Select Committee on Work and Pensions Minutes of Evidence

Examination of Witnesses (Questions 220 - 239)



Andrew Selous

  220. Could I ask the witnesses from the DTLR two points in respect of local authorities and how you see their role in, one, creating employment and, two, getting people who are out of work into sustainable employment in their areas?
  (Mr Riley) While DTLR sponsors local government, local authorities deal directly with other Departments. The DWP will be particularly well placed to answer these questions and you will no doubt be putting the same question to them when they appear before you. It is also worth adding that there are severe limits on the ability of local authorities to create jobs directly. We noted in our memorandum that we see the DTLR's role as providing the kind of stable economic environment in which business can flourish and employment opportunities can be created. We see the role of local government also very much in that light. That said, many local authorities do, with our encouragement, have local economic regeneration as one of their key corporate objectives. They play a key role in local strategic partnerships for regeneration, and some local authorities have been involved in the development of employment strategy working closely with Jobcentre Plus and other strategic partners. I can give you examples of local authorities which have been particularly involved if you would like. Manchester has developed city-wide employment plans and they have attempted to pull together Welfare to Work, economic development infrastructure and transport plans with a view to improving the employment conditions in their city. Also, some local authorities attempt to support this objective with their own employment practices—in many areas, the local authority is a major employer—as well as trying to promote employment amongst businesses. Some authorities have initiatives to recruit unemployed young people, ethnic minorities, disabled people through the use of the New Deal.

  221. What role does the Department have in encouraging best practice in terms of economic regeneration amongst local authorities? You have given us some examples of local authorities where they are doing particularly good work; others perhaps are not so successful. What is the Department's role in trying to encourage those who are doing less well to do better?
  (Mr Riley) The Department is responsible for setting a framework within which local authorities operate and in monitoring their efficiency through the best value system. But that is not primarily focused on employment. In practice, one suspects that the difference between local authority performance in this respect very much reflects the particular incidence of worklessness and poverty in their areas.

  222. Although some local authorities can show more energy in trying to tackle those problems than others.
  (Mr Riley) They can indeed. We are only able to measure that to a point. The best value performance indicator system is set up to measure and monitor local authority performance, particularly in areas for which they are directly responsible. Therefore, the indicators typically focus on the efficiency with which direct services are delivered. There is no specific performance indicator that measures local authority performance in helping to create or retain jobs. We have sought to go wider and take a view on whether or not authorities are corporately good employers. We have a number of corporate health indicators, for example, which look at this. Among this group of indicators is one on community strategies, which is obviously highly relevant.

  223. That was not quite the focus of my question. What role do you see local government and registered social landlords having in terms of their own local employment strategies? We heard from some of our witnesses last week about intermediate labour markets and that can be difficult for local authorities because it does not meet the best value criteria and so on. Is that an issue that the Department is aware of or is focusing on, that tension between the two, and is there any move within the Department to try and shift that balance towards helping employment?
  (Mr Riley) I am not sure I can answer that question properly for you. The Housing Corporation, as you know, expects registered social landlords to demonstrate that their strategies are responsive to local conditions, but I am not aware of the particular tension that you are drawing attention to.

  224. When you get back to the Department, if there is anything further you can add to that, would you write to the Committee?
  (Mr Riley) Of course.[7]

Ms Buck

  225. On neighbourhood renewal strategy, could you talk us through quickly how you are monitoring the particular strand, the objective, of the neighbourhood renewal strategy which is aimed at creating work opportunities and possibly also talk about how you see the other pillars of the neighbourhood renewal strategy, combatting crime and so forth, contributing to the employment strand at the same time. What are the criteria you lay down and how are you monitoring them?
  (Mr Riddell) The neighbourhood renewal strategy operates at two different levels. At national level, our unit works through a group chaired by the Permanent Secretary to the Treasury to press individual Departments to set their own floor targets for focus on deprived areas. You raise the interesting question about the Department for Work and Pensions floor targets which relate to the 30 areas with the worst employment markets. The Department of Trade and Industry also has targets related to the Small Business Service input and performance in the most deprived areas. We negotiate with them over producing implementation plans. This has all inevitably taken quite a time to get going but as it goes on the job of the unit is to keep challenging Departments, particularly through the Permanent Secretary's group, as to their performance on the targets. At the moment, it is forming part of the negotiations between the Treasury and individual Departments in the Spending Review for 2002. That is how it works at national level. At local level, it is a more hands off approach than we have been used to in the past. I have figures for the single regeneration budget (SRB), which you might say the neighbourhood renewal strategy is replacing. It claims to have created 696,000 jobs over the life, past and forecast, of the SRB. Whatever you make of those figures, the way in which we do things in the neighbourhood renewal strategy is not quite as targeted as that. What we have done so far since it has been set up is encourage the formation of the local strategic partnerships (LSPs). Most of them are just moving into the second stage of creating their local neighbourhood renewal strategy. Some where there have been previous partnerships have done quite well. Some are pretty much at the start. We will monitor and are monitoring the quality of their local strategies and they have to put statements of use in as to how they use the neighbourhood renewal fund, but they are not meant to be just about that. They are meant to be strategies on how all the agencies, including Jobcentre Plus which is on most partnerships and the others, bring the main programmes to bear to achieve the objectives that they set themselves locally. Following on from that, there is a performance management regime but there is quite a dispute over that because the question of whether central government should have a performance management regime for locally driven initiatives is quite controversial. Our current thinking is we will expect them to draw up their own performance management regimes—we may well issue a model over the next few months—and to assess themselves against the targets that they have identified. It is very much a bottom up approach combined with a top down approach, getting quite a way from the SRB approach, where you just measure what you are doing with the supplementary programmes.

  226. I am a registered schizophrenic on all this because, on the one hand, I am completely in favour of a local authority community development strategy but, on the other hand, I want to know what is going on and be able to get comparative data. As my constituency covers two areas in the 88, there are several problems with it which are not easy to answer. If you have SRB, neighbourhood renewal and in some cases you have New Deal for Communities in other areas and Jobcentre Plus, how do you know which of those initiatives is contributing? How are you sure that they are all contributing? Whose responsibility is it in the local area to put the resource into ensuring that all of those different players in the employment strategy are contributing to the same end, because I think that is a real weakness in the whole area of basic initiatives.
  (Mr Riddell) I will not pretend it is not a tricky game. The LSP cannot be directive because, apart from some influence over the neighbourhood renewal fund, it is not in control of any of the budgets. We very much envisage the LSP as the body that puts together a coherent strategy and challenges the player in that strategy if they do not deliver what they are saying they will deliver. That includes the police, Jobcentre Plus and the local authority itself. We do not see the LSP as a delivery body but a body whose job is to secure delivery locally. This is where it is quite difficult because you will find some people in local government who say that we should have nothing to do with this, but our view is that they are getting money down these streams. If they are not delivering, we will challenge them very hard. We would expect the government offices to do that, not to sit on top of them but firstly to insist that they have outputs and planned outcomes which are, as far as possible, measurable and, if they are not delivering them, we do not sit back and say, "That is too bad"; you challenge them to assess themselves. That is a difficult concept. It is quite different from the way we worked before. I suppose the great thing with the neighbourhood renewal strategy is it is a 10 to 20-year strategy.

  227. You will be gone?
  (Mr Riddell) Long gone, yes.

  228. That is a fair answer because it is difficult. I would want you to be part of that process because there is a real issue about additionality and small areas and the fact that you can take an authority in the 88 where you can achieve the outcomes borough wide and not be making any impact at all upon the wards in the ten per cent most affected, so do not back off.
  (Mr Riddell) You should also be aware that one of the problems is there is not much good data at below ward level. We are putting quite a lot of money with the ONS[8] into developing small area statistics. At the moment, people are able to bench mark locally but not on a nationally consistent basis. There is a lot of money going into that with the ONS to get that going. It would be nice to have all the data ready before we started but we see that as very important in keeping the pressure up to get the evidence of change on a consistent, national basis.

  229. It is very important if the 88 in the neighbourhood renewal strategy do not end up benefiting globally but without the people who are most at risk within that being the ones who benefit within that. The Jobcentre Plus engagement in the neighbourhood renewal areas: this partly goes back to my previous question about the bringing together of those agencies into a common end, because it is not just a question of sitting at the table at a LSP level, but making sure that programmes are complementing each other. Tell me how you are doing on that and is there a difference between the 88 and the 30?
  (Mr Riddell) Yes and no. The floor targets nationally always have to be improved. They were rather invented at the end of SR2000[9] as a bit of an add-on. As part of the current process we are negotiating with the Departments to make them much more bedded in. When SR2002[10] finishes, you will probably find floor targets relate only to mainstream PSA targets, so you do not have any floor targets that are over there, that are the bottom end of one of the main targets. That should help make sure it goes with the stream of what the Department is doing. We see the floor targets as very important in making sure that budgets that are not controllable by local authorities or by central government are prioritised towards the more deprived areas and the people who are worst off. There are issues like the employment areas not always being the same. That is going to be a continuing problem to deal with. The neighbourhood renewal fund is no more than a pump primer. It is marginal to the total amount of money that we have to shift, but it is a big cultural change that has to be achieved. We are well aware that in the past there was a supplementary budget and that displaced other funds which are used in the other part of town or wherever. Trying to avoid that is one of the most difficult things.

  230. The initiatives that get announced such as the green space initiative, which was announced last week, are you anticipating an employment benefit from programmes like that and would you be specifying that there would be a contribution towards employment strategies in that investment that goes into programmes of that kind? The evidence that we received from David Webster of Glasgow City Council was about the way in which there could be a much more creative approach to looking at transport, brown field development and things of this kind, making that much more explicitly part of a labour market strategy. Do you have a view on that?
  (Mr Riddell) I heard him at a seminar on Friday and I am not convinced that I recognise the picture he paints. There is not much doubt that at national level programmes are often put together in silos. The picture has changed tremendously in how you bring these things together at regional and local level. My last job was as regional director of the government office of the east of England and we spent all our time making sure that cross overs between the sort of thing that Mark and Peter were talking about actually worked. The purpose of the local strategic partnerships is to carry that cross over at local level. I do not recognise the picture where the housing department cannot link up with the people who are bringing in the regional development agency through to the land clearance and so on. I was quite surprised, especially coming from Glasgow, to hear him saying that because Glasgow has a reputation of being well ahead of much of the country in that sort of thing.

  231. On things like the urban green space initiative, would you be saying as the government, "Make sure that in doing this you not only improve our urban green space but that there is a knock-on implication"?
  (Mr Riddell) The DTLR does that for all its activities because, being a spatial Department, we tend to look at everything in the round. We always encourage people to look at local labour solutions and so on, where possible, because sometimes it is not allowed under EU law. The green space is only a recommendation. We do not have any money out of the Treasury yet to carry through the recommendations there but if it does go through it will be one of the aspects. That is my understanding. The task force has recommended money on green space.

  232. We thought there was a £500 million budget.
  (Mr Riddell) I do not think that is right.


  233. The cheque might be in the post.
  (Mr Riddell) Maybe. The chief secretary may well be writing it at the moment.

Mr Mitchell

  234. It has only been announced once so you will not get the money until it has been announced six times! On local strategic partnerships about which the Committee heard some evidence recently, how should we as a Committee know whether these are a success or not? Would it be by examining local employment rates? Will there be some mechanism for working out how that initiative may have made a difference to the trend in local employment rates? How do we measure whether it is a success or not?
  (Mr Riddell) There will be two things. One is, as the local statistics come into place, that will give you a bench mark. That is some time away. We will be running an evaluation, as we are already doing. Just today the New Deal for Communities (NDC) evaluation interim report has been published and running an evaluation of programmes is part of this.

  235. What will be the critical yardsticks within that evaluation which will tell you whether it is a success or not?
  (Mr Riddell) It will be the assessment of the consultants on the basis of the factual changes, the evidence changes, but also the more intangible things, which is why on all this neighbourhood renewal stuff you cannot do it just on hard evidence. You also have to have some qualitative evaluation.

  236. What period would be right for a valid assessment to take place?
  (Mr Riddell) We are intending to do a real time evaluation. We are expecting annual reports coming through as this goes on so a year from now you should see something.

Rob Marris

  237. I represent one of the Wolverhampton constituencies and I seem to have the whole alphabet soup of all this stuff: New Deal for Communities and Neighbourhood Renewal and Local Strategic Partnerships and now I find that I am going to be having something called Skills and Knowledge Programme as well. I want to focus on one thing you just said about the evaluation report for New Deal for Communities. There were two waves of the 39 New Deal for Communities in England, I think there were four in the first wave and 35 in the second wave, something like that.
  (Mr Riddell) Yes.

  238. The first wave ones, there should be some of your real time statistics coming through now.
  (Mr Riddell) Yes.

  239. What does the evaluation report that you say is published today tell us about what the New Deal for Communities is having as an impact on employment rates?[11]

  (Mr Riddell) I am just looking at the brief because I have not seen the report myself. What they are publishing today, among other things, is a What Works booklet[12] containing a number of key points and what the consultants conclude have been effective interventions on worklessness. I will be very happy to send a copy of that on to you as soon as I get it. The usual logistics of these things meant that I could not get it before I came here. I have got quite a number of examples of things that NDCs have been doing that are considered to be good practice. Most of them are implementing employment intermediaries and job brokering services. Most of them are placing a heavy emphasis on the barriers placed by disadvantaged groups with outreach work and employability skills development and most of them are exploring intermediate labour market solutions. What all the NDCs have in common because of their community basis is that they have been quite slow to get going. A lot of the time that has been taken in the early years getting community agreement on the way forward. I think Wolverhampton has been one where it has taken quite a long time to get any.

7   Please refer to the supplementary memorandum submitted by the Department for Transport-formerly the DTLR- (ES 12A), Ev 127. Back

8   The Office for National Statistics. Back

9   Spending Review in 2000. Back

10   Spending Review for 2002. Back

11   Please also refer to the supplementary memorandum submitted by the Department for Transport-formerly the DTLR-(ES 12A), Ev 127. Back

12   Subsequent to the oral evidence session, the Neighbourhood Renewal Unit provided the Committee with its paper "What Works? Evidence into Practice. A Review of the Evidence Base for Neighbourhood Renewal: Work in Progress", which was published in May 2002. Back

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