Letter to the Committee Assistant from
the Department for Transport (ES 12A)
Thank you for your note of 28 May asking for
further information arising from questions put to Chris Riley
and Alan Riddell of former DTLR by the Committee. The points in
your note are dealt with below.
Mr Selous asked (Q. 223-224) about the role
of local authorities and Registered Social Landlords in sourcing
from local and intermediate labour markets.
Many authorities have local economic regeneration
as one of their key corporate objectives and some attempt to support
this objective through their own employment practices as well
as trying to promote this amongst other businesses. For example
some authorities have initiatives to recruit the unemployed, young
people, ethnic minorities or disabled people, for example through
the use of New Deal. A survey carried out by the Employers' Organisation
for Local Government shows that in December 2001, there were a
total of 1639 men employed or trained in local authorities under
New Deal options and 447 women.
The Employers' Organisation is currently producing
some guidance entitled Modernising the Recruitment Process which
touches on the need for activity in this area and provides some
case study examples. Obviously there are other benefits to recruiting
from these specific groups, for example to widen the age/ethnic/disability
profile of the authority and reduce recruitment difficulties.
The Local Government Act 2000 introduced a new
duty on local authorities to prepare community strategies for
promoting or improving the economic, social and environmental
well-being of their areas. Through working with local partners,
the strategy is very likely to consider a number of issues relating
to local employment opportunities and what action the local authority
and others should take. However, the government is not being
prescriptive over the content of the strategies, since it will
depend on an assessment of local priorities.
The 2000 Act also introduced a new wide ranging
power for local authorities to undertake any activity which is
likely to promote the economic, social or environmental well being
of its area. Whilst the power does not allow a local authority
to do anything which is prohibited under other legislation or
to raise money, it nonetheless provides new opportunities for
local authorities to tackle problems facing the local labour market.
It will support the efforts of councils and their partners to
work more closely together on initiatives, by providing councils
with powers to make arrangements or agreements with local partners.
In addition to providing financial assistance to individuals
or organisations, this can extend to other forms of assistance
including staff, goods and services and accommodation. The well-being
power also enables local authorities to form or participate in
companies, trusts, or charities, including joint venture companies,
provided that they are satisfied that the this is likely to achieve
the promotion or improvement of the economic, social or environmental
well-being of the authority's area. While again the Government
does not prescribe how authorities should use the power, it nonetheless
provides a means for local authorities to tackle the challenges
around training and upskilling local people.
Individual local authorities may seek to use
local labour clauses in contracts particularly in the interest
of wider regeneration objectives. However, the scope to do so
is limited by the EC Treaty and the European Public Procurement
legislation. The European Commission has recently provided some
clarification on how social considerations may be taken into consideration
in public procurement exercises. This is in the form of an Interpretative
Communication that explains how social concerns may be taken into
account at each separate stage of the procurement procedure.
But it remains the responsibility of individual local authorities
to make their own judgement about the use of social considerations
in procurement, consistent with domestic law, including the duty
of best value, and the EC legal framework.
However, the Interpretative Communication makes
it clear that unemployed labour clauses can be used as a contract
condition provided that this is non-discriminatory and mentioned
in the contract notice. It is possible that this labour may turn
out to be local but it is not lawful to require local labour;
to do so would amount to discrimination against non-national tenderers.
A statement from a tenderer that they are presently and will
in the future, be unable to comply, could rule their bid out as
Mr Marris asked (Q. 239-245) what impact the
New Deal for Communities partnerships have on employment rates.
The NDCs programme runs over 10 years and the
evaluation phase is just getting underway. Although we will be
monitoring the programme in real time, it is too early to provide
any indication on outcomes. However, most NDC strategies have
taken account of the research evidencethe "What works"
menu/booklet identifies many of the interventions adopted.
The "what works" booklet/menu was
published alongside the NDC evaluation launch and should be considered
a work in progress. Copies of the menu and the evaluation glossy
have already been sent to the committee clerk. The booklet contains
a number of key points on worklessnessthese include which
interventions are often relatively effective. The booklet also
provides some examples, which are summarised below.
Virtually all NDCs are implementing
an "employment intermediary" or "job brokering"
service, in some cases contracted out to a specialist agency,
in other cases building on previous projects. A key element of
such a service is close partnership working with JobCentre Plus
to ensure added value to mainstream provision
Most NDCs place heavy emphasis on
addressing the barriers faced by disadvantaged groups through
outreach work, basic employability skills development and childcare
The use of Intermediate Labour Market
(ILM) solution is common to most NDCs to provide disadvantaged
people with a route into work in the normal labour market, commonly
based upon community enterprises to address local needs (eg childcare).
In East Manchester ILMs are being established to deliver projects
addressing crime and community safety issues thus providing a
basis for linking across themes
Some NDCs recognise the need to provide
continuing support and mentoring to people once they have found
work in order to promote sustainability of employment and progression
beyond the "first rung of the ladder".
The Chairman asked (Q. 295) for a list of the
cross-cutting studies being carried out as part of the Spending
Review. They are as follows:
Improving the Public Space.
Role of the Voluntary Sector in Delivering
Public Sector Labour Market Science
Services for Small Businesses.
Tackling the causes of Health Inequalities.
As Chris Riley noted, information on all of
these is available from the Treasury website. The relevant page
Your note asked what links there are at Government
level between the Urban Regeneration Unit in DTLR and the Transitional
Employment "Step Up" pilots established by DWP.
Six "Step Up" pilots were launched
in April 2002 with a further fourteen being rolled out in the
Autumn. StepUP is designed for those unemployed who have not been
able to secure a full-time job after a New Deal programme and
require more intensive support to make the move to unsupported
employment in the open labour market. While the pilots are targeted
at areas with concentrations of high unemployment which lie close
to areas with high vacancies, they are intended to be a precursor
to a national scheme and as such there have been no direct linkages
between DWP and the Neighbourhood Renewal Unit on this issue.
However, when fully rolled out, all pilots in England will be
located within the 88 Neighbourhood Renewal Fund areas.
Mr Dismore also asked Mr Riddell (Q. 300) to
provide a note on the links between urban regeneration projects
and the intermediate labour market and to what extent the NRU
is working with DWP on this. This is at the Annex 1 to this letter.
Finally, the Chairman asked for a list of all
the different programmes within the former DTLR that had an employment
element. In principle, almost all of our programmes have an employment
element of some kind, even if only because they impact on employment
in a way incidental to the main purpose of the programme, and
it would not be practical or useful to list them all. I think
the areas most relevant to the Committee's work will be the programmes
under the New Deal for Communities, the Neighbourhood Renewal
Fund and the European Regional Development Fund. Details of these
are at Annex 2.
I hope this information is helpful to the Committee's
work. If we can be of further assistance, please let me know.
14 June 2002