that some of the employers were prejudiced against people who were unemployed, it equals unemployable, words to that effect. Have you tried to do that sort of exercise in areas where there is visible high unemployment throughout the community? London is a different case: there are patches of very high unemployment as opposed to high job vacancies. What have the results been, not just in terms of getting people round a table to have lunch, but getting them to take people on and sustain employment?
  (Ms Scott) Tomorrow's People does operate around the country, we do have an operation in London but we are operating in places like Liverpool, Newcastle, Glasgow even in Plymouth where there have been some difficulties over the years. I support you totally. It is how you engage with employers and how you offer them a service to make it easier for them to accommodate these people into their workforces. When that level of support is there, then we can provide you with statistics for each individual operation and how it performs. It is not difficult to get them to care. We can take you to one project where its income is predominantly derived from tourism, where one company said they did not have any vacancies but they would like to do their bit to help the local community in which they live and operate enter the labour market even though they did not have vacancies themselves. They have funded us for over three years now to achieve that and it is well worth a visit.

  154. So you have been able to engage small companies in areas of high unemployment.
  (Ms Scott) Yes; absolutely.
  (Mr Reeves) Regularly.

  155. Could you give us some details of that?
  (Ms Scott) Yes.

  156. What do you think the Government should be doing to try to support these business-led initiatives?
  (Mr Reeves) I actually think the problem starts a lot earlier. I am a great believer in prevention being better than cure. I am sorry that time does not permit this morning to get back to schools and education and why we have such a problem in the first place and why it is that we can actually offer this advice to people later on and help them to stabilise their life and move on, where somehow in this intermediate period, where millions are spent, we fail. I spend a good deal of my time going to talk to schools as well because I believe that that is a preparation for adulthood and the world of work. When I see sixteen-year-olds leaving school with nothing, no further education to go to, no job arranged and falling off the edge, I think that is an absolute disgrace. Debbie knows that my view about being an intermediary is to span and interface with education, learning and skills. It is this transition; a major transition. We talk about people transitioning from unemployment to work, but let us talk about people transitioning from school to the world of work. That is the place to get business involved. The other thing I would say which is relevant to this, is why not go and ask more employers about what skills should be taught in schools? Why not ask employers who are actually the customer at the end of the day for employing people? I realise education has a domestic and private and social need as well as an economic need, but at least in the economic area I have yet, as Chairman of the CBI, as a Director of London First, as Deputy Chairman of the Construction Industry Board—I could list all the things I have done—to be asked once by anybody in the Government how we could get people better educated to suit their future intentions.
  (Mr Charlesworth) Eight per cent of people in special education move from school to work. Where is the concern? I do not hear concern there too often from anybody. Quite the opposite. I hear teachers, social workers, doctors, medical staff, persuading people that they cannot work. Maybe the motives are not bad, but they are constantly giving the wrong message. In terms of working with smaller employers, yes, we have big companies like Tesco and Asda who are two of our big providers of work places on WorkStep, but we have a whole range of small companies. Having said that, the prejudice and discrimination out there amongst employers against people with disabilities is enormous. Trying to break that down comes through a long and sustained period of working. I had great hopes that the Disability Rights Commission would begin to knock at that door, but it has concentrated on rights for disabled people. That is fine. It is all right having the right, but if the provision is not there, you are still lost.

  157. Why do you think employment zones are going so well?
  (Mr Parry) I would have to decline to answer that question. Groundwork does not have a huge presence in employment zones.
  (Mr Reeves) I am glad to hear they are.
  (Mr Charlesworth) We work in partnership with Reed's in three of them where we are dealing with disabled people. I would suggest that a lot of lessons have been learned from other New Deal programmes and the approach, which is generally the personal adviser and then the recruitment adviser, which is work focused, is an approach that works.
  (Ms Scott) They are very one-to-one individually based and tailored and there is a high degree of flexibility to provide the client with what they really need to get to work. That needs to be built on and they would continue to be successful.

Chairman

  158. This is a yes or no answer. Supposing I put to you the proposition that the United Kingdom economy in short order really started a downward trend which was serious. Would you have concerns that the kind of apparatus you are all working in just now and particularly the focus on New Deal could be in danger of being swamped if unemployment started to spiral? Is that a real concern that you spend sleepless nights worrying about? Yes or no.
  (Mr Hawkhead) We would not be swamped but there is a risk. Yes, is the answer in terms of the Government.
  (Mr Charlesworth) Yes, because disabled people once again would be put to the back of the queue and have no politicians fighting for them generally speaking.
  (Ms Scott) Yes.

  Chairman: Ladies and gentlemen, that has been very powerful evidence and you have spent a lot of time producing written evidence as well as appearing this morning which takes a lot of time and effort. Thank you for your appearance and thank you again for what you do. Good luck in future. The Committee stands suspended.





6   Please refer to the supplementary memorandum (ES 05B) submitted by Tomorrow's People, Ev 76. Back


 
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