23 June 2008

Rt Hon Stephen Timms MP

Minister of State for Employment and Welfare Reform

Social Firms conference

Whiteknights Park, Reading University

Monday, 23rd June 2008

[Check against delivery]

 

Social Firms Conference

I am delighted to be here – thank you for inviting me.

I have had the chance to get a sense of the contribution Social Firms can make in supporting disadvantaged and disabled people into good quality, sustainable jobs, through visiting, in April, Café Nova Interchange at Elephant and Castle with Sally.

I welcome that contribution, and I hope we shall be able to do more to take advantage of it in the period ahead, and the fact that David Dreed and I are both here underlines recognition at DWP of potential over the next 5 years.

Reforming welfare

I want today to set out Government plans for reforming welfare, to help people who are distant from the labour market today into jobs, to provide financial security for themselves and their families. It will require us to work in new ways with partners like social firms. And picking up Kevin’s point I want to highlight that skills development will play a central role in our plans.

The welfare state has a simple mission: to improve life chances. To give people the help they need to be independent. That means work for those who can, and security and control over their lives for those we won’t expect to work.

In the last ten years, we’ve made good progress. You may have missed the headlines – because there weren’t any – but last month the employment figures showed a new record number of people in work in the UK – 29.55 million, the highest figure ever.

Now we want to do more to take advantage of this opportunity and help those who have not been able to enjoy the gains of work in the past. Indeed in particular people have been out of work for a long time. We have an unprecedented opportunity because of the strength of the UK labour market. And like you, we know just how important it is for someone to have a job:

• that it improves health and quality of life
• that it gives their children a better chance in life
• as well as making them better off.

We need more people with the right skills and support to move into and progress in work.

So we are going to personalise the service we provide, freeing up specialist providers from the private and voluntary sectors.

Under the Department’s new Commissioning Strategy, providers will be able to tailor their approaches to the needs of the individual. They will be rewarded not just for getting people into a job, but for getting people into a sustainable job.

We won’t be telling them how to do their job, but hold them accountable for what they achieve. Providers will have incentives to deliver, with longer contracts and a growing market, but in return we will set our expectations high – and we want more innovation and imagination in provision as a result.  

We developed the Commissioning Strategy because the current environment does not 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.

We want more strategic relationships with providers who share our objectives. We want stronger 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.

I see a potentially large contribution from social firms. There will be a limited number of prime contractors with large, regional contracts, but we want them to enter into sub-contracts with others who we will encourage and support to flourish and develop.

We are 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 Commissioning Strategy, and its initial conclusions are expected next month.

We want to ensure smaller, local providers including social firms, who have the capabilities we need and who perform well, have every opportunity to contribute to the Flexible New Deal. I hope you will pursue these possibilities with potential prime providers.

Building Skills

Skills are a key issue in our work on employment at the moment. We want now to move towards joint commissioning of employment and skills provision, with a focus on developing people’s skills and employability, so that they not only get a job, but stay in work and progress.

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. Suppliers have found it confusing and unhelpful. So we will converge our funding with LSC funding. We have started a 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 support.

Having a skilled workforce is an economic necessity, but it’s also a very good way of encouraging people to achieve independence and confidence.

We are introducing a new integrated employment and skills service in England in 2010/11, with pilots beginning in September in the West and East Midlands, and the South East.

We know we have to improve the way the system works on the ground. We want to make it less top-heavy, devolving responsibility to collaborative partnerships with employers. We want to pursue new opportunities for working more closely together at a local level.

Opportunities for social firms

Here is a real opportunity for social firms. We must work with providers and partners who can deliver the best services to our customers, drawing on programmes like Access to Work and Workstep. In many cases they will be highly specialised, delivered by high quality specialist organisations.

You are the people who come into daily contact with the people who are furthest from the labour market, who we need to reach. You can judge best the local solutions needed for local problems.

Conclusion

The welfare state should foster independence, supporting people to let them take control of their lives. It must be there when people need it, but it must also enable them to have the autonomy and control over their own future that is so vital for their own well-being, and that of their families.

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 welcome the contribution of social firms, and of social enterprise more broadly to achieving these aims, particularly in supporting those hardest to reach but with much to give.

We’ve recently agreed to attachment of a social enterprise ambassador to our department to look at what more we can do to gain from social enterprise.

I hope we can work together in the period ahead to extend the opportunity of a job to many of those people who have never had that opportunity in the past.

Thank you.