Examination of Witnesses (Questions 220
WEDNESDAY 15 MAY 2002
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 practicesin many
areas, the local authority is a major employeras 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.
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 regimeswe may well issue a model
over the next few monthsand 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
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
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
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
(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.
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
(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.
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?
(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
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
The Office for National Statistics. Back
Spending Review in 2000. Back
Spending Review for 2002. Back
Please also refer to the supplementary memorandum submitted by
the Department for Transport-formerly the DTLR-(ES 12A), Ev 127. Back
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