Examination of Witnesses (Questions 186
WEDNESDAY 15 MAY 2002
186. Good morning, ladies and gentlemen. The
Committee is in the course of looking at the Government's employment
strategy and we are joined this morning by a distinguished group
of civil servants who are in the Department for Education and
Skills (DfES), the Department of Trade and Industry (DTI) and
the Department for Transport, Local Government and the Regions
(DTLR). We have Mr Peter Lauener, who is the director of the Learning
Delivery and Standards Group, DfES. We have Mr Mark Beatson, who
is the director of employment market analysis and research in
the Employment Relations Directorate, DTI. We have Mr Chris Riley,
who is the chief economist, DTLR, and Mr Alan Riddell, who is
the deputy director of the Neighbourhood Renewal Unit, DTLR. Gentlemen,
you are all very welcome. Thank you very much for the written
submissions you have made, which are very helpful to us. We are
trying to understand this morning a little bit about how the various
bits of central Government Departments fit together underneath
the umbrella of the Government's overall employment strategy.
I would like to look at each of the three Departments in turn
briefly and then spend some time looking at how they fit together.
I might start with the Department of Trade and Industry and ask
Mark Beatson a couple of questions about the RDAs
and regional selective assistance. We would like to try and understand,
first of all, with particular reference to the DTI, how applications
for regional selective assistance meet national guidelines and
to what extent those guidelines prioritise creation of employment
in disadvantaged areas. Mark, could you say a little bit about
that by way of introduction?
(Mr Beatson) First of all, applications
for regional selective assistance have to be within assisted areas.
The geographical focus of the areas provides a first tier of assistance
towards areas, particularly since the assisted areas map has employment
as a key component in terms of how it is drawn up. Within applications
for regional selective assistance, one of the criteria used is
the number of jobs expected to be either created or safeguarded.
That is not the only criterion taken into account. One also has
to look at the sustainability of the jobs, the viability of the
appraisal case and the bid for selective assistance. When cases
are appraised, the expected cost per job is one of the factors
taken into account. The average cost per job from regional selective
assistance is about £4,700.
187. When you try to coordinate the policy,
to what extent are you targeting a reduction in unemployment,
the so-called register effect? To what extent is the policy focused
on trying to get people off the unemployed register?
(Mr Beatson) If one is looking at similar schemes
that involve safeguarding jobs, you are looking at the issue of
employment of workers who are already in place. Essentially, the
main criterion used is the quality of the application. The register
effect is not appraised separately from the employment effect.
188. Could I ask about the public service agreement
which I understand is to generate more sustainable enterprise
in disadvantaged communities. Are you achieving this and, if so,
how are you measuring it?
(Mr Beatson) The public service agreement (PSA) target
is to generate more sustainable enterprise in the 20 per cent
most disadvantaged local authority wards. Progress will be measured
by promoting enterprise in these disadvantaged neighbourhoods
and in practice by measuring the gap in business start-up rates
between the 20 per cent most advantaged wards and the 20 per cent
least advantaged wards. The initial target is to reduce that gap,
which is currently 35 per cent, by a percentage point each year
until 2005. That is five times the current trend. The measurement
of that is going to be done by the statistics that we produce
each year on VAT registrations.
189. You will reduce the gap by 5 per cent over
(Mr Beatson) That is right, from 35 to 30 per cent.
190. There is still quite a big gap at the end
(Mr Beatson) It is still a sizeable gap but it is
a measurable improvement.
191. If I was a long-term unemployed person
and I thought I would like to set up a business, how would I go
about accessing the Small Business Service? What would be the
(Mr Beatson) There are various routes.
192. How well is that known?
(Mr Beatson) I am not aware if we have any evidence
about awareness on that particular question. One approach is through
small business links which exist in every area. They are meant
to provide a source of assistance to firms in business already
and also for people who are interested in setting up a small business.
193. How do you get to know about business links
if you are not in that network to start with?
(Mr Beatson) That is a good question.
194. There is a reason for asking that question.
We have business link in my area and, talking to unemployed people,
they have never heard of it. Part of the problem is getting to
know about the Small Business Service network. I just do not think
that the network is engaged with unemployed people. Your answer
has confirmed that view. There are two roles for the Small Business
Service. One is when a business is set up, taking people off the
register; the other is helping people who are long-term unemployed
think about raising their own horizons and thinking about what
they can do to start their own business. I do not think you engage
with them at all and you have probably just confirmed that.
(Mr Beatson) In New Deal there is a personal adviser
for people who are interested in starting a small business or
becoming self-employed. In terms of how we relate to Jobcentre
Plus at a local level, that would be one of the linkages.
195. Have you any figures about how many people
from these difficult, disadvantaged communities have been able
to set up their own business through your service, business link,
or through New Deal?
(Mr Beatson) I have not got the figures with me.
196. But they exist. Can we have those figures
for those areas and comparatively with the average and the best
performing wards as well?
(Mr Beatson) We will get back to the Committee on
197. It would be useful to have it regionally
too. Going on to Jobcentre Plus and New Deal, there are two aspects
to this. One is helping people who are unemployed to find work
with existing small businesses; the other is how to set up a small
business. Can you deal with those two aspects?
(Mr Beatson) It is not for me to comment on the operations
of Jobcentre Plus. In terms of starting your own business, that
would come mainly through the advice from Jobcentre Plus and from
personal advisers. There are programmes which can be used to help
particular groups to try and become self-employed.
198. Do you think the personal advisers are
plugged into business link?
(Mr Beatson) There are mechanisms in place to provide
199. That is not what I asked you. That is a
Civil Service answer and this is an MP's question.
(Mr Beatson) I do not think it is for me to make a
judgment on that point.
1 Regional Development Agencies. Back
Please refer to the supplementary memorandum submitted by the
Department of Trade and Industry (ES 16), Ev 143. Back