03 June 2008

Rt Hon Stephen Timms MP

Minister of State for Employment and Welfare Reform

Improving ethnic minority employment shared commitment

Ethnic Minority Foundation, 2 Millbank

Tuesday 3 June 2008

[Check against delivery]

I am delighted to be here – thank you for inviting me. As Minister for Employment, as Chair of the Ethnic Minority Employment Task Force and as MP in one of the most diverse constituencies in the country, I see it as crucial that we do better on ethnic minority employment. 

Let me, first, recognise the value of the Ethnic Minority Foundation’s contribution.

As Krishna Sarda has said, the Foundation’s proposal to build on the pilot programme by supporting 10,000 Muslim women into work will have a big, positive impact . It will make individual women better off and help them play a full part in society; and it will help tackle child poverty and improve the life prospects of whole families. I will be very interested in a report of this afternoon’s discussions. 

R ecent research from my Department on Pakistani and Bangladeshi women’s attitudes to work and family helps dispel the myth that Muslim women are not willing to take their place at work. The point was reinforced in a forum my Department and the Equal Opportunities Commission held with black and Asian women last year. The discussion revealed how stereotypes about what women could and should do were holding women back. Issues of confidence were also brought up. And women expressed widely felt concern about balancing work and family life. We are commissioning more work in this area and I am glad the Foundation is taking up these important issues. 

DWP’s commitment to narrowing the gap

Bridging the  large and persistent ethnic minority employment gap is not a simple issue, nor are there simple answers. Increasing ethnic minority employment is a complex, long-term challenge.

Over the last 10 years the ethnic minority employment rate has risen from 56.2 percent to 60.9 percent ­– a welcome rise of 4.7 percentage points over a decade. And there has been sustained improvement : the rate was consistently above 60 percent over the last year – the first time on record that has happened. But the overall employment rate has risen too. So, while there has been a reduction in the gap between the employment rate for ethnic minorities and others – it has fallen, and remained, below 15 percentage points – the fall has been small and the gap remains large.

The UK employment rate stands today at 75 percent, so there is a gap of 14 percentage points between the rate for ethnic minorities and for the general population. The gap for ethnic minority women is even larger. The National Audit Office is quite right to say we need to do more. Our aim is in time to raise the employment rate to 80 percent – higher than it has ever been in Britain before – and we can’t hope to do it without doing better on ethnic minority jobs.

My Department’s approach is threefold:

• first, to make best use of our mainstream welfare-to-work policies
• second, supporting specialised services at local level to meet the needs of individual communities
• and third, to tackle head-on the discrimination that prevents Britain making best use of the skills and talents of minority groups. 

Let me go through each of these points in turn.

Mainstream services

We have a very strong UK labour market – more than 29.5 million people in work for the first time ever, and the number of people claiming unemployment benefit down to around 800,000 for the first time since June 1975. That strength is what gives us the chance now to extend the opportunity of work to individuals and communities who have been excluded from it in the past. And we are determined to take advantage of that opportunity for people in the ethnic minority communities.

We need to maintain a strong macro-economy. Ethnic minorities suffered particularly badly from boom and bust in the past. After the 1987–89 boom ended, the ethnic minority employment rate fell from 62 percent to 51 percent, and the employment gap widened to almost 20 percent in five years. We don’t want to repeat the mistakes which caused so much harm in the past. Since 1997, all ethnic minority groups have increased employment rates, benefiting from the strength of the economy, and we are determined to keep it that way, notwithstanding the current problems in the world economy.  

The vast majority entering employment each year do so through Jobcentre Plus. But we can’t just assume that mainstream services work for ethnic minorities. Cultural differences need to be reflected in mainstream services.  We are developing the Flexible New Deal for introduction next year, to provide more personalised support and address the diversity of barriers that long-term workless people face. So we will need to call on specialist organisations, experienced in helping people from particular ethnic minority communities get back into work. L ast week I visited Faith Regen and the Black Training and Enterprise Group (BTEG), to talk to them about what more we need to do to ensure employment opportunity is extended further into ethnic minority communities with Flexible New Deal .

BTEG’s Building Futures programme, sponsored by DWP, is an excellent example of an initiative specifically designed around the needs of ethnic minorities in disadvantaged areas of London. And

Faith Regen is the only Muslim led multi-faith charity in the UK. A multi-faith approach allows them to engage with people with multiple problems and from very diverse communities in disadvantaged areas . 

It is important we recognise this expertise by ensuring the commissioning process encourages prime contractors to subcontract with specialist providers. I shall be making sure that prime contractors are aware of my interest in race equality, and encouraging such subcontracting.

Olympics

It’s very important we maximise the opportunities the Olympics will bring to London’s disadvantaged communities . The Olympics – and the employment opportunities it brings – is one of the four named priorities for the Ministerial Ethnic Minority Employment Task Force. At the last meeting the Olympic Delivery Authority (ODA) presented on provision for ethnic minority employment in the run-up to the Games, and how we make that employment sustainable.

I asked ODA to come back to Ministers with regular updates on ethnic minority employment on the Olympic site, and the number of contracts awarded to ethnic minority businesses.

I also asked them to look at setting a specific target for jobs going to ethnic minorities, within the wider target for a 70,000 reduction in London worklessness by 2012 from the Olympics.

Localisation: devolving decisions to local people

Secondly, we have developed a local area strategy. Ethnic minorities disproportionately live in the most disadvantaged areas, like the one I represent and where I have lived in East London for the past thirty years.  Delivering programmes and help through devolving funding to the local level is effective to join up services around the needs of a particular local community. 

Through the City Strategy, we have brought together Jobcentre Plus with other public sector bodies and key partners . The consortia have identified priorities jointly, and brought local budgets together, to increase employment in their areas. 

There are 15 City Strategy Pathfinders around the UK, and all the consortia have signed up to stretching targets to increase employment and reduce the number of people on benefits. They have set targets with a little guidance from the Department; how they achieve them will depend on their local circumstances and the local employment opportunities. The 13 Pathfinders with big ethnic minority populations have also set targets to reduce ethnic minority worklessness. 

It is the right balance between direction from the centre and local empowerment. Local people are best placed to make decisions about their needs and our aim is to provide them with the opportunities.

We also work with local City Strategy consortia on equality issues, asking them to scrutinise representation of ethnic minorities, women and disabled people on their boards and committees. We want good representation of the local population among decision makers and delivery partners.

The funding for City Strategies lasts until next year, but my officials are currently looking at proposals to extend the City Strategy Pathfinders’ operations into 2009 and beyond. 

We are now also working with local authorities to ensure that ethnic minorities benefit from the new £1.5 billion Working Neighbourhoods Fund – a new, cross-Department project, which started in April, bringing together at local level money from the Department for Communities & Local Government with my Department’s Deprived Areas Funding in order to combat worklessness in deprived areas. I am working on this with John Healey, the local government minister. There is a big overlap in coverage with the City Strategy areas – and Working Neighbourhood funding covers over half of the working age ethnic minority population in England. This is of a different order of magnitude to the small-scale outreach pilots it replaces. 

It’s a valuable opportunity to harness local knowledge.  It’s flexible, and  I do recommend ethnic minority organisations to work closely with their Local Authorities to maximise the opportunity and deliver employment opportunities for ethnic minority communities.

Another key initiative with a strong local focus is our programme of Local Employment Partnerships, in which employers are signing up to give a better chance of employment to disadvantaged jobseekers. The partnerships are based on a simple deal: the government for its part, through Jobcentre Plus, gets disadvantaged people ready for work. And in response employers with vacancies give them a fair shot at the job, with opportunities such as mock interviews and work trials, and then mentoring once they have started a job to ensure they can retain it and advance in it. So far, over 10 00 employers, including some of the largest, are committed to working through LEPs.  Our target is that a quarter of a million disadvantaged jobseekers should move into jobs through LEPs by the end of 2010–11.

Discrimination

Thirdly, we estimate that employer discrimination accounts for between a quarter and a half of the ethnic minority employment gap.  We are working with the Government Equalities Office to develop effective ways to strengthen the current discrimination laws. This includes considering the recommendations of the Business Commission, chaired by Gordon Pell of the Royal Bank of Scotland, on race equality in the workplace. In particular, Government will consider their recommendation to include equality conditions within public contracts. And today’s joint report from CBI and TUC on the value of workplace diversity underlines how important this is for our society and for our economy.

We will respond to the Business Commission report shortly, but DWP’s Commissioning Strategy, published in February, commits us to working with organisations who share our commitment to promote equality in the workplace. Potential contractors will be asked about their equal opportunities policies and we will focus on providers who are prepared to work with us to make progress on equality in their own supply chain. Using public procurement in this way could mean between 15,000 and 30,000 more ethnic minority people in work.  

Complementing this, Ministers at the Government Equalities Office are looking at ideas for the forthcoming Equality Bill to advance equality objectives through public procurement.

Women and children – poverty

We also have in the department a programme of pilots on Partner’s Outreach for Ethnic Minorities, aiming to address the issues facing low-earning single-income households by testing ways of helping women into work. Many of the women being helped by the pilots are Muslims, who have the lowest employment rates. T his work of empowering women i s crucial for future generations, as well as key to our programme to eradicate child poverty by 2020.

Conclusion

So the improvements in ethnic minority employment over recent years are only the start. We have a great deal more to do. It is a key strategic challenge: the working age ethnic minority population has risen from 9 percent at the time of the 2001 census to 11 percent today, and we expect this proportion to reach 18 percent by 2018. By 2020, we estimate over half of the working age population will either be ethnic minority, or over 50. 

We already know that a diverse workforce has a range of benefits for businesses. The TUC and CBI report shows that diverse workforces enjoy higher productivity and better staff retention .

So for the good of the economy, and for the good of our society, we need to press on, work together and close the gaps that have persisted too long and which all of us now want to see eradicated.

Thank you.