06 May 2008

Rt Hon Stephen Timms MP

Minister of State for Employment and Welfare Reform

Association of Learning Providers

East Midlands Conference Centre, Nottingham

Tuesday, 6th May 2008

[Check against delivery]

 

I am delighted to be here today – thank you for inviting me. This conference provides me and my department with an excellent opportunity to explore collaboration with Providers and Employers. Officials from the department are leading workshops on our Departmental Commissioning Strategy and on Local Employment Partnerships which I hope will be useful, and I know Graham has already referred to contributions from my colleagues Bill Ramell from the Department for Innovation, Universities and Skills and Phil Hope from the Cabinet Office will be joining you tomorrow.

I want to set out today how in my department we plan to work more closely with partners – both across government Departments, and, through our Commissioning Strategy, with Providers outside Government.  And I also want to highlight today the role we see learning and skills playing in our programme of Welfare Reform – and to acknowledge that that role will need to be a central one if our programme is to be successful.

DWP Commissioning Strategy

In February, we published our department’s Commissioning Strategy, providing a comprehensive account of how we will work with providers in the future.  

Many here helped us with the Strategy, and I want to thank all those who took the trouble to respond to us as we were developing it. We now have a clear direction for the commissioning of employment provision.  

We work with many different organisations, commercial businesses and social enterprises, to deliver the support which people on benefits need. And we want to widen the net of providers further. The Commissioning Strategy commits us to offering bigger contracts, over a longer term, because we think we will in that way deliver a better service to Jobc entre customers. Critically, we’re moving to paying – to a greater extent – by results.  

The Strategy sets out a new approach to sourcing, procuring and managing employability provision. To secure the best possible outcome for every customer, we see private and third sector organisations, alongside the public sector, delivering more specialised support – and we are looking forward to more innovation and imagination in provision as a result. There will be more active customer involvement, so that, in future, the experience of individuals and of employers will help shape our programmes.  

We developed the Commissioning Strategy because the environment does not currently suit our requirements. The market for contracted employment provision is fragmented; it’s driven by process and short-term objectives which don’t always deliver the performance that we want.

The market we want, by contrast, will be based around more strategic relationships with providers and a shared understanding of government objectives. It will have increased links with local delivery mechanisms such as Local Area Agreements, the City Strategy Pathfinders and other joint arrangements in Scotland and Wales.  

Provision will be broader, with less segmentation of customers.  We won’t in future be dividing people up into different groups as the different New Deals have done. We will involve providers early on in developing policy, and we want flexibility in delivery – so that we can offer personalised support and choice to customers. We want to spell out better the capabilities and requirements of providers in a high performing supply chain.

The contribution of smaller providers

The responses we received to the consultation on the Commissioning Strategy were positive, but some concerns were raised about the position of smaller and more specialist organisations, of which I know many are represented here today, around whether they would find themselves at a disadvantage under the new arrangements.  

I warmly welcome the contribution of those organisations to delivering services to unemployed customers, and I readily acknowledge their importance. Many will not have the capacity to be, or indeed want to be, prime contractors, but we do want to encourage and support them to flourish and develop as sub-contractors to the prime contractors.

We want, as part of our current procurement for the Flexible New Deal, to help facilitate this engagement, a s in the events we ran recently across the country to which we invited both potential prime contractors and potential sub-contractors. They were an early opportunity for organisations to come together and begin networking.   

We are also commissioning workshops to help smaller organisations become more aware of the commercial opportunities here, and be in a stronger position to act as sub-contractors.  We’ve established a small consultation group to consider more detailed issues within the Code of Conduct which was published with our C ommissioning Strategy, and its initial conclusions are expected in July.

We want to ensure smaller, local providers, who have the capabilities we need and who perform well, have every opportunity to contribute to the Flexible New Deal. This will also involve working closely with organisations like the Association of Learning Providers, and I welcome the ALP’s role on behalf of its members.

Integrating skills support with employment support

In the past, my department’s provision has been contracted and managed in an entirely different way to the provision of the Learning and Skills Council and others. Suppliers have I know often found this confusing and unhelpful. So w e will be aiming to converge our funding with LSC funding so that we can jointly reward effective providers. We have started a joint project with DIUS and LSC on opportunities for joint commissioning. And contracts will increasingly link with local initiatives such as City Strategy Pathfinders and Local Area Agreements. We want through these initiatives to build the foundation for integrated employment and skills provision.

Skills are a critically important issue for employment. Our aim, picking up the recommendations laid out by Lord Leitch in his report, is a step change improvement in Britain’s skill base.  

That is not something we can do alone. We know that success will require us to work with people like you.  

A highly skilled workforce is an economic necessity, not an optional extra, and the urgency of that necessity is increased by the intensity of the growing pressure that enterprises in Britain are facing from competitors all over the world.  

We have to develop our skills base to compete successfully in the global economy. But there are other benefits too. Improving skills helps tackle family poverty. It is a very good way of encouraging people to strive for a better life; and of increasing social mobility. Those are all very good reasons why we need a step change in our attitude towards training and skills.

Organisations in this conference already have a commitment to training. We want that commitment and excellence to be the norm, across the economy. We are seeing more businesses – and more individuals – acknowledging their responsibilities in bringing about a skills revolution. We want every business to do so. And in Government, we accept our responsibilities in achieving this aim  too.

Establishing the Department of Innovation, Universities and Skills last summer raised the profile of skills in the Cabinet. It helps us transform the lives of individuals, to boost the commercial success of businesses, and to regenerate communities through lifelong learning.

Jobcentre Plus has been doing a good job, in my view – and that is one of the main reasons why the number of people claiming unemployment benefit is at its lowest level for over thirty years. We want now to integrate the effective systems already working in Jobcentre Plus with the skills system, so that when somebody goes to the jobcentre to find a job, they are also able to get help to develop their skills.  

We are in a strong position. A million fewer people are receiving out of work benefits today than was the case ten years ago.  

We have set our sights on an employment rate of 80%, up from around 75% today. The biggest barrier is not a lack of jobs, but a lack of skills among unemployed and inactive people. A lack of qualifications can be a huge disadvantage in the labour market; a disadvantage often compounded by other barriers to work. We need to work harder to identify unemployed and inactive people who would really benefit from skills training.

So w e want to build on the success of welfare-to-work with a highly integrated employment and skills system that can both help people get into work and also help them get on at work, progressing once in a job and looking forward to real prospects. In the past, our employment system has see n its task as finished once somebody is in a job. We know that won’t be good enough in the future.

Last November we published, with the Department for Innovation, Universities and Skills, the paper “Opportunity, Employment and Progression: making skills work” . We set out our commitment to integrate the employment and skills systems. We described out how we intend to work together more effectively so that more people gain training and support to move from benefits into work, and then, once they are in work, to progress.

At the heart of this will be the new Adult Advancement and Careers Service. It will support people who are in work and want to progress in their careers, as well as those out of work, looking for a job. As well as advice and support on jobs, it will offer information on skills, financial issues, childcare, housing and personal issues.  

My department and Jobcentre Plus are currently working with DIUS on a pathfinder approach to test aspects of the integrated system. Pilots will begin in the West Midlands in the a utumn, ahead of a national roll-out of the new service.

The new UK Commission for Employment and Skills came into operation last month to assess UK progress in achieving world class skills with full employment. It’s an independent body and it will also provide advice on how employment and skills services can best work together to deliver an integrated service which is easier to access and provides better solutions for employers and for individuals.

Local Employment Partnerships

We know we need to work closely with employers to unlock Britain’s talent, and create opportunities for those who have been excluded from work in the past. The goal we have set is to help 250, 000 people into work by the end of 2010, and to give them the chance to develop the skills to stay in work and to progress. Local Employment Partnerships (LEPs ) are the vehicle we have designed to deliver this goal, and I am delighted we have over 600 employers committed to working with us so far.

We see Local Employment Partnerships as a ‘deal’ between the Government and employers – a step change in our approach, with Government taking responsibility by preparing people for work – including people who have been out of work for a long time – and partneri ng with employers in a new and more collaborative way.

I was talking recently with someone from a very major retail employer, and she told me she was interested in the idea of an LEP. She wanted to be able to recruit from a wider pool than otherwise, and – for commercial reasons as well as for corporate responsibility reasons – she wanted the staff in a new store genuinely to reflect the community where the store was located.  But she frankly admitted she was nervous about embarking on an LEP. She was worried that the people coming through from Jobcentres would – and she was frank – be ‘losers’.

So I told her about a man I met in Merthyr Tydfil the other week who was recruited direct from Incapacity Benefit for the demanding job of healthcare assistant, working with patients at the local primary care trust.  He had been on Incapacity Benefit as a result of nerves for thirteen years – and you could be forgiven for classing him in that period as a ‘loser’.  

He has now been in his job for two and a half years. He hasn’t been off work for a single day since he started. His health problem has been consigned to history.  He is clearly doing a superb job – as an older man, giving anxious patients confidence. And he kept on saying, over and over again, “ I just wish this had happened years ago”. For his employer, he was a great example of someone who – yes did require a little more effort initially than people recruited conventionally – but who was now amply repaying that effort and had clearly been transformed from loser to winner – and there are plenty more disadvantaged jobseekers just like him, waiting to reward employers willing to give them a chance. And I want to make sure they get that chance.

So this is the deal. The Government, through Jobcentre Plus and its partners – such as the Learning and Skills Council – invests to get disadvantaged unemployed people ready for work.

And, for their part, employers with vacancies give those people a fair shot at the jobs they have available – through their recruitment processes, interviews, work placements, work trials, mentoring and so on.

As employers commit to partnerships, Jobcentre Plus is agreeing specific measures at a local level with them.

Employers joining an LEP are encouraged also to sign the Skills Pledge – a voluntary, public commitment to support all employees to develop their basic skills, and work towards relevant qualifications to at least Level 2.

And in England, employers can take advantage of support through Train to Gain – run by the Learning and Skills Council – to develop the skills of their employees. Train to Gain gives every employer access to a free skills broker service – offering independent and impartial advice, and matching training needs with training providers. Brokers advise on whether Government funding is available to support their training needs.

Conclusion

Full employment; world class skills. These aspirations are a huge challenge, and central to how Britain needs to change in the next few years – central to building a fair society alongside a strong economy. I know everybody here is up for the challenge, and what I would ask is that all of us – Government and providers – work together to achieve these ambitions that all of us share.  

Thank you.