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Northern Ireland Forum
for
Political Dialogue
~~~~~~~~~
FINAL REPORT
ON
LONG-TERM UNEMPLOYMENT
by
STANDING COMMITTEE E
(The Northern Ireland Economy)
~~~~~~~~~
Presented to the Northern Ireland Forum for Political
Dialogue
on 31 October 1997
This report has been prepared by Standing
Committee E for the consideration of the Northern
Ireland Forum for Political Dialogue. Until adopted
by the Forum in accordance with its Rules, this
report may not be reproduced in whole or in part or
used for broadcast purposes.
Note
DRAFT REPORTS
ACKNOWLEDGEMENT
The Committee wishes to express its sincere thanks to
all who provided submissions or contributed in any
other way to this investigation into long-term
unemployment.
LONG-TERM UNEMPLOYMENT
CONTENTS
Page
I. INTRODUCTION 1
II. EXISTING TRAINING AND JOB CREATION
MEASURES 5
1. Enterprise Ulster
2. Action for Community Employment (ACE)
3. Jobskills
4. Community Work Programme
5. Open and Flexible Learning Centres
III. SUMMARY OF EVIDENCE 11
1. Introduction
2. Integrated Approach
3. Access
4. Culture
5. Training and Education
6. Job Creation and Assistance to Industry
7. Partnerships
8. External Issues
IV. WELFARE TO WORK 25
1. Introduction
2. New Deal Task Force
3. The New Deal for Young Unemployed People
in Northern Ireland
4. The New Deal for Those Over 25 who have been
unemployed for Two Years or More
Page
V. COMMITTEE'S CONCLUSIONS 31
1. Introduction
2. Integrated Approach
3. Access
4. Culture
5. Training and Education
6. Job Creation and Assistance to Industry
7. Partnerships
8. External Issues
9. Welfare to Work
VI. SUMMARY OF RECOMMENDATIONS 38
Appendices
A. Membership of Standing Committee 'E'
B. Membership of Northern Ireland New Deal Task Force
C. District Councils asked for views on Long-Term Unemployment
Consultation Document
D. Other organisations asked for views on Long-Term
Unemployment Consultation Document
E. Minutes of Evidence taken from Mr G Loughran (DED) and
Mr I Walters (T&EA)
F. T&EA Response to Interim Recommendations
G. CBI Response on Welfare to Work
LONG-TERM UNEMPLOYMENT
I. INTRODUCTION
1. The Economy Committee (Standing Committee E) of the Northern Ireland
Forum for Political Dialogue was set up with the following Terms of
Reference:-
"To examine issues relevant to the performance of the
Northern Ireland economy and report to the Forum at
periodic intervals."
2. Having begun its work of examining issues affecting the performance of the
Northern Ireland economy the Committee focused on long-term
unemployment as one of a number of key areas identified as worthy of
consideration.
3. There are areas within Northern Ireland where unemployment has become
a way of life over a number of generations. In such areas there is simply
not enough employment for the people who live there and the number of
school leavers each year greatly exceeds the number of jobs available for
them. There are, in such areas, families where for generations heads of
households have been on long-term unemployment and this has inevitably
become a way of life for too many people.
1
4. In its 1996/97 Operational Plan the Training and Employment Agency, in
line with its commitment to improving service to its customers, set itself an
objective to examine the needs of the long-term unemployed and review
existing provision.
5. In March 1997 the Agency issued a document discussing the economic
context of its work in relation to the long-term unemployed and offering for
discussion approaches for the recovery and reintegration of the long-term
unemployed into the workforce.
6. The discussion document sought views on how best the Agency could
utilise its resources and provide appropriate measures to make maximum
impact on long-term unemployment.
7. Having identified long-term unemployment as a key area for consideration
and wishing to provide a response to the Training and Employment
Agency's consultation document, the Economy Committee presented an
Interim Report to the Forum on 18 July 1997.
8. The Committee's recommendations relating to the following key issues
were published in that Interim Report:-
(a) Investment;
(b) Training;
(c) Single Integrated Programme;
(d) Benefits Trap;
(e) Skills;
2
(f) Self-Employment;
(g) Community Led Initiatives;
(h) Special Needs; and
(i) Child Care Provision
9. The Committee would welcome incorporation of the following
recommendations which were made in its Interim Report on Long-Term
Unemployment as part of the new Welfare to Work Programme:-
(a) Both individuals and the statutory agencies should continue and
enhance their efforts to attract both inward and indigenous
investment.
(b) Government should offer greater assistance to the business
community as an incentive to provide secure employment for the
long-term unemployed.
(c) Adequate finance should be made available to provide the appropriate
training and assistance to bring the long-term unemployed up to the
required standard to enable them to seek suitable employment.
(d) Government should take an integrated approach towards tackling the
long-term unemployment issue by co-ordinating policies into a single
integrated programme.
3
(e) The benefits system should be redesigned to ensure that the long-term
unemployed are not discouraged from working because of a 'benefit
trap' resulting from a disparity between benefits and wages.
(f) The problem of under-achievement in education should be addressed.
(g) Greater linkages should be established between education and
industry.
(h) Training and financial assistance (including risk capital) should be
available to assist long-term unemployed people who have the ability
and opportunity to establish their own business.
(i) Full recognition should be given to community led initiatives which
make an important contribution to the reduction of long-term
unemployment.
(j) Account should be taken of the special needs of groups within the
long-term unemployed.
(k) Consideration should be given to the provision of affordable child care
to enable unemployed parents to return to work.
10. On 8 September 1997 Mr Tony Worthington MP, the Education and
Training Minister named the members of the Northern Ireland Task Force
which is to spearhead the New Deal initiative which aims to assist
thousands of unemployed young people to move from Welfare to Work.
4
11. Under the New Deal a package of initiatives is currently being put together
to enhance the future prospects of two groups in particular need of extra
help - 18-24 year olds who have been unemployed for six months or more,
and those over 25 who have been out of work for more than two years.
5
II. EXISTING TRAINING AND JOB CREATION MEASURES
1. ENTERPRISE ULSTER
1.1 Enterprise Ulster which was introduced in 1973 aims to assist in the
economic development of Northern Ireland by the provision of effective
quality training and the creation of employment projects of lasting value to
the community. The opportunities created provide the experience and
training to enhance the capabilities, knowledge and skills of the unemployed.
1.2 Enterprise Ulster has two key aims:-
a) to deliver quality training and employment programmes at costs which
equal the best in the field of training and employment provision in
Northern Ireland; and
b) to ensure efficiency and quality performance in each of the
organization's business areas, while avoiding unfair competition with
the private sector.
1.3 Training and work experience is available to people over the age of 18 who
must be unemployed for at least 3 months.
1.4 The trainee receives a training allowance of £10 per week on top of his/her
existing benefits. A tax free bonus of up to £200 can be earned on the
completion of a 12 month programme by any trainee who achieves clearly
defined objectives in respect of attendance, vocational qualifications and job
seeking.
6
1.5 Enterprise Ulster is the largest training organisation in the Province with
1,356 trainee places filled in 1996/97. Opportunities exist in virtually any
field within the public and voluntary sectors, in which an unemployed
person would wish to gain work experience and associated "off the job
training".
1.6 The formal training can be undertaken at a Further Education College,
Training Centre or other recognised facility.
2. ACTION FOR COMMUNITY EMPLOYMENT (ACE)
2.1 Action for Community Employment (ACE), introduced in 1981, is available
only to adults aged 18 and under 64 who have been unemployed for 12 out
of the last 15 months and for 3 months without a break prior to entering
ACE. Those aged 18 to 24 years only need to be unemployed for the
previous 6 months and persons who have been on Jobskills may count all of
this time as unemployed.
2.2 ACE can offer temporary employment for up to one year on projects of
community benefit such as community service, youth work or
environmental improvements.
2.3 ACE was designed to combat long-term unemployment in the hope that
experience gained and training provided would enable the person to compete
more effectively for permanent jobs.
7
2.4 Formal training provided by ACE Providers includes RSA, City and Guilds
and NVQs. In order to become an ACE Provider prior approval must be
sought from the Training and Employment Agency.
2.5 All vacancies for ACE posts are advertised in local Training and
Employment Agency offices.
3. JOBSKILLS
3.1 Jobskills was launched in Northern Ireland in April 1995 as an integrated
training scheme to replace the Youth Training Programme (YTP), the Job
Training Programme (JTP) and the Skills Training Scheme.
3.2 The programme caters for:-
a) persons in the 16-24 year old age group who are first time entrants to
the labour market or unemployed; and
b) persons in the 25-60 year old age group who are unemployed for more
than three months.
3.3 Young people under the age of 18 receive a training allowance of £29.50 in
their first year and £35.00 in their second year. Adults are entitled to
£10.00 per week to augment their weekly benefit which is not affected. In
addition a lump sum bonus is payable on completion of relevant NVQs if
completed within the specified time.
8
3.4 Access Training is targeted at NVQ Level 1 and is regarded as a preparatory
stage which allows trainees who gain NVQ Level 1 to progress to
Mainstream Training. Trainees who achieve NVQ Level 1 are eligible for a
bonus of £200.00.
3.5 Mainstream Training focuses on gaining NVQs at Level 2 and Level 3. A
tax free bonus of £300.00 is available to trainees who reach NVQ Level 2
and a further £400.00 to trainees who reach NVQ Level 3.
3.6 Jobskills is funded by the Training and Employment Agency and anyone
wishing to join should first approach their local T&EA office which, in turn,
will refer them to the Recognised Training Organisation (RTO) which will
be responsible for delivering the appropriate training. Any Training Centre,
College of Further Education or Managing Agent can become a Recognised
Training Organisation but only with the prior approval of the T&EA.
3.7 As all training is based on standards set by industry, participants gain skills
which employers need and, therefore, have a much greater chance of
getting a job.
4. COMMUNITY WORK PROGRAMME
4.1 The Community Work Programme is a new programme being piloted in 3
areas: Fermanagh, Strabane and West Belfast. It is only open to adults
who have been unemployed for 12 months or more. In the initial pilot
phase, 1,000 places are available.
9
4.2 The programme is community focused, offering individuals the opportunity
to expand and develop their existing skills on projects which in turn will
benefit their local community, without in any way affecting their own
benefits.
4.3 The Community Work Programme aims to:-
a) provide meaningful and rewarding work with training lasting up to
3 years for the long-term unemployed;
b) empower communities to take effective action through locally identified
projects to address local needs, and
c) enable the long-term unemployed through community work projects to
make use of and to develop their skills with complementary training.
4.4 Most participants are not amenable to classroom type or overtly directed
training. In the main training takes place on-the-job and focuses on
allowing participants to regain the disciplines of a working environment and
practice and upgrade their existing skills. In outline training in CWP
involves:-
(1) Induction - This includes: the Programme
the Placement Provider
the work practice
activity
(2) Health and Safety - This includes: safe work practices
safe work environment
safety of colleagues
10
safety of public
(3) Work Tasks - This includes: what is the task
how is it done
what is the standard
(4) Customer Care - This includes: who is the customer
what do they expect
what is the standard
11
(5) Jobsearch - This includes: skills audit
progression planning
where to find a job
selling yourself
4.5 Participants receive a training allowance equivalent to benefit entitlement
plus an additional weekly training premium ranging from £20 to £55
depending on the position held. There is also the opportunity to qualify for
bonus payments based on performance and achievement of qualifications.
4.6 The programme is funded entirely by the Training and Employment Agency
who contract its delivery with regional partnerships.
5. OPEN AND FLEXIBLE LEARNING CENTRES
5.1 The T&EA is committed to the use of Open and Flexible Learning, where
appropriate, to meet the training needs of individuals and organisations.
5.2 The Agency provides information and advice on Open and Flexible learning
and supports training for the unemployed, women returning to the
workplace and the disabled via a network of approved Open Learning
Access Centres.
12
III. SUMMARY OF EVIDENCE
1. INTRODUCTION
1.1 The organisations listed at Appendices C and D were asked for their views
on the Long-Term Unemployment consultation document issued recently by
the Training and Employment Agency. They were also requested to make
a brief written submission to the Economy Committee setting out any
thoughts they might have on how to alleviate the problem of long-term
unemployment. Responses have been received from the following
organisations and their views and suggestions are summarised thematically
below:-
(a) District and Borough Councils
Ballymena Borough Council
Banbridge District Council
Coleraine Borough Council
Cookstown District Council
Craigavon Borough Council
Down District Council
Larne Borough Council
Lisburn Borough Council
Moyle District Council
(b) Other Organisations
Bryson House
13
Confederation of British Industry (Northern Ireland)
Enterprise Ulster
Fermanagh Community Work Programme
Lenadoon Community Forum
Northern Ireland Committee of the Irish Congress of Trade Unions
Northern Ireland Federation of ACE Schemes
Strabane and District Community Work Programme
2. INTEGRATED APPROACH
2.1 The general feeling relating to an integrated approach was that the level of
long-term unemployment can be reduced through a concerted and
co-ordinated approach by government, the community/voluntary sector and
the private sector. However, it is also essential that the long-term
unemployed themselves are committed to the development of solutions. A
high profile campaign is required to address this issue.
2.2 The T&EA and Central Government have been encouraged by a number of
respondents to take an integrated approach towards tackling the long-term
unemployment issue insofar as this recognises the need to have a single
policy dealing with the related social and economic programmes. A
pragmatic multi-programme approach is required to tackle the problem of
long-term unemployment.
2.3 This multi-levelled, multi-disciplinary approach is dependent on providing
the access, guidance and learning opportunities to meet the individual needs
of the customer at the appropriate time, pace, place and cost.
14
2.4 There must be closer liaison between the funder of programmes and the
DHSS and a re-engineering of the benefit structure to remunerate
participants.
2.5 A multi-level, multi-disciplinary Integrated Programme should include:
a seamless, flexible process relating to the needs of the customer on
entry and building on their strengths progressively so as to gain
employment and qualifications;
a one-stop access point to this process with outreach to the street
corner;
provision of foundation training for those entering the process without
adequate basic skills;
provision of transitional support when required between vocational
training levels;
real work experience in segments of the labour market where vacancies
occur;
recognition of special group needs; disabled, ex-prisoners etc;
special targeting to PAFT and TSN areas;
15
harnessing local capacities and skill to meet needs and services identified
in the process of local development audits.
2.6 Where opportunities arise T&EA programmes should be linked with
European Union packages.
2.7 Many respondents have welcomed the T&EA's consultative document and
respondents have endorsed the recognition in the document that the
long-term unemployed are not a homogeneous group. A number of
measures need to be taken together to form a co-ordinated programme for
the long-term unemployed and it has been argued that a "benefit-plus"
approach is both inappropriate and ineffective.
2.8 A broad programme for the long-term unemployed should cover initial
guidance, induction training, remedial literacy and numeracy courses,
training to NVQ level, work placement, job search and interviewing skills, in
both employment and training programmes specially designed to recognise
the fact that the long-term unemployed are not a homogeneous group.
2.9 Northern Ireland should be regarded as a suitable pilot study area in which
the issues of interface between unemployment, the Jobseekers Allowance
and education courses should be more fully explored.
3. ACCESS
3.1 Lack of access to mainstream training/employment programmes remains a
significant factor to be overcome and it has been suggested that District
16
Councils and local partnerships can offer examples of relatively small scale
innovative programmes aimed at tackling issues of access.
3.2 A "Bridge Builder Programme" delivered by one District Council in
partnership with the Local Enterprise Agency and Industrial Training
Services (ITS) is a very successful pilot training project designed
specifically to help the long-term unemployed to access mainstream
training/employment programmes.
3.3 The local Economic Development Officer believes that the T&EA should
consider the delivery of small scale innovative programmes, such as Bridge
Builder, in partnership with local Councils and local partnerships.
Role of Employers
3.4 Employers have an essential part to play in providing information on job
requirements and skill needs. However, it is essential that such information
is collated and appropriately distributed to ensure that the long-term
unemployed know more about the job market, and how it is changing.
3.5 Government, as the largest employer in the Province, should review what it
can do itself to improve the access of the long-term unemployed to job
opportunities.
4. CULTURE
4.1 One of the Economic Development Officers who responded does not feel
that existing training programmes go far enough to tackle the mental and
17
cultural impact of being unemployed for a long period of time. He has
submitted an MBA thesis entitled 'A Study to Examine the Effects of a
Structured Training Plan on the Employability of Unemployed Individuals
within Northern Ireland' which looks at the perspective of the long-term
unemployment culture and its effects on allowing individuals to get back to
work. An Executive Summary of his thesis is included as Appendix C(3).
5. TRAINING AND EDUCATION
5.1 More could be done to provide training which would help prepare the
unemployed to have a reasonable chance of being recruited in new or
expanding industries.
5.2 One District Council has suggested that it may be worth considering
offering specific programmes to exclusive target groups for maximum
benefit, eg providing places on Jobskills only to those with low skills levels.
5.3 The following ideas to alleviate long-term unemployment have been put
forward by one of the District Council Economic Development Officers:-
Provide skills refresher courses for those whose unemployment is not
due to a declining industry.
Provide motivation courses, and training in interview skills and CV
completion for those suffering the effects of long-term unemployment.
18
Prepare the long-term unemployed by educating those who are willing in
skills/topics relevant to the industries of the area that are planning to
expand or have just arrived.
Promote the option of self-employment and the training and help that
exists.
Voluntary placement schemes of a short or long duration to allow new
graduates to expose themselves to industry and its demands.
The continued support of the Community Business Programme operated
by LEDU to allow individuals collectively to run a business thus exposing
them to the idea of entrepreneurship and increasing their confidence to
help them realise their ability to do something individually.
5.4 Any programme that is going to aim to tackle the diverse range of issues
involved in Long-Term Unemployment must be multi-layered and
encompass opportunities for all at differing levels of entry. It is considered
that the initial steps to access information, advice and guidance on the
opportunities available on the necessary starting point on a career-learning
curve should be through an Information Resource Centre. A number of
options may follow on from the initial intervention and may include some of
the following:-
Second Chance School - could address the basic needs of those people for
whom the educational system has failed.
19
Structured Volunteer Placements - the commercial sector should be
encouraged to form partnerships with the voluntary sector and share in the
support and mentoring of people as they make their return to the world of
work.
Targeting Long-Term Unemployed and Those "At Risk" - a way of dealing
with those at risk of becoming long-term unemployed would be to remove
current rules on eligibility for both current and future schemes.
Training for Work - should encompass: sectored (manufacturing, retail,
warehousing, or where demand lies); technological (IT, internet, e-mail,
networking) and; enterprise (pre self-employment programmes combined
with work experience, shadowing, mentoring and other coaching activities.
Business Training - linking and matching to employment opportunities.
Learning Support Unit - offering additional support and assistance to slow
learners and low achievers in reaching their targeted outcomes.
Programme Duration - opportunities for work trialling within programmes
should be permitted within a longer contracted period of employment.
Financial Incentives in Training - could be increased at each stage leading
to higher training and eventually employment.
5.5 One respondent has suggested that enhanced investment and greater effort
should be made by Central Government to allow existing training schemes
20
such as ACE to provide tailored training, co-designed by and for local
industry.
5.6 There is a need to establish and create meaningful linkages and joint
ventures between Education and Industry. There appears to be a gap
throughout Northern Ireland between the requirements of local industry and
the quality and variety of output being delivered by the Education sector.
5.7 The Northern Ireland Business Education Partnership (NIBEP) was
established in 1995 with the aim of bringing a greater focus to the
importance of such links in strengthening the educational and economic
infrastructure. NIBEP is jointly sponsored by the Training and Employment
Agency (T&EA) and the Department of Education for Northern Ireland
(DENI).
5.8 The T&EA's careers officers offer advice and information to young people
in secondary schools regarding job opportunities and at senior policy level
the T&EA and DENI meet regularly to consider issues and topics of
common interest.
5.9 It is vital that low and under achievement in the education system is
addressed if the flow into LTU is to be reduced in the medium/long-term.
The extent of under achievement within the Province remains at
unacceptable levels and a concerted effort is required to reduce it.
6. JOB CREATION AND ASSISTANCE TO INDUSTRY
21
6.1 Greater assistance should be made available to industry as an incentive to
provide secure employment for the long-term unemployed. The Industrial
Development Board could consider the possibility of offering grant
assistance to any potential inward investor with the proviso that where
possible up to 5% of the new workforce should be from the long-term
unemployed sector. Assistance could take the form of additional 'tax
breaks' as opposed to direct employment grants, which in the past have
often failed to secure long-term employment.
6.2 One respondent feels that employers would be encouraged to consider
employing the long-term unemployed if they were granted significant
subsidies to do so. The subsidies would help to compensate for staff time
spent "training up" the new employees and additional job related training.
6.3 A scheme could be introduced for a subsidy for employers, both in the
public and private sectors, who are prepared to take on the long-term
unemployed. There should be a specific recognition of the value of
employment in the social economy and that consultations and discussions
take place with the voluntary and community sectors on ways in which
they may be able to assist in developing projects and programmes in this
sector.
6.4 Given the size of the budgets of both the IDB and LEDU, it is felt that both
agencies should include in their grants packages provisions to set targets for
companies receiving grant aid in respect of a proportion of new jobs created
being aimed at the long-term unemployed.
22
6.5 Creation of sustainable new jobs through community organisations should
be encouraged, particularly in areas of social and environmental care.
6.6 Well established, financially viable, local family run businesses could be
offered some sort of financial/training package to encourage expansion and
provision of skilled employment possibilities.
6.7 In one District Council area where there is a persistent and unacceptable
level of long-term unemployment which is particularly endemic among
young people under 30 and adult males over the age of 45 the Council
believes that this poses a major threat to the future economic prosperity of
the district and is firmly committed to finding a lasting solution.
6.8 The District Council recently published a local economic development
strategy which highlights the development of a new approach to tackling
long-term unemployment as an essential component. This new approach is
centred on the perception that government has failed to address the problem
and that long-term unemployment can only be resolved at local level
involving local actors working in partnership.
6.9 The Council has engaged the WISE Group based in Glasgow to apply its
successful job creation model which is already working in several areas of
Great Britain. Essentially, the model assists long-term unemployed people to
reintegrate back into the labour market by paying the going rate for the job,
delivers a range of socially useful products and services to the local
community, and involves local people in the management of projects to
promote ownership and ensure sustainability (see Appendix C(6)).
23
7. PARTNERSHIPS
7.1 There is a need to create additional sustainable jobs within the public, private
and voluntary sectors and a greater degree of private sector involvement in
the consultative and job placement processes.
7.2 In responding to the main challenges outlined in section seven of the T&EA
Consultation Document one District Council Economic Development
Officer suggested that as many councils and local enterprise agencies run
successful employment creation programmes, the partnership option would
seem suitable. A partnership approach would necessitate a realistic injection
of funds from the government agencies and a private sector contribution.
7.3 The development of local partnerships, involving all the key players, to
address LTU is to be encouraged. The T&EA has a key task to ensure that
these partnerships are provided with comprehensive breakdown of both the
LTU (in ward areas) and the current labour market opportunities (in ward
and wider geographical areas).
7.4 The perspective of a 'public works' approach should be included.
Partnership between Local District Councils, CWP Managers and local
community group providers could have a favourable impact on the
provision of work experience for the long-term unemployed, the
empowering of local communities and the provision of enhanced local
amenities.
24
7.5 Innovative community led initiatives must complement existing Government
initiatives if the problem of long-term unemployment is to be successfully
tackled. In one area of Belfast it is envisaged that a Neighbourhood
Regeneration Work Programme will be managed and delivered by a
Partnership Board. The Board will be composed of representatives of the
community, private and public sectors and thus modelled on the Community
Work Programme structure.
7.6 Community economic development initiatives have created greater
confidence and skills levels amongst many of the long-term unemployed and
it is felt that a range of tailored, sectoral and local responses can keep
long-term unemployment to a minimum. It is considered that a
non-academic, pro-community and pro-commercial driven response is
required.
25
8. EXTERNAL ISSUES
8.1 External issues such as child care provision, the 'benefits trap' and any
potential minimum wage for part-time employees, will all have a direct
impact on long-term unemployment.
8.2 It has been suggested that one of the factors affecting returnees to work is
the lack of provision of affordable child care. This needs to be addressed
and may even create new employment opportunities.
8.3 Government, as the largest employer in the Province, should review what it
can do itself to improve the access of LTU to job opportunities. There are
significant barriers associated with the nature of public transport provision.
The costs and services of public transport need to be reviewed from the
perspective of the LTU. It is vital that those seeking employment are
provided with appropriate access to those areas providing employment
opportunities.
8.4 One respondent has recommended that a joint study be undertaken by the
bus companies, the DOE and the T&EA into ways of tackling the transport
difficulties of those relying on public transport to reach jobs in certain areas
and that a special guidance service for the long-term unemployed and a
scheme under which placements for the long-term unemployed should be
procured from the private sector and direct labour organisations in
comparable units in the public sector. They are also keen to have
established an interdepartmental group to examine benefit /low wage/
taxation interface problems.
26
8.5 The major issue of redesign of the benefits system must be addressed to
ensure that wages are more than the total benefit income to a person's
household.
27
IV. WELFARE TO WORK
1. INTRODUCTION
1.1 The New Deal for young people and long-term unemployed adults is the
first major element of the Government's Welfare to Work programme. At
present almost 180,000 young people throughout the UK have been
unemployed and claiming Jobseeker's Allowance for six months or more.
When the New Deal is introduced it will help young people who have been
unemployed for six months or more, it will help all young people who reach
six months unemployment, and it will help more than 250,000 people into
work over the full potential life of this Parliament, at a cost of £3.5 billion
funded from the windfall levy on the excess profits of the privatised utilities
of which Northern Ireland will receive £140 million.
2. NEW DEAL TASK FORCE
2.1 A Northern Ireland Task Force is to spearhead the New Deal initiative
which aims to assist thousands of unemployed young people to move from
welfare to work.
2.2 The Task Force, led by Bill McGinnis OBE, Chairman of the Training and
Employment Agency and Sperrin Metals, will play a pivotal role in providing
advice on key issues of programme design and policy, marketing the New
Deal to employers and supplying an independent audit of progress and
success.
28
2.3 The new body will include representatives from employer, trade union,
education and training, voluntary and environmental sectors. Youth will
also have its say on the Task Force with the appointment of Jason Caldwell,
an A-Level student and member of the Youth Forum.
2.4 A full list of Northern Ireland New Deal Task Force members is included as
Appendix B.
3. THE NEW DEAL FOR YOUNG UNEMPLOYED PEOPLE IN
NORTHERN IRELAND
3.1 The New Deal for young people will help all those aged 18-24 who claim
Jobseeker's Allowance (JSA) for six months or more. In Northern Ireland
there are currently over 8,000 young people who have been unemployed for
over six months. But the labour market does not stand still and as some of
these young people move into employment, others will reach six months
unemployment. The Training and Employment Agency (T&EA) estimates
that 13,500 young people will become eligible for the New Deal in the first
year of the new programme.
3.2 The New Deal will start with extra help with finding work. For many, this
extra support will be just what is needed to make the transition into
employment. But it is estimated that just over 9,000 young people will need
and will benefit from one of the four New Deal options which will be made
available offering opportunities for work, education and training.
29
3.3 The New Deal will be tailored to each individual's needs and circumstances.
It will begin with an intensive period of counselling, advice and careers
guidance - a "Gateway" to the New Deal. Young people will also have
access to a range of other forms of help. For example, those who need
help to improve their basic skills will have the chance to do so before
progressing into one of the New Deal's four options for young people.
During "Gateway", the T&EA will be able to help many young people to
find jobs and move off welfare into work.
3.4 Those young people who remain unemployed will have the opportunity to
pursue a place in one of the four New Deal options. Young people will be
helped to decide which options would do most to improve their skills and
employment prospects. They will then be assisted in taking up a place in
one of the options. Young people will continue to receive guidance and
support throughout their period on an option.
3.5 The four New Deal options are:
Option 1:
A paid job with a private sector employer which will include one day a
week (or its equivalent) in education and training designed to achieve an
accredited qualification. Employers will be offered £60 per week for up to
26 weeks as a contribution towards the employee's recruitment and
employment costs. In addition, up to £750 will be provided per placement
to cover the education and training component. About 40% are expected to
take up this option.
30
Option 2:
A job for six months with the Government's new Environmental Task
Force which will include day release education and training opportunities
designed to reach an accredited qualification.
Option 3:
A job for six months with a Voluntary sector employer doing rewarding and
challenging work for the benefit of the community, with one day per week
allowed for education and training to attain an accredited qualification.
For those on Options 2 and 3 a grant of up to £400 will be paid. This will
ensure that the young people are entitled to retain all their benefits and to
have their part in the New Deal programme properly recognised. Voluntary
bodies and environmental organisations which prefer to pay a wage may do
so.
Option 4:
The opportunity, for those who need to obtain qualifications to improve
their employment prospects, to take up full-time education or training for up
to 12 months on an approved course leading to an accredited qualification.
They will receive an allowance equivalent to benefit, plus access to a grant
to help with study materials and fares.
3.6 If young people refuse or fail to take up places, there will be no fifth option
of continued full benefit - Jobseeker's Allowance (JSA) benefit sanctions
will apply. Young people who unreasonably refuse a New Deal place will
31
lose their JSA for two weeks. If they refuse a further offer at any time in
the following 12 months, they will lose their JSA for four weeks.
3.7 During their time in New Deal options, young people will continue to
receive intensive advice and support aimed at getting or maintaining a job in
the regular labour market after the New Deal period. The latter stages of
each of the options will therefore include intensive help with job search and
jobs/careers advice and guidance, for every young person who needs help.
3.8 Young people who return to claimant unemployment after their options will
receive further intensive help to get back to work as quickly as possible -
and a wide range of measures to help young people into employment and
training will be available for those who need it. This is an entirely new
approach to employment programmes. It will entail:
- an advisory process for every young person who returns to claiming
JSA soon after completing a New Deal option. It will include, according
to the individual young person's needs; further vocational guidance; the
agreement of new employment goals and job search action plans;
continued supported job search and the chance to take up a place in a
Jobclub;
- extra help through a range of measures designed to increase the numbers
of young people who get jobs quickly after New Deal options. The
range will include recruitment and training packages offered to
employers, help for those young people who wish to set up business on
their own; access to modern apprenticeships;
32
- special provision for those young people who continue to lack the
necessary skills to find work. This will include immediate access to
training in basic employability or key skills.
3.9 This unique approach recognises both that many young people will have
benefited considerably from their New Deal options and will move quickly
into employment whilst others will continue to need further intensive
education, training or other support.
3.10 In Northern Ireland pilot projects for the New Deal for 18-24 year olds was
aimed to come on stream this year and the full programme will commence
in April 1998.
4. THE NEW DEAL FOR THOSE OVER 25 WHO HAVE BEEN
UNEMPLOYED FOR TWO YEARS OR MORE
4.1 The New Deal will provide additional help to increase the employment
prospects of those aged 25 and over who have been unemployed for two
years or more. From June 1998 the New Deal will offer throughout
Northern Ireland payments of £75 per week for 26 weeks to employers
who recruit people aged 25 and over who have been unemployed for two
years or more.
33
V. COMMITTEE'S CONCLUSIONS
1. INTRODUCTION
1.1 Despite the fact that short-term unemployment rates in the local economy
have fallen to the level of those in the rest of the United Kingdom, long-term
unemployment remains a major problem in the Northern Ireland labour
market. While long-term unemployment rates in Northern Ireland have also
declined, they remain twice those of the UK. Unemployment has become a
way of life for too many people.
1.2 The Committee's conclusions on a number of the key issues relating to
long-term unemployment were presented to the Forum on 18 July 1997 in
its Interim Report on Long-Term Unemployment and a summary of the
Committee's recommendations contained in that report is included in the
Introduction to this Final Report.
2. INTEGRATED APPROACH
2.1 The Committee notes the recent link forged at Ministerial level between the
Training and Employment Agency and the Department of Education and
accepts the need for greater employment awareness in schools.
2.2 The Committee is looking to all sections of the community - employers,
trade unions, voluntary organisations, local authorities, colleges and training
providers - to work in partnership to offer both young people and the
long-term unemployed the chance to work, to earn and to be independent.
34
3. ACCESS
3.1 The Committee is concerned about the imbalance of poverty and social
deprivation in rural areas where unemployment tends to cause greater
hardship and notes that existing arrangements for targeting social need do
not always meet the needs of people living in these small deprived areas.
3.2 Lack of access to mainstream training/employment programmes remains a
significant factor to be overcome and the Committee considers that the
Training and Employment Agency should encourage local delivery of
innovative measures to improve access eg through the Local Economic
Development Units of District Councils.
4. CULTURE
4.1 The Committee feels that existing training programmes do not go far
enough to tackle the psychological and cultural impact of being unemployed
for a long period of time.
4.2 The Committee also considers that the new Welfare to Work programme
may encourage ageism and create a "second-class" group amongst the
long-term unemployed who will be relegated to environmental and social
schemes eg ACE. In this regard the Committee considers that success with
young people is at least to some extent dependent on successful
employment programmes with their parents.
35
4.3 The Committee considers that there is a need for a more co-ordinated
approach to tackle long-term unemployment with greater linkages between
the Department of Health and Social Services and the Training and
Employment Agency.
5. TRAINING AND EDUCATION
5.1 More could be done to provide training which would help prepare the
unemployed to have a reasonable chance of being recruited in new or
expanding industries. Those amongst the unemployed who are willing
should be trained in skills relevant to the demands of the industries in their
area.
5.2 Efforts should be made to promote the option of self-employment and the
training and help that is already available. There is scope for an integrated
approach between LEDU, T&EA and the Department of Education.
5.3 The Committee is of the opinion that the education programme in schools,
from primary level upwards, should be tailored to the requirements of the
modern working environment. A greater emphasis should be placed on
careers teaching, offering a balanced careers advisory service in all work
disciplines to assist young people in identifying suitable careers.
5.4 The Committee feels that a more pro-active approach is required in order to
involve employers, with financial assistance from Government, in taking on
trainees from amongst the long-term unemployed.
36
5.5 Traditional skills/crafts should be preserved and encouraged as they are in
other European Union countries like France where colleges throughout the
country encourage the retention of traditional crafts especially
stone-masonry and wood-carving.
6. JOB CREATION AND ASSISTANCE TO INDUSTRY
6.1 The Committee considers that greater assistance should be made available
to industry as an incentive to provide secure employment for the long-term
unemployed.
6.2 The Industrial Development Board should consider the possibility of
offering grant assistance to potential inward investors who are prepared to
draw a percentage of their new workforce from the ranks of the long-term
unemployed.
6.3 The Committee is concerned about the implications of the 'New Deal' for
existing schemes such as ACE and there is a need to consider ACE as
contributing to the improvement of the social economy with programmes
being directed towards the more seriously disadvantaged. Although
introduced at a time when unemployment was very high, the Committee
feels that there is a continuing role for ACE schemes.
6.4 The Committee is concerned about the short term impact which the New
Deal proposal to offer employers £60 per week for up to 26 weeks to
contribute to the costs of recruiting and employing young people is likely to
have. When the 26 weeks period ends there is no guarantee of subsequent
37
employment. The Committee considers that it is essential to monitor the
process to ensure that proper training is being provided and that there
should be some commitment to providing permanent jobs. The Committee
feels that there are potential weaknesses in the proposals, for example, in
some cases 26 weeks is not considered adequate to enable a young person
to achieve NVQ standard and consideration should be given to extending the
scheme to a secondary phase.
6.5 LEDU and IDB should be encouraged to examine other European models
with regard to job creation, for example, "Enterprises d'Insertion" - a
Government-assisted programme in France to encourage new enterprises
which are established by unemployed people for the benefit of the
unemployed.
6.6 The Committee is also concerned at the proposed reduction in the Public
Expenditure Plans for 1999 for industry, energy, trade and employment.
This would reduce long term prospects for those in 'Welfare to Work'.
7. PARTNERSHIPS
7.1 The development of local partnerships, involving all the key players, to
address long-term unemployment is to be encouraged. Innovative
community led initiatives should complement existing Government initiatives
if the problem of long-term unemployment is to be successfully tackled.
38
7.2 The Committee considers that there is a need to create additional sustainable
jobs within the public, private and voluntary sectors and a greater degree of
private sector involvement in the consultative and job placement processes.
39
8. EXTERNAL ISSUES
8.1 The Committee feels that external issues such as child care provision, the
'benefits trap' and any potential minimum wage for part-time employees all
have a direct impact on long-term unemployment and could either
contribute to the solution or exacerbate the problem.
8.2 One of the factors affecting returnees to work is the lack of provision of
affordable child care. This needs to be addressed.
8.3 The Committee considers that the major issue of redesign of the benefits
system must be addressed to ensure that wages are more than the total
benefit income to a person's household.
9. WELFARE TO WORK
9.1 The Committee examined the Government's proposed new 'Welfare to
Work' programme and considers it to be an ambitious scheme which it is
hoped will prove to be effective in enhancing the future prospects of the
unemployed. However, members have expressed a number of concerns
and reservations about the programme.
9.2 Since 'Welfare to Work' is a UK-wide initiative the Committee is concerned
that its delivery may not be tailored sufficiently to the particular structural
needs of unemployment in Northern Ireland. While long-term
unemployment rates in Northern Ireland have declined they nevertheless
remain twice those of the United Kingdom and new jobs tend to go to new
40
entrants or returners to the labour market, rather than to the long-term
unemployed.
9.3 While generally accepting the need for some form of benefit sanctions to be
applied to those who unreasonably refuse to take up a suitable option the
Committee is concerned that the "New Deal" will do little to ensure that the
unemployed are not discouraged from working because of a 'benefit trap'
resulting from a disparity between benefits and wages.
9.4 The Committee also has reservations about the proposed timescale for
training existing staff to provide guidance and advice on the new Welfare to
Work programme and for recruiting and training new staff. The Committee
is concerned that especially in the early stages of the 'New Deal' quality of
service and advice to the public may suffer.
41
VI. SUMMARY OF RECOMMENDATIONS
1. There is a need for a more co-ordinated approach to tackle long-term
unemployment and the Committee recommends that employers,
trade unions, voluntary organisations, local authorities, colleges and
training providers should work in partnership to offer the long-term
unemployed the chance to work.
2. The Robinson indicators are no longer accepted as an accurate
barometer and arrangements must be made for targeting social need
taking into account poverty and social deprivation in pockets of
deprivation and in rural areas.
3. The Training and Employment Agency should encourage local delivery
of innovative measures to improve access to training/employment
programmes.
4. Training programmes should understand and tackle the psychological
and cultural impact of being unemployed for a long period of time.
5. The long-term unemployed should be trained in skills relevant to
industries in the local area.
6. The option of self-employment should be encouraged and promoted.
42
7. The education programme in schools should be tailored to the
requirements of the modern working environment.
8. A more pro-active approach is required to encourage employers to
take on trainees from the long-term unemployed.
9. Traditional crafts/skills should be preserved and encouraged.
10. Greater assistance should be made available to industry as an
incentive to provide sustainable employment for the long-term
unemployed.
11. IDB should offer grant assistance to inward investors who are
prepared to draw a percentage of their new workforce from the
long-term unemployed.
12. ACE should be encouraged to contribute to the improvement of the
social economy with programmes being directed towards the more
seriously disadvantaged.
13. The 'New Deal' arrangements should be carefully monitored to ensure
that proper training is being provided.
14. LEDU and IDB should be encouraged to examine other European
models with regard to job creation.
43
15. Innovative community led initiatives should complement existing
Government initiatives to help solve the problem of long-term
unemployment.
16. There should be more private sector involvement in the consultative
and job placement processes.
17. The lack of provision of affordable child care should be addressed at
community level in association with employers and Government to
release potential employees into the labour market.
18. 'Welfare to Work' should be tailored to the particular structural
needs, socially and geographically, of unemployment in Northern
Ireland.
19. The 'New Deal' should be designed to ensure that there is no
disincentive to the unemployed caused by a 'benefit trap'.
20. The proposed timescale for training existing staff to provide guidance
and advice on the new 'Welfare to Work' programme and for
recruiting and training new staff should not be allowed to affect the
quality of service and advice to the public.
44
APPENDIX A
MEMBERSHIP OF
STANDING COMMITTEE E
(THE NORTHERN IRELAND ECONOMY)
Ulster Unionist Party - Mr D Nesbitt - Chairman
Mr R Stoker
Mr J Clarke
Mrs M Steele
Democratic Unionist Party - Mr St C McAlister - Vice-Chairman
Mr S Wilson
Mr W Snoddy
Mr M Carrick
øMr E Poots
Alliance Party - Mr S Neeson
Mr S McBride
*Mr P Osborne
NI Women's Coalition - Ms M McWilliams
*Ms N Heaton
Labour - Mr M Curran
*Mr W White
*Mr M Dummigan
Ulster Democratic Party - Mr G McMichael
*Mr D Adams
Progressive Unionist Party - Mr H Smyth
*Mr B Hutchinson
* attend the Committee on behalf of the party under Rule 14(4)(a) of the
Forum Rules of Procedure.
45
ø attended the Committee on a number of occasions on behalf of
Mr S Wilson.
46
APPENDIX B
NORTHERN IRELAND NEW DEAL TASK FORCE
Chairman: Bill McGinnis OBE, Sperrin Metal Products Ltd
Employers: Mary Donelly, Short Brothers plc
Karen Hargan, Desmond & Sons Ltd
Howard Hastings, Hastings Hotel Group
Trade Unions: Jim McCusker, NIPSA
Jim McKeown, NATFHE
Voluntary: Paddy Doherty, Derry Inner City Trust
Rev Harold Good OBE, NIACRO
Quintin Oliver, NICVA
Alan Watt, WISE Group
Environment: Brendan McSherry, Northern Ireland 2000
Education: Raymond Mullan, Newry/Kilkeel Further Education
College
Youth: Jason Caldwell, Northern Ireland Youth Forum
Ian Walters, Chief Executive of the Training and Employment Agency,
Mr Peter Holmes, Deputy Secretary at the Department of Education and
Ms Mary McKee of the Youth Council will serve as ex-officio members of
the Task Force.
47
APPENDIX C
DISTRICT COUNCILS ASKED FOR VIEWS ON LONG-TERM
UNEMPLOYMENT CONSULTATION DOCUMENT
1. Antrim Borough Council
2. Ards Borough Council
3. Armagh City and District Council
4. Ballymena Borough Council
5. Ballymoney Borough Council
6. Banbridge District Council
7. Belfast City Council
8. Carrickfergus Borough Council
9. Castlereagh Borough Council
10. Coleraine Borough Council
11. Cookstown District Council
12. Craigavon Borough Council
13. Derry City Council
14. Down District Council
15. Dungannon District Council
16. Fermanagh District Council
17. Larne Borough Council
18. Limavady Borough Council
19. Lisburn Borough Council
20. Magherafelt District Council
21. Moyle District Council
22. Newry and Mourne District Council
23. Newtownabbey Borough Council
24. North Down Borough Council
25. Omagh District Council
26. Strabane District Council
48
RESPONSES RECEIVED FROM
DISTRICT COUNCILS
C(1) Ballymena Borough Council
C(2) Banbridge District Council
C(3) Coleraine Borough Council
C(4) Cookstown District Council
C(5) Craigavon Borough Council
C(6) Down District Council
C(7) Larne Borough Council
C(8) Lisburn Borough Council
C(9) Moyle District Council
49
APPENDIX D
OTHER ORGANISATIONS ASKED FOR VIEWS ON
LONG-TERM UNEMPLOYMENT CONSULTATION
DOCUMENT
1. Belfast Centre for the Unemployed
2. Bryson House
3. Confederation of British Industry (NI)
4. Enterprise Ulster
5. Fermanagh Community Work Programme
6. Lenadoon Community Forum
7. NI Association of Community Based Training
Organisations
8. NI Chamber of Commerce
9. NI Committee of Irish Congress of Trade Unions
10. NI Council for Voluntary Action
11. NI Federation of ACE Schemes
12. NI Growth Challenge
13. Strabane and District Community Work Programme
14. Ulster Community Conference
50
RESPONSES RECEIVED FROM
OTHER ORGANISATIONS
D(1) Bryson House
D(2) Confederation of British Industry (NI)
D(3) Enterprise Ulster
D(4) Fermanagh Community Work Programme
D(5) Lenadoon Community Forum
D(6) NI Committee of Irish Congress of Trade Unions
D(7) NI Federation of ACE Schemes
D(8) Strabane and District Community Work Programme
51
NORTHERN IRELAND FORUM
FOR POLITICAL DIALOGUE
_____________
STANDING COMMITTEE E
Thursday 25 September 1997
_____________
MINUTES OF EVIDENCE
Mr G Loughran (Department of Economic Development)
Mr I Walters (Training and Employment Agency)
on
LONG-TERM UNEMPLOYMENT
The Chairman: First of all, thank you very much for coming. This has been a rather
long-standing engagement and a lot has happened since we first thought of meeting with you to
discuss these matters.
This is one of these rooms where everything we say is recorded and held in evidence
against us, as they say. The meeting is also open to the public. You received a letter giving some
indication of what we wished to discuss. We have produced an interim report — I emphasize the
word “interim” as it was drawn up indicating our conclusions rather than the in-depth analysis
which we would like to build in to our final report. Then we had some months off at the time of
the Westminster election. We had just got back into it again when we had the summer recess.
We are now hoping to draw together a final report.
In the meantime, before we commence the discussion this morning, if you have any
comments regarding our interim report it would be very much helpful and very much appreciated.
We will see where the conversation flows from that and then we ask you to take questions from
around the table.
Have you any general comments about the interim report?
Mr Loughran: Yes, we would like to make some general comments.
52
May I start, first of all, by thanking the Committee for the opportunity to talk with you
this morning. We welcome the Committee’s interest in this particular subject and its very good
response to the Agency’s consultative document. I am going to ask Mr Walters to deal in a little
bit more detail with your response. I think your approach is a very sensible one. You have
avoided the temptation to believe that there may be some panacea for dealing with problems of
long-term unemployment. There is none of course, and you have recognized that this is a very
complex subject.
There is no such a thing as a homogeneous group of long-term unemployed people. You
have people who are unemployed who are different in various ways, with different problems and
different characteristics. In your interim report you have recognized that fact and brought
forward a series of what I would regard as very sensible proposals for a range of measures.
Given that we are not talking about homogeneous groups of people, it is obvious that a range of
measures is necessary.
Mr Walters: Thank you, Mr Chairman, for allowing me the chance to come back to talk
to you again. The last time I was here we were talking only about one particular aspect of this
subject.
The whole subject of long-term unemployment is one which occupies a major part of the
Agency’s time and the allocation of resources. We are spending about £40 million on provision
for the long-term unemployed this year. To some extent the consultation document which we
published this year and to which, as Mr Loughran has said, you very kindly and very
constructively responded has been taking place against a changing background. The consultation
document was prepared and launched under the previous Administration. Since then, of course,
we have had a general election and a new Government which has brought forward major
proposals under the heading of Welfare to Work — alternatively titled the New Deal. We are
heavily engaged in that. Incidentally, the Northern Ireland New Deal Task Force is meeting for
the first time this morning. I have just left that meeting to come here. There is a massive amount
of work going on in that field. But it does set our approach to the question of long-term
unemployment in a somewhat different context.
The other change, of course, is that the economy of Northern Ireland has continued to
perform well with unemployment falling and employment increasing. The number of long-term
unemployed in August 1996 was 45,000 approximately and that had fallen to just over 30,000
by last month. Those are perhaps the principle changes — although not the only changes —
which are going on and against which work on long-term unemployment is going forward. To
some extent our work on long-term unemployment and the review has been partially overtaken
by Welfare to Work and the New Deal. At the moment our approach is to get the New Deal as
settled as we can. Then we will aim to complete the work on the review and mesh future,
additional provision for the long-term unemployed with the New Deal.
53
Coming specifically to your response, I would be happy, if you wish, to go through your
recommendations in detail and respond to each one of them. If you do not want to go into that
kind of detail now, I would be very happy to write to you after this meeting.
The Chairman: If you could write to us it might be easier. I am mindful of time and the
wider discussion we wish to have. If that is not too difficult a task — and I mean that genuinely
— how long would it take you to do that so that we could build that into our final report?
Mr Walters: I could do that within a week.
The Chairman: Much appreciated.
Mr Walters: Suffice to say, I do not think there is any great difference between us. We
accept, either in whole or at least in part, just about every recommendation; many of them are
covered, in terms of the actions that you are suggesting, by actions which are being taken in the
context of the New Deal.
The Chairman: As I said earlier, that interim report is really just a list of
recommendations. They are neither prioritized nor dealt with in great detail. We appreciate, as
you indicated to us, that it is not an easy problem.
Mr Loughran: There is one area which I do not think we can specifically deal with and
that is the whole question of the benefits trap. As you know, social security benefits are not a
matter for the Department of Economic Development, but if you wish us to respond to the
benefits issues, I think it might take a little bit longer.
Mr Walters: On that question my response would be that, as Mr Loughran has said,
there is not a great deal that we and the DED can do about that. Of course, the Government have
said that they want to look at the whole benefit structure. The principle of parity between
Northern Ireland and the rest of the United Kingdom has applied and I am not aware of any
thinking which would change that. But I would have thought that this whole question of the
benefits trap, which, of course, affects not just Northern Ireland but also affects other parts of
the United Kingdom, may come out of the work which is being taken forward in London.
The Chairman: We have discussed the benefit trap in deliberation. Before I ask Mr
McAlister to kick-off with a question, were you indicating, Mr Hutchinson, that you wished to
make a comment?
Mr Hutchinson: In relation to the benefit trap, I think it is part of the
Department of Economic Development’s responsibility. We are talking about jobs
which pay low wages or part-time jobs. What I am interested in hearing
Mr Walters saying is that if you look at the drop in unemployment rates it has not
really done anything in relation to poverty. That suggests to me that they are either
54
part-time jobs or jobs which pay low wages. This is problem that we have. Therefore, I think
that the DED needs to be looking at that in terms of the types of jobs that are encouraged. That
was what we mean when we talk about the benefit trap. What we are saying really is that the
DED has a responsibility in terms of levels of wages and whether, in turn, those levels of wages
can deal with the other issues like poverty.
Mr Loughran: I take that point. We are not trying to escape the
responsibility of dealing with the problem of the benefit trap. It is outside our
scope to deal with benefits per se, but we recognize the problem. We have done
quite a lot of work on this ourselves to try and identify the extent to which there
may be a disincentive to people who are unemployed. It is probably true to say
that we are looking at people with a number of dependents. That is where the
impact seems to fall most strongly and there is a problem there. As Mr Walters
has said, this is something which, increasingly, the Government is recognizing and
are seeking to deal with.
Having said that, while it is true that quite a lot of new jobs might be
part-time, it is also true to say that there has been a considerable growth in
full-time work in recent years. The IDB has generated 16,500 new jobs in the last
three years, LEDU has generated 10,000 new jobs in the last three years and all of
these jobs are full-time jobs rather than part-time jobs. We do not deal, as you
know, with, for example, the retail business — that is outside DED’s scope. If
you look at the performance of the manufacturing sector, which is almost entirely
made up of full-time employment, there has been a remarkable growth in
manufacturing employment in the last three years from just under 100,000 to
104,000. This is almost against the rub, as it were, because, as manufacturing
output has increased in recent years, that has tended not to be accompanied by
increases in employment but rather by increases in productivity and the
introduction of new technology in place of people. Manufacturing employment
expanding, in any jurisdiction, is an interesting achievement and particularly so
here to see the number going up for the first time.
While I am not denying your point that there can be a problem with
part-time work and benefits, we are trying to look at the performance of the
economy overall. I think there has been a significant growth in full-time
employment as well.
The Chairman: The only comment I would add there is that the full-time
growth along with part-time in the growing economy — and we are the second
most rapidly growing economy as a region within the United Kingdom — has
affected only the short-term unemployed. That level is down to the United
55
Kingdom average, so that is where the slack has been taken up. Long-term
unemployment here is still dramatically different from that in the rest of the United
Kingdom. It is down from 45,000 to 30,000 but that is relative within Northern
Ireland. Our relative long-term unemployed position within the United Kingdom
remains unchanged. Therefore, that is the bit we wish to address.
Mr Hutchinson: While I accept everything that Mr Loughran has said,
there are two important points which need to be made. First, the biggest urban
area within this country is Belfast. Everybody recognizes that and we need to be
dealing not just with Belfast but with other areas. From the figures you quoted
7% of inward investment has gone to Belfast. That is a very small percentage
and it has created very few jobs.
Secondly, the last study done of IDB and LEDU jobs proved that the
lifespan of those jobs is 2·8 and 3·4 years — they disappear after the grants
disappear. We need to be looking at this in a holistic picture. From my point of
view — and I think that we have had this discussion — we need to be making
sure that we actually invest in indigenous companies to help them grow and not
just promote inward investment and so forth until you get it right. I think that we
went too far inward rather than going in the opposite way to indigenous.
Mr McAlister: I want to go to Welfare to Work: a really fundamental
question — or a foundation question, as I would put it — is why we have Welfare
to Work. I would like to know whose brainchild it is. We all know that it comes
from a Labour Government but I would like to know if you can say specifically
where it comes from. On one of the ACEs they have used material, survey,
information, and the reason why I ask that part in the question is that this
Committee has been alarmed to find that both government departments and even
the Government themselves have made changes or proposed changes without any
relevant information or up-to-date information. That has astounded us. So I want
to know who was consulted. What is the prime motivator for change. Is the
journey really necessary? How is the £140 million to be broken down? Is it by
type of scheme, by age group, year by year or has that, in fact, been agreed at this
stage? We would like to have a basic understanding of what you understand
Welfare to Work to be, where it is coming from, what it will be and where it is
taking us.
Mr Walters: The idea of Welfare to Work has come from the
Government. The programme was trialed prior to the election. The present
Labour Government (then in opposition) considered 18 to 24-year-olds to be the
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lost generation. The Government is very anxious to get people who are out of
work in this target group — of whom there are a great many throughout the
whole of the United Kingdom, and particularly in Northern Ireland — into jobs,
and the Government has set out this Welfare to Work initiative as one of its top
priorities in achieving this aim of getting them back into employment. The
Government has been informed by data from research conducted by the Labour
Party prior to the election, and by various studies on long-term unemployment, on
the problems of youth and deprivation and many other such studies which have
been conducted over the years.
Work is presently underway in actually designing the components of
Welfare to Work. A key role has been given to the National Task Force which
has met twice, I believe, in London. Northern Ireland is represented on that Task
Force by the Agency’s Chairman, Bill McGinnis, who also chairs the Northern
Ireland Task Force which, as I said earlier, met for the first time this morning.
That Task Force includes representation from a great many sectors, including
employers, the trade unions, the voluntary sector, and, of course, youth itself.
That work will proceed in the months ahead. A lot of work has been done but
there is much more to do, and so it would be wrong to try to speculate on the
precise shape of that programme when it is rolled out with effect from 1 April
next year.
The £140 million that is available to Northern Ireland as additional monies
has been allocated on the basis of Northern Ireland need, and it is not a provision
which is calculated on a pro rata population. The money will be available over the
life of the Parliament. Judging by past experience, all new programmes take a
little while to work up so I reckon that the bulk of expenditure — although some
money is now available to put demonstration models on the ground between now
and April, and the Minister has announced two or three this morning — will,
realistically, be incurred from the middle of next year onwards.
There are five main components to the new deal in terms of where the
people will go. The first — and arguably the most important — is the Gateway
which will offer 18 to 24-year-olds a period of intensive guidance and counselling
which could last as long as three to four months. The aim will be to get as many
of those young people at the Gateway stage into the jobs which are currently
available. As you know — because we discussed it the last time I was here —
one of the ironies of the situation is that there are companies in Northern Ireland
who are finding it somewhat difficult to recruit people. I believe that this new
programme gives us a new chance to try to match those companies seeking to
recruit with those people — particularly 18 to 24-year-olds — who are looking for
57
jobs. Those that do not go straight into jobs will be offered one of four options:
the figures I am about to quote are approximate and subject to change, so I would
not want you to take these as being absolutely rigid. The aim will be to get
approximately 40% of them into employment through the employer option;
approximately 24% will go into the full-time training and education option which
can be full-time education and training for six months or maybe even up to 12
months, but again I stress we have still got to design the programme; 12% will be
offered places through the voluntary sector option; the fourth option will offer the
remaining 24% an employment position with training in the environmental task
force.
Mr McAlister: Would I be right in saying that the real motivator of this is
this 18 to 24-year-old age group?
Mr Walters: That is the prime target group. However, I must not
overlook the second target group which comprises those aged 25 and above who
have been out of work for more than two years. They will be offered an
employer option. In terms of the sequence of events, we are concentrating at the
moment on the 18 to 24-year-old age group, but work on the 25 years and above
will follow.
Mr McAlister: So those over 25 can be confident that somebody is
interested in them.
Mr Walters: Very much so. Over the last 12 months, we have done some
pilot work with employers in Belfast and also in the north west aimed at getting
the long-term unemployed into employment, and I am pleased to say that we have
had some success. A major part of the pilot has been counselling, forms of
training aimed at trying to restore self-confidence and self-esteem and, to pick up
your point, to encourage people to believe that they can get a job, and that the
labour market and employers have not finished with them.
Mr Loughran: I would just add that the £140 million which you mentioned
is, of course, additional to what we are already spending, so that there is no
suggestion that young people are going to become the exclusive beneficiaries of
such future programmes to deal with this problem. The other point is that the
subsidy that will be available to employers who take on a person over 25 will
actually be higher than that available to employers who take on a young person
between 18 and 25. So in that sense there is a recognition that those who are
older are of considerable importance in the overall scheme of things.
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Mr Carrick: Mr Walters has touched on what I consider to be a very vital
element which is that if the programme is to be successful there must be positive
matching of supply and demand.
I get the impression that addressing the unemployment issue, in terms of the
social and economic impact on individuals — particularly in respect of the
long-term unemployed — is only one element of the equation.
The other side of the equation is of course the provision of an economic
culture, whether it is in terms of inward investment or the expansion of indigenous
business. Do you think that sufficient thought will be given to the second side of
the equation in terms of providing existing employers with the incentive to enter
into the programme wholeheartedly? Is co-operation being sought from existing
employers in a positive manner rather than just marketing some new deal? Are we
really reaching out to the employers, as partners, to get them actively involved.
What measures are afoot to address that?
Mr Walters: The answer is yes, we are.
We have already had direct contact with several major employers. We have
also had approaches from employer-representative organizations who want to get
involved and are ready to support us. For example, I made a presentation on the
Welfare-to-Work programme to the Small Firms Committee of the CBI on
Monday evening. We have been approached — which I think is very encouraging
— by employers who want to get involved. Over the next two to three months,
we will be organizing a series of seminars and focus groups and much of that
activity will be aimed specifically at employers. So, the answer is that I think we
have made a good start in getting employers on board. There is a lot of
enthusiasm and a lot of willingness out there and we will take full advantage of
that.
Mr Loughran: In several recent inward-investment cases we have
negotiated arrangements for employers to recruit a proportion of their work-force
from the long-term unemployed. So, as the labour-market situation improves, it is
easier in a sense to sell that sort of approach.
Mr Hutchinson: Is the aim of the Welfare-to-Work programme to make
people more employable, and, if so, how does it differ from what is already in
existence?
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Mr Walters: Yes, it is. It differs very much from what is already available
through the Gateway provision. The Gateway offers a much more intensive
period of careers advice and counselling, with possibly some pre-employment
training — the kind of training in some of the pilot schemes that I have already
referred to which is aimed at self-confidence and self-esteem restoration. The
training in the New Deal will be much better structured than has been the case in
past programmes, with the possible exception of Jobskills.
Let us remember — as Gerry Loughran has already said — that we are
already well provided for in Northern Ireland in terms of the programmes which
are already being operated, to very good effect. We are encouraged when we
hear that in Great Britain work is going on to devise programmes which are
effectively copies of some that we have already. Take Jobskills, for example,
which is arguably two years ahead of what is available in Great Britain. Jobskills
will provide us with solid experience and information which will guide us in the
New Deal design work I have referred to.
Mr Hutchinson: That is the actual point of my question. We have these
schemes and, if we are going to have another one, will it be better? Will it be
beneficial in terms of making people more employable?
Mr Walters: We certainly hope so. I would be very disappointed if it does
not. That is certainly the objective.
Mr Hutchinson: So would you see the Gateway part of Welfare to Work
as being important?
Mr Walters: Absolutely critical. It is at that stage that we hope that we
can help to change the views of young people, in part, on unemployment. A lot of
people out there think, sadly, that they are never going to get a job and that is due,
in part, to their background.
Mr Hutchinson: How will it be different for those over age 25?
Mr Walters: They will be offered the Gateway as well. As you have
heard we have got £140 million extra provision so the provision available to these
people will be larger and we will be aiming to make it better quality than in the
past.
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Mr Loughran: I would like to mention two things that are new, as far as
we are concerned. As Mr Walters rightly said, we have some pretty good
schemes here — I hope I am not being complacent when I say that but I think
that is demonstrated when you look at the results — but there are improvements
and benefits to be had from the new approach. First of all, there is going to be a
very concentrated effort to deal with 18 to 25 year-olds. We are going to try to
make sure that nobody in that age group is in a position where they are not being
offered something. That is the difference compared to what happens at the
moment in that we offer schemes but we expect people to respond to the offering.
Under the New Deal there will be a much more concentrated, focused effort to
engage 18 to 25 year-olds.
The other distinctive element is that both in the New Deal and in what we
will ultimately offer to the over-25 year-olds there will be a subsidy to employers.
That is not currently being offered in that particular format. That, too, will be
particularly distinctive and will probably engage employers in a way that has not
been the case before.
The Chairman: To bring some of these aspects together, you are
engaging with employers, you have a lot of training initiatives which have been
good, you have Gateway and you are trying to make an improved ‘offer’ to the
long-term unemployed. We met with Paul Gorecki of the Northern Ireland
Economic Council and his view is that the aspect of matching the long-term
unemployed with employers is very important. He quoted an example of 1:35 or
something like that in Sweden, whereas here it might be 1:92, that is 192 or 500
people for one adviser, which is a heck of a lot of people looking for advice. He
viewed that as being very important. It is no use having employers and having
training unless you are matching them. Have you any comment about how you
would respond to that recommendation made by the Economic Council?
Mr Walters: That is a point well made. We have not got down to thinking
in precise terms of how many —
The Chairman: But in principle.
Mr Walters: Yes, but the most important thing is quality. We are not
playing numbers games here. We will make sure that at the Gateway stage we
have got the resources that are needed and that includes additional staff resources,
whether they be inside the Training and Employment Agency or outside, if we
contract any of it out. Those are decisions to be taken. We will make sure that
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there are the resources necessary to provide the service which the Government
has planned on the Gateway aspect.
The Chairman: We accept that quantity can, in a sense, sometimes
provide a better quality service but when you said that the point was well made by
the Economic Council, do you accept that it is a valid point that we do not have
enough advisory capacity for the long-term unemployed to channel them
appropriately? And if so, is that, or will that be addressed?
Mr Walters: The difference is in its intensity. We presently have within
the Agency a resource which is there to advise the long-term employed. The
service that they are getting at the moment is, I believe, a good one; the service
that they will get in the future will be an even better one — a substantially better
one because the period will be that much more intensive.
The Chairman: How would we view it as being better? What sort of
bench-marks would we look for to see that it is better?
Mr Walters: In terms of bench-marks and performance measures — and
I am not trying to duck the question — that is part of the work which remains to
be done. We have to set performance measures so that in the future we can be
sure that this initiative is delivering the results which everyone wants to see. If I
tried to give you an answer on that now I would be speculating.
Mr Loughran: It is true to say that if we are going to provide for large
numbers of 18 to 25 year-olds — and I think we are talking about nine or 10
thousand people who might be eligible for Gateway — and if we are going to
provide for older people who are long-term unemployed that that is
resource-intensive and we will need more people. I think that that is the point you
were making.
The Chairman: Will they be provided?
Mr Loughran: Yes. They will be provided.
Mr McBride: When you talk about the New Deal and its two parts, and
Welfare to Work, how large a part of the total Welfare to Work are these two
sections of the New Deal? Are there more down the pipeline or is this the heart of
it?
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Mr Walters: Welfare to Work and New Deal are, in many ways, one and
the same. Welfare to Work is, perhaps, more overarching because there is a New
Deal for 18 to 24-year-olds; there is a New Deal for those over 25 years old; there
is a New Deal for lone parents and there is a New Deal for the disabled. Work is
continuing in London and it is just beginning to emerge that there will be some
additional provision for lone parents and for the disabled, on top of what we have
been talking about.
Mr McBride: That is what I wanted to get clear.
What implications are there in these schemes, for existing schemes?
Mr Walters: There are a lot of implications. As I indicated earlier, these
are issues which we have to resolve. For example, Jobskills is open to 18 to
24-year-olds and New Deal is targeted at 18 to 24-year-olds; there is scope there
for a lot of confusion. There may be an argument for steering all 18 to
24-year-olds into the New Deal so that everyone can more clearly understand it.
Mr McBride: These are things that still have to be thrashed out.
Mr Walters: Yes.
Mr McBride: Obviously, this is being driven by the national Government,
what scope is there for variation in Northern Ireland, and what consideration have
you given to our particular needs?
Mr Walters: There is a lot of scope. We have been encouraged to think in
terms of being not just flexible but of tailoring the programme to suit Northern
Ireland’s particular circumstances and needs, and we will do that.
Mr McBride: What direction do you think that might be going in?
Mr Walters: It is a little early to say. I do not want things that I am
saying to be picked up as being something which will definitely happen but for
example, and, I must stress, purely for illustrative purposes, if we were to say that
in future 18 to 24-year-olds will go into the New Deal, which means that all 18 to
24-year-olds would go into the New Deal, that would be different. That is the
kind of thing that we are looking at.
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Mr Loughran: You can see the scope for integrating what we are doing at
the present time. Mr Walters has described the various components of the New
Deal; let us take one of them — the environmental work option. We already have
machinery in place for offering environmental work opportunities through
Enterprise Ulster, for example. Look at the voluntary sector which is already very
much involved in ACE and, of course, Jobskills which has become an increasingly
popular choice for unemployed people — and that is very good news when you
look at significant levels of training that are available through Jobskills. So I
would like to think that what we are doing well can be integrated into what will
ultimately be provided.
Mr McBride: The integration of the existing with the new is very much
where the debate is at, and we have a fair amount of scope to do it our own way.
Mr Loughran: I believe that we have. But, as Mr Walters said, there is
still much to be done, and I would like to think that those who are familiar with
what is already being done will encourage us to think in terms of as much
integration as possible.
The Chairman: We met with ACE and they have a very persuasive
argument that it is a social benefit, never mind an economic benefit, to have an
ACE scheme in operation. The ACE federation feels, to a certain extent, that there
is not full enough recognition given to the adaptability of that group throughout a
period of time during which they have changed, modified and tried to reflect.
Have you any comment on that?
My other point is more pertinent. The Economic Council’s view is that
funds should be transferred, for want of a better word, from ACE to others.
They would downgrade the importance of ACE for three or four reasons — the
creaming, the fact that the question was asked “Are you sure we are going to have
the unemployed employable after Welfare to Work?” One of the Economic
Council’s views is that they are no more or less likely to be employable after going
through ACE than without it. One of their arguments was that there had to be
better selective criteria. Have you any comments to help us in that dilemma?
Who might be on the right side of the balance of the argument?
Mr McAlister: I am concerned about the fact that there is a perception out
there that there are various lost generations. This scheme concentrates on 18 to
24-year-olds — and I am not saying that it should not do that — but there is a
feeling amongst people who are unemployed, and that is where it matters, that
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nothing can be done for them. They feel that there might be some hope for that
other generation but that their generation, and others will end up either completely
unemployable or will be filtered off into temporary jobs in the voluntary sector and
the environmental sector which are, generally speaking, lower paid. I am a bit
concerned, like you, that whatever is undertaken in Welfare to Work will actually
bring that about. I am not saying it is designed to bring that about, but I want to
voice my concern now that that is what might happen a year or two down the
line.
Mr Walters: We are seeking to try to avoid that kind of situation. We
recognize the social benefits of ACE, although that was not the main reason ACE
was introduced 16 or 17 years ago. It was introduced to provide an employment
opportunity with some training, albeit limited, for those who otherwise would not
get jobs.
The work that we are doing under the long-term unemployment review is
continuing but at a slightly slower pace because of the New Deal; the New Deal
initiative is centre-stage. The New Deal caters for, as you will understand, many
of the people for whom ACE, the Community Work Programme and also
Enterprise Ulster is aiming. What we are proposing to do — and the Minister,
Tony Worthington, has reinforced that this morning at a meeting with the Task
Force — is to get the work on the New Deal at a sufficiently advanced stage so
that we can come to some conclusions and make recommendations on what
additional provision we should make for the long-term unemployed, based very
much on the long-term unemployment review and the work that has been going
on in looking at the Community Work Programme, ACE and so on. We hope that
there is going to be this extra provision now which should enable us to cater for
those people who fall immediately outside the scope of the New Deal.
The Chairman: My dilemma still remains unanswered.
Mr Walters: Sorry, I did not answer that part of your question. There are
two arguments here.
The Chairman: It is a genuine one.
Mr Walters: It is a genuine one. Both organizations believe very strongly
in the views that they have put forward. I guess the real answer will probably lie
somewhere in between. All of the points have been well made and we will take
them all into account.
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The Chairman: If the answer does lie somewhere in between maybe it is
that ACE should remain — whatever “remain” means — but that the criteria for
admission onto the programme should be tightened. The Economic Council
seems to think that those who go onto ACE are those who are well-qualified
anyway and would, therefore, not gain much. Is it tightening criteria for the
applicability of ACE or is it shifting funds out of ACE to something else? In other
words do we need to re-invent or can we adapt what is already in existence?
Mr Walters: I think we adapt what is already in existence. If you talk to
the Northern Ireland Federation of ACE Schemes, as you have done and as we
have done, they say that, in their view, ACE has to change. That is not an issue.
It may well be — again, it is too early to say — that one of the measures which
will be adopted is that the admission criteria will be tightened but, also, that the
outcomes that we seek from such a programme will be more demanding.
Only 40% of people in ACE go into what is termed “a positive outcome”,
which is either employment, further training or education. That is comparable
with schemes elsewhere but it is not comparable with the best. There are
schemes, for example, in Glasgow which have a far higher success rate in getting
people from the programme into employment.
The Chairman: And yet they are the better-qualified that come on to ACE.
Mr Walters: Well, not always.
The Chairman: Statistics seem to indicate that.
Mr Loughran: There is some truth in that. There is a significant element,
for example, of females returning to work through the avenue of ACE.
The Chairman: I am thinking of one of the tables of the Economic
Council where it indicated the proportion of various qualifications in comparison
with the norm for the community. They had a higher than average qualification
level. If they are then not getting into work something requires adjustment.
Mr Smyth: You mentioned one-parent families. You also talked about
disabled people. Could you explain what you mean by that? It is not just the
mentally or physically disabled. There are many others who, like me, are dyslexic.
I know what I am talking about. There are people who find it very difficult,
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especially today, when things are changing so fast with computerization and so
on; they find it difficult to cope. How would you deal with unemployed people
who may not come up to scratch?
Mr Walters: We will make special provision within the New Deal for
people who have special needs of any kind. As you say, there are so many people
from different groups who have special needs and that is going to be part of the
design work within the New Deal.
Mr Smyth: It is good to hear that.
Ms Heaton: My question related to how the New Deal was going to be
integrated with existing schemes and I think that has largely been answered. If I
may I would like to ask you a supplementary question on the time-frame for all of
this. You said that the focus for now is clearly going to be on the 18 to
24-year-olds and that you will be looking at provision for those over 25 later.
What does “later” mean?
Mr Walters: Well, we are talking of weeks. There is an awful lot of work
to be done. The aim will be to get the provision for the 25-years-old and above
group in place by the spring or summer of next year.
Mr Loughran: There is a danger here that we might inadvertently be
creating the wrong impression when we emphasize that the work is focusing on
the New Deal for 18 to 25-year-olds at this time. What we are doing at the
present time we will continue to do. This time next year there will still be an ACE
scheme. What size and shape it will be, I could not say for sure. We are also
providing a Community Work Programme, as you know, which we started long
before this present initiative as a different way of dealing with the needs of the
long-term unemployed. We will continue to offer training opportunities for people
who are over 25. I do not want the impression to be left that those of us who are
over 25 might be neglected in the future because I personally have a vested
interest in that. But that is not the case.
Mr McBride: What way do you see the funds splitting down in that
context — this £140 million?
Mr Walters: It is not clear yet. It is too early to say.
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The Chairman: You mentioned earlier enhancing training. I know it may
be too early to say, but what have you in mind? Have you any thoughts from the
consultations you have had since your document came out in April as to what sort
of improved training you envisage for the young or for the unemployed?
Mr Walters: Well, the success of Jobskills, if I could mention that, is in
giving people skills, through the NVQ-based system, which employers need and
which they need to get jobs. Our thinking would be that in the future training
should, on the whole — not exclusively, but as far as possible — be based on the
NVQ system. It is for debate as to whether we should go for complete NVQs or
for units towards NVQs — there is argument for that. There is another argument
which says that we should concentrate on what are known as key skills —
literacy, numeracy, problem solving, team working, information technology and
communication. These are the sort of skills which employers repeatedly say are
lacking in the people that they are recruiting. We are building key skills into
Jobskills now and, incidentally, we are again ahead of the rest of the United
Kingdom in that regard. There may be a case for concentrating the training in
future provision in those areas and then allowing employers to continue the
training in the vocational areas that they need. That is just part of the debate that
is going on.
Mr Clarke: A lot of discussion has taken place about targeting employers
in the private sector. What part do you see employers in the public sector playing
in this?
Mr Walters: We do see them playing a part. There was an announcement
in London earlier this week which indicated that the public sector will play a part
in the New Deal and will offer employment places. That is the public sector in the
widest sense. That is yet another block of work which we have to undertake.
The Chairman: You mentioned earlier that it would take a little bit longer
to give us a response on the benefit trap aspect. Is there a possibility of getting a
response on your thoughts on the benefit trap? What do you mean by a little bit
longer?
Mr Loughran: I think that really depends on what comes out of London.
The tail cannot wag the dog. The benefit system is a national system. There is
very important work taking place in the social security department, as you know,
but the outcome of that I could not predict.
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The Chairman: Have you any idea of the impact of the benefit trap in
Northern Ireland among the unemployed, whether it is low wages or whether it is
income support loss?
Mr Loughran: We have done some work on this and we would be glad to
let you see it. I think it will demonstrate, in very broad terms, that there may be
difficulties for an unemployed person who has several dependants. There is no
real evidence of there being a benefit trap in relation to single people or people who
have one dependant, for example. That is a much more difficult case to
demonstrate. If you look at the wages available in, for example, the clothing,
textile, the food and electronic assembly industries which together represent at
least 50% of all manufacturing employment, they offer good, competitive wages
and they should be capable of attracting people into work. But there does come a
point with a family of, say, four, five or six when there may be a problem. That
may be where a lot of the work on the social security benefits will have to
concentrate.
The Chairman: Have you any indication — I do not mean now — of the
numbers affected?
Mr Loughran: We can give you the research we have done on that.
The Chairman: How long would it take? I am not pushing you.
Mr Loughran: We will let you have what we have got. You can have that
in the next week.
The Chairman: Is there any way of helping us by giving us a summary of
your perception of all of that, rather than just firing a big volume or whatever at
us?
Mr Loughran: We will give you what we have got. Interpreting it is
another matter.
The Chairman: That is really what I am asking. Is there any way you
can help us? We are piggybacking you.
Mr Loughran: It is tricky stuff. We will let you have what we have got.
Some of the information is fairly straightforward in terms of understanding it.
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The Chairman: Is it possible that we might piggyback on your services to
help us a little bit?
Mr Loughran: We will see what we can do. Let us put it like this —
when you have got it, you can ask us some questions.
The Chairman: Okay.
If I could mention that we got a fax from NIFAS about the second
imposition of cuts. With the first one there was a 25% cut until March 1998, then
a further reduction in ACE posts. Yet the fax said that it appears that the Training
and Employment Agency has failed to apply the cuts, given the level of ACE
places filled over recent months. NIFAS asked the question “Why did the agency
not introduce a freeze on recruitment between January and March 1997?” I am
just a little confused. Why are you making further cuts when you do not seem to
have implemented some others?
Mr Walters: To make it absolutely clear, there is no in-year cut here.
When the budget for ACE for this current fiscal year — 1997/98 — was
announced late last year, we made it clear at the time that the £29 million
approximately which is available to ACE this year would provide, on average,
approximately 5,200 places. As you know, the Forum — and your Committee, in
particular — has received representations from ACE schemes.
I would like to think that we have worked very hard to try to manage the
reduction in the least painful way possible. We have tried to be flexible. We did
not impose a freeze in trying to co-operate with schemes which had heavily
criticized the imposition of a freeze when ACE was cut the previous year. We
took their representations of the previous year very much into account and we did
not impose a freeze. We indicated that we would expect the reduction in ACE to
be achieved on a gradual basis to get us down to the average number, as I say, of
5,200 places this year. What happened in practice was that there was very heavy
recruitment into the ACE scheme before the start of the financial year, and the
reduction that we require has not taken place as quickly as we need it to. The
latest figures I have, which may be a week or two out of date now, show that we
have about 5,800 people in ACE. We do not have the budget to fund that number
of places, so we have to get it down. The freeze is prudent financial management
to live within the resources allocated to the programme.
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We have talked to NIFAS and we have been very open with them and told
them the problem. They have indicated to us that they were aware of it. We have
indicated that, unfortunately, we see no alternative but to apply a freeze to get us
down to the level which, as I say, was planned before the year started.
The Chairman: That was the level you were hoping to get to in April
1997.
Mr Walters: That is correct.
The Chairman: But that has not happened and you are hoping to achieve it
by April 1998.
Mr Walters: We have to achieve it before then. We have to get the
numbers down to a level which is commensurate with the budget allocated to the
programme.
The Chairman: And you wish that to be completed in this financial year.
Mr Walters: It has got to be done. We have got approximately £29
million to provide ACE places this year. That means we have to get the numbers
down more quickly than they have been coming down so far. We have to live
within the budget and the action that we are taking is simply prudent financial
management.
Mr McAlister: My party and others are meeting with the Minister in
November and dates have been set to have a meeting on this particular issue at the
Government’s request. I know you will not have some of these structures in
place until April, but when will you have ready what you are going to do? When
do you think you will have that finalized? When will you have the thing mapped
out?
Mr Walters: I will be very disappointed if we did not have the vast bulk of
the work done by January. We have got to have everything in place before 1 April
— and that includes additional staff resources and budgets and systems.
Mr McAlister: When will you have your finished plan?
Mr Walters: It is difficult to be precise — end of this calendar year or
early 1998.
71
The Chairman: If I may just summarize what we have agreed. Mr
Walters, you will give us a summary of your response to our various elements of
the interim report. Mr Loughran, you will give us, as best you can, a concept of
the benefit trap and if we wish we can come back to you on that. We wish to
bring together all of the various facets of the deliberations we have had into a final
report that has some meaning and that reflects the various discussions we have
had and the various people we have met. There are some tensions. I do not mean
outward tensions; I mean mental tensions. We have to weigh up what ACE might
be saying, what the Economic Council might be saying as to whether or not you
are building in ACE or getting rid of it or changing funding, where Welfare to
Work fits in, how you will ensure that Welfare to Work will provide those who
are unemployed with a greater potential to be actually employable. We are
wrestling with this, and, as you rightly say, it is an on-going process. We want to
try to build our comments on Welfare to Work into our report. So that is where
we are. Thank you very much for coming. No doubt we will meet again. Thank
you.