8 July 2008
Rt Hon Stephen Timms MP
Minister of State for Employment and Welfare Reform
South East England Development Agency (SEEDA) Regional Employment Skills Summit
SEEDA Regional Employment and Skills Summit, Gatwick Sofitel
Tuesday 8 July 2008
[Check against delivery]
I am delighted to be here with Jonathan and Norman. I am also delighted to see so many people here. I want to express thanks to Jim – and to commend the success of SEEDA in helping to unleash the economic potential of the South East, with very impressive regional economic growth for the benefit of every business and every resident.
My department is increasingly working through regional and local institutions to customise the back-to-work support we provide for the conditions in specific local labour markets. City Strategy Partnerships in 15 cities around the UK have led the way in testing this approach, successfully bringing together local authorities, Jobcentre Plus, regional bodies and others. And the Local Area Agreements published a couple of weeks ago between local and central Government will join up public services more effectively and allow greater flexibility for localised solutions. And we are supporting those approaches because we are convinced they will enable us to be more effective in helping more people back into work.
The skills vision
Last month we launched ‘Work Skills’ – a joint publication of my department with the Department for Innovation, Universities and Skills. It sets out our vision for employment and skills. It’s a vision with high priority in Government. It represents a major challenge, and it requires a great variety of stakeholders all to play their part.
Regional Development Agencies have long been advocates of skills development. In the past, however, Jobcentre Plus could be criticised for taking the view that its task was accomplished once somebody was in a job. Today we recognise we need to go further – we recognise the importance of helping people not just get a job, but stay in work, and progress. So our welfare reform policy is now firmly focused on the need to tackle the lack of skills.
Nobody understands better than you do the intensity of the growing pressure that enterprises in Britain are facing from competitors overseas. You have recognised the need to develop people’s skills so they are ready to meet this challenge.
We have made great progress. Everybody is focused today, for wholly understandable reasons, on the economic uncertainties ahead, but the most recent employment figures show more people in work in Britain than ever before – 29.55 million. We have never had so many people in jobs. There are now 1 million fewer people on out of work benefits in the UK than there were in 1997 – just under four and a half million now as opposed to five and a half million then, a drop of 20% in the rate of worklessness. 11.2% of the working age population are today on out of work benefits – and you have to look back more than 25 years to find a rate which is lower. And 1.75 million people have improved their basic literacy and numeracy skills in England since 2001.
The biggest barrier to full employment is now the shortage of skills among the unemployed and inactive. Lack of qualifications holds people back in the labour market – a disadvantage often compounded by other barriers to work. We need to get better at identifying unemployed and inactive people who would benefit from skills training, especially those for whom it is necessary in order to obtain good quality, lasting employment.
Developing our skills base is key for competing in the global economy. But it also helps tackle family poverty – it is a very good way of encouraging people to strive for a better life. I agree with SEEDA about the need to tackle the pockets of deprivation that exist alongside the economic wealth in this region – pockets where unemployment is at its highest.
And you are also right to recognise that, as well as a route out of poverty and benefit dependency, employment and training programmes can lead to healthier lives.
So what we need to do is to ‘unlock the talent’ of every person in our country, an approach that will require a more personalised approach – identifying the specific circumstances of those out of work and those without skills, and then providing the support necessary to help them into work and to progress in work.
Integrated Employment and Skills (IES) – adult advancement and careers service
That need for a more personalised service is key to our proposals for the new ‘Integrated Employment and Skills’ service. It will bring together employment support with skills support – so that someone going to a jobcentre for help with getting a job will also be able to find out how to improve their skills.
An adult ‘careers and advancement service’ will support both those in work looking to progress in their careers, and people who are currently out of work. It will provide a comprehensive service – drawing together advice and support on jobs, skills, financial issues, childcare, housing and personal issues, to address the broad needs of the people it aims to help.
Pilots to test the ‘Integrated Employment and Skills Service’ will start in September, and will include skills screening for all new benefit claimants, and the introduction of individual Skills Accounts. The results will help to inform the national roll-out of the service which we intend should be nationwide by 2011.
‘Work Skills’
We think that being prepared to tackle your skills needs should be a condition of receiving out of work benefit. So last month we announced in ‘Work Skills’ that we are taking powers to require unemployed people to address their skills needs, to ensure they are employable and well equipped to progress in work.
‘Work Skills’ also set out how our skills systems will engage with Local Strategic Partnerships and with the Regional Development Agencies.
Welfare Reform Green Paper
And following on the heels of ‘Work Skills’, our welfare reform Green Paper will be launched in the next couple of weeks, setting out a range of options to reduce welfare dependency and support more people into work. It will build on the promises in ‘Work Skills’, with the aim of creating a system of support which is optimised for the modern labour market. I do hope you will read it and let us know what you think in response.
Employers as stakeholders – Government/employer deal
Because we simply cannot achieve a successful employment and skills service without the wholehearted involvement of employers.
It is encouraging that we are seeing more businesses – as well as more individuals – recognising their responsibilities for raising the levels of skills. We want every business to do so, and we recognise that means they must know that Government for its part accepts its responsibilities too.
In January, the Government set out its plans in ‘Ready to Work, Skilled for Work’ where we launched a new deal between Government and employers. New duties were placed on individuals to get the skills they need and to look for a job. And for employers – their part of the deal is to help us to match benefit claimants with the jobs they have to offer.
Local Employment Partnerships, with Jobcentre Plus are a key vehicle for this Government–employer deal. And our work with employers is not just about getting people ready for work, but that their skills develop once in work too.
Let me just give an example from a different region. In February I visited the Nissan plant in Sunderland – the most productive car plant in Europe. They had just decided they were going to start a third shift, so they could run their production line round-the-clock. That meant they had to recruit 800 new staff. They signed a Local Employment Partnership with Jobcentre Plus – and the target was that at least 120 of the 800 would be disadvantaged jobseekers – by which I mean that they were either people on incapacity benefit; or people who had been out of work for a long time; or they lived in a neighbourhood with very high unemployment; or they were a lone parent.
The third shift started work last week. They have appointed over 800 new staff – and 276 of them are in fact from one of those four disadvantaged groups – more than twice the target. Because it has turned out that 250 disadvantaged jobseekers – people on incapacity benefit, people who far too often have been written off in the past – have in fact, with just a little extra help, turned out to be just the kind of people you need if you are running the most productive car plant in Europe. And we celebrated that success and others at the first Local Employment Partnership (LEP) national awards last week. 12,000 people have got into work so far through the Partnerships – but we are committed to getting that number up to 250,000 by the end of 2010. And it’s an important opportunity in this region where recruitment can be so hard.
Another part of the deal includes the Skills Pledge. Employers joining a LEP are encouraged to sign the Skills Pledge – a voluntary, public commitment made by employers to support all employees to develop their basic skills, and work towards relevant qualifications to at least Level 2. And for many in the South East, it is the basic skills of numeracy and literacy which are required.
Additionally, in England, employers are able to 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, matching training needs with training providers and advising on whether Government funding is available to help.
Employers and the developing infrastructure
The new UK Commission for Employment and Skills, which ‘started business’ in April and is chaired by BT’s Sir Michael Rake, brings an unprecedented level of employer representation to development of employment and skills infrastructure.
And employers will have a role in developing qualifications through a reformed network of employer-led Sector Skills Councils, which the Commission will oversee. My department is keen to engage the Councils’ expertise on skills as part of our back to work help, as well as for job and career progression.
Conclusion
So, notwithstanding current challenges in the world economy, we have a firm foundation for a strong employment and skills system – and a strong Government and employer partnership which will enable us to become world class on skills.
We need employers to be open to the potential of disadvantaged workless people as employees, to be willing to give them a chance. In the enterprising South East that includes SMEs in particular. I am meeting more and more small firms including firms who have never previously used Jobcentre Plus for recruitment, who are saying that through these partnerships, Jobcentre Plus is able to provide a far better service than in the past, understanding the needs of individual employers and meeting them much better. If you haven’t already, take another look at how Jobcentre Plus can help.
And I wish you great success in developing an integrated employment and skills strategy for the South East.
Thank you.
