JOB CREATION PROGRAMME

HC Deb 21 June 1976 vol 913 cc1323-34

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]

2.20 a.m.

Mr. Anthony Steen (Liverpool, Wavertree)

We have 1,250,000 unemployed people in this country. They are drawing benefits. Around 40,000 school leavers are without work and 100,000 young people are unemployed. The job creation programme is now costing £75 million, yet only 17,000 people are at work in it and approximately 6,000 of these are young people.

It may be asked, "Why are the numbers involved so small?". I would say that it is because of the artificially high wage being paid to those people in the job creation programme. It is as high as £56 a week, although it is true that the average wage for a 21-year-old is considerably less, around £40 a week. The trouble with this artificially high wage is that it is damaging to people who are working on the programme, particularly young people, because when one ceases to work for the Government he will inevitably earn approximately half the wage he earned under the Government programme.

If the Minister does not believe me he should know that the hon. Member for Cleveland and Whitby (Mr. Brittan) and myself spent a most illuminating day on Merseyside where we interviewed a sizeable number of young people in the job creation programme. We found that not one was earning the same as he earned on the open market before he became unemployed. Most of them, under the Government's scheme, were earning double. Once they ceased working for the Government they would inevitably have to go back on the open market and would find themselves earning approximately half of that which they earned under the Government scheme.

The Government say they must pay the market rate for the job, but what is the market rate for the job when jobs are those which the Government say would not normally be done? One cannot have a market rate if the job is not one which would normally be done. Is it the rate which one could get on the open market? Could it be a NALGO rate?

If one pays artificially high wages, inevitably the money to assist the job creation programme will run out sooner. Although only £55 million of the £75 million has been spent it is true to say that double the amount of work would have been done, and double the amount of people would have been involved, if the wages were half the amount that they now are.

I suggest that the Government should consider reducing the wages, so that they are more in line with those which that person is likely to get if he ceases to work for the Government. Moreover, it is important that other people working for the comparative scheme, the Community Industry scheme, should not be paid a different rate for the same job. In the Community Industry scheme, although the Government say the purpose is different, young people are often doing the same job as young people in the job creation programme. It is immoral for an 18-year-old or 19-year-old to find that if he works in one scheme he is paid one rate and if he works in another scheme he is paid another rate for the same job, such as decorating an old person's home.

One of the explanations which the Government would no doubt give is that the Community Industry scheme is for the socially deprived whereas the job creation scheme is for unemployed people. I would suggest that it is totally immoral to have two different rates of pay for the same, or similar, job.

When the job creation scheme was launched the Government stated: Wherever possible the jobs will be designed to provide some vocational training and will be linked to appropriate forms of further education. In Merseyside I have been at pains to find out how many young people are linked to any education. I have yet to find one job which has any educational training content in it. Perhaps the Minister would advise me on how many of the projects do have some training content?

Secondly, the Government were at pains to stress that the work offered would be relevant to pressing needs, including minor improvements to housing, health and education building. Perhaps the Minister would be able to tell us how many minor improvements have been made and where.

Perhaps the most surprising thing is the number of applicants from the private sector, the non-statutory sector. On my figures, about 60 per cent. of the overall applications have come from the public authorities. This is not surprising because of the supervisory and material costs which have to be borne by the sponsor. Although the Government give 10 per cent, of the overall salary bill to sponsors, that is not nearly enough for private organisations and small community groups, which do not have the spare capacity that the statutory organisations have to fund their plans. Will the Minister right this discriminatory practice, whereby the statutory authorities have advantage over the voluntary bodies? The local authorities can find the money out of the rates but the voluntary bodies do not have spare funds.

But even local authorities find it difficult to operate schemes because of the restricting nature of the criteria against which applications are judged. They complain that the allowance for the non-labour costs should be increased. Will it be? They point out that the requirement that approved projects should be capable of being wound down in three months should be removed and projects allowed to continue to completion. They also say that criteria do not allow for the employment of the unemployed persons at which the programme is directed for jobs in the social services sphere of activity. That means that they are not allowed to employ some people in the inner city areas to help their hard-pressed social services.

Another major criticism relates to the process by which job applications are approved. It is the old familiar pattern of the top dogs with important positions administering a bureaucracy unto the poor young unemployed. Would the Minister see that the action committees are not crammed full of bureaucrats, professors, trade unionists and other civil servants, with the young unemployed person not being involved in the process of which he is the major part? The Government need to give incentives to the young themselves, and base the action committees on the grass roots. Why must they be full of a plethora of officials and remote from the neighbourhood and the locality where the unemployed are?

Finally, a word about the director of the programme. I am sorry to have to raise this criticism of him here, but on a number of occasions he has criticised me publicly and said that he would like my help. On each occasion I have said that I should be delighted to help. But to date, despite my wish to become associated with the local action committee and learn what job it is doing, I have yet to hear from him, although it is three months since he asked me to join such a group.

It would be wrong to burden the Minister even more with my views on this matter, especially after the long debate we have had today. But it is strange that, when over 1 million people are unemployed, the job creation scheme is so inflexible and bureaucratic and so few jobs have been created, particularly as the summer is approaching when the number of school leavers is likely to increase.

It is strange that some of the ideas that I have been promoting for so long have not been seized by the Government as a way of mobilising a sizeable number of young people and people of all ages who will remain unemployed for years to come unless something radical, dramatic and exciting is done of the kind that I have described. Otherwise, I do not know how the Government will avoid having 1 million unemployed instead of 1 million involved in active practical community tasks for the benefit of all.

2.28 a.m.

Mr. Leon Brittan (Cleveland and Whitby)

I am grateful to my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) for his encouragement to participate in this debate.

A number of criticisms have been made of the job creation scheme. One is the short-lived nature of some of the projects. In my constituency it is a matter of astonishment that the project for Task Force North in respect of work on the North Yorkshire Moors and the Cleveland Way, which has been well received locally, should have been brought to an end for no apparent reason. I have yet to hear an explanation. Criticism has been made of it on the basis, if my hon. Friend will forgive my saying so, that it has in volved the introduction into the North Yorkshire area of people from Merseyside, but the actual quality of the work is undoubted.

It is a matter of astonishment that, at a time when Task Force North was ready and had built up a team, it should not be given an extension. That is only a typical example of the many criticisms that have been made of the job creation programme.

Much the most important criticism is related to the financial aspect of the scheme. A substantial amount of money has now been allocated for the scheme and the results, as my hon. Friend has shown, are disappointing in terms of quantity. What is the cause of the fact that in relation to so much expenditure so little good has been achieved? The answer is obvious. It is the high wages that are paid. My hon. Friend referred to the visit he and I paid to Merseyside to see the job creation programme in action. We spoke to many of the people there. It was quite clear to us that if substantially less was paid out under the job creation programme youngsters would be all too happy to come forward and participate.

I do not regard it as harsh or unreasonable to require all able-bodied people who are out of work to participate in a scheme of this kind if they are to obtain the equivalent of unemployment benefit. I do regard that uncivilised or unreasonable. If it is regarded as intolerable, I believe that even if we were to offer only a small amount above the unemployment benefit to people in that situation they would be more than ready, in large numbers, to come forward and do work of this kind, with the result that the community would benefit and far more people would be involved in the scheme than is the case at present.

I raise a broader objection to the scheme as at present constituted. If this programme is a minuscule one, to be regarded as one of a number of palliatives in the face of the current situation, I suppose that we should not cavil so much about the details although we might be disappointed at the lack of opportunity. If we spend substantial amounts of money, as is now becoming the case, we are entitled to ask a further question as to the consequences of so doing. One criteria in evaluating the schemes is that they must comprise work which would not otherwise' be done. If that is so it must follow that the work that is done is of a low order of priority for local authorities.

It is, as we have heard, mostly local authorities that are involved. If that is so, what is the consequence of this action? It means that if we are pouring substantial amounts of money into this scheme we are doing so at the expense of ordinary local authority expenditure. Either we are reducing the amount of local expenditure of an ordinary kind which could have occurred or we are failing to increase it in a way that would otherwise have been possible.

In either event we are preferring to produce short-term work for the unemployed, of a dubious value, both as to training and quality, at the expense of permanent employment for those working for local authorities on a longer-term, constructive and creative basis. If it is just a question of palliatives that may be acceptable. But if we are spending substantial amounts of public money, the scale of things is increased and we have to look at the question in a proper way and ask whether it is preferable to provide these short-term jobs of a doubtful nature for a limited number of people rather than spend the money on adding to employment on an ongoing basis within local authorities.

I believe that that is a conclusion to which we are driven on the present basis of the scheme. If, on the other hand, we were to pay very much less and were still able to attract young people to work in such schemes, far more people could be helped at a far lower cost per head. We would be producing not just a miniscule palliative to a grave social problem but a real opportunity. Those who are involved in unemployment need not face the image and prospect of a society which provides them with literally nothing to do.

If we were able to change the scheme in that way and to extend its scale we would be performing a social benefit. At the moment the scheme is, frankly, a grave disappointment. I very much hope that it will be radically revised in the direction for which my hon. Friend and I have been arguing for some time.

2.35 a.m.

The Minister of State, Department of Employment (Mr. Harold Walker)

The hon. Member for Liverpool, Wavertree (Mr. Steen) is indeed fortunate. In the space of one sitting he has had two bites at the cherry. If I understand his purpose, he is to have a third bite tomorrow and on Wednesday he intends to try to persuade the House to accept legislalation which will have a bearing on these matters.

As we had an earlier debate on the question of youth unemployment, and as the hon. Gentleman spoke in that debate—I greatly regret not being able to hear his speech—I shall try to avoid covering some of the ground which was dealt with in that debate.

The hon. Member for Cleveland and Whitby (Mr. Brittan) said that the job creation scheme had so far made only a minuscule contribution to the solution of the problem which concerns us all—namely, unemployment, particularly unemployment among young people. So far the scheme has provided up to 26,500 jobs. We expect that the budget of £75 million will create in total about 60,000 new jobs. I am sure that both hon. Members will recognise that the scheme is only part of the range of contingency measures introduced by the Government in an effort to reduce the high level of unemployment.

The hon. Member for Cleveland and Whitby asked a specific question about the operations of Task Force North on the North Yorkshire Moors. I do not have the information he sought. I do not know the reason for the premature termination of that project. I am given to understand that it was in response to a request by a local action committee. I will write to the hon. Gentleman about the matter.

The hon. Member for Wavertree said that he has on a number of occasions—in the House and outside—made a number of suggestions and voiced strong criticisms of the scheme, as he did tonight. I shall refer to some of the criticisms that he has made.

The basic rationale of the job creation programme is obvious. It is first, that people without work need jobs and, secondly, that there are a range of jobs within the community which for one reason or another are not done. Job creation also makes economic sense, as the net costs of the scheme, taking into account income tax deductions and savings in benefits which would otherwise have to be paid, are considerably less than apparent costs and some valuable work will be done.

Amongst the hon. Gentleman's other charges was that the scheme is bureaucratic and over-elaborate. It has a budget of £75 million and is administered by a staff of fewer than 120 of all grades throughout the country. To me this hardly sounds like a top-heavy bureaucratic scheme. It is open to any group within the community to propose schemes of community benefit, and in general the commission is prepared to consider any kind of activity. An area organisation, of 10 area teams, has been built up and in this way the commission hopes that it can be responsive to local situations and that good working relations can be established between project sponsors and commission staff. Proposals for projects are considered by action committees made up of local authorities, trade union and employer representatives, and, in some cases, a representative of voluntary organisations as well.

The aim has always been for simplicity, with as few rules as possible, consistent with the spending of public money. The area teams and action committees do everything possible to help organisations devise and set up their projects. Attached to each team there will be two project advisers whose jobs will be to help sponsors design and establish schemes and continue to advise them as projects continue.

Most sponsors are, I think, appreciative of the help they get. One Liverpool sponsor was interviewed by the National Association of Youth Clubs magazine, and asked to comment on his experience of dealing with the bureaucrats. His reply was this: People complain about the Civil Service—they talk of frustrations and delays. My experience in this Job Creation Programme has been exactly the opposite….. Those who are suspicious or frightened of Civil Service procedures can put it right out of their mind as far as Job Creation is concerned. You'll be among friends who want to help you and make a go of it right from the start". To approve funds for nearly 1,000 extra jobs every week and to respond to the wide range of potential sponsors demands an open and constructive approach.

The programme has also been criticised for promoting poor schemes. The aim of the programme is to provide worthwhile work experience, particularly for young people and older workers. It is for organisations and community bodies to propose schemes, and as the programme has developed more imaginative projects have been coming forward. Wherever possible, it is hoped to encourage training and further education opportunities. Many projects are providing valuable on-the-job instruction and some sponsors have arranged for day release classes and other forms of training.

Inevitably, some projects will provide fairly basic work experience, but such schemes offer some choice to young people who would otherwise he unemployed, and experience of work on a JCP project can help young people in a variety of ways. JCP can provide a realistic introduction to the constraints and satisfactions of having a job: it can help young people acquire skills of either a specific or non-specific nature; it can help young people gain a better knowledge of their own capacities, help them gain in maturity, self-reliance and self-esteem, and help widen their communication skills and abilities to cope with adults or peers.

A recent analysis of the JCP work force, made a couple of months ago, shows that 29 per cent. of the labour force had no job since leaving school, and 61 per cent. of these had been unemployed for 14 weeks or more. It is for such young people that JCP offers choice and a positive alternative to the debilitating effects of prolonged unemployment.

As the programme is developing, the range of work opportunities is also widening. Some hon. Members have seen the film which the commission prepared on JCP; it gave an interesting insight into the range of projects which are now under way.

In Wales, for example, a village used for holidays and training courses by many organisations is being modernised; unemployed graduates are helping with adult literacy schemes. In Fife, a group of young people are making and repairing toys for hospitals and social service departments. Young people are working on the restoration of industrial exhibits for Swansea museum and helping preschool play-groups in Swansea. In the Midlands, houses are being renovated and modernised for use by underprivileged families. In Merseyside, allotments are being provided, adventure playgrounds built, help is being given to elderly and handicapped.

I hope that the hon. Member for Liverpool, Wavertree will approve of these projects, because when he wrote his article in The Observer shortly after the programme was launched he was critical of what he described as an unimaginative range of projects which were being sponsored. He put forward various suggestions then, and I think he will agree that the examples I have given and his suggestions are comparable.

Mr. Steen

But how about the pay?

Mr. Walker

I will deal with that point. Like the hon. Gentleman and other hon. Members, I have taken the trouble to visit job creation schemes.

The range of sponsors is also increasing. Increasingly voluntary organisations are becoming involved, and it is hoped that more private employers will be able to mount projects or to help sponsors in other ways—for example, by providing expert advice and guidance or loaning equipment. Members of this House are well placed to help convene meetings of local groups to consider whether the job creation programme can assist their areas and to help co-ordinate local activity.

I said that the hon. Gentleman had some ideas of his own. I hope that he does not include in them the collection of litter and baby sitting, which he mentioned in The Sunday Times yesterday. I hope that they are not included in his more constructive and imaginative ideas.

I turn to the argument that wage rates are too high and that JCP employees are being paid above market rates. The basis for setting wage rates was simple. Once an applicant has successfully applied for a JCP grant he becomes a project sponsor. As a sponsor he employs JCP staff and assumes the normal responsibilities of an employer. The JCP does not want to be a scheme offering second-class work. Sponsors are reimbursed wage costs and pay the rate for the job. A local authority sponsoring a scheme pays the rate it would normally pay for broadly comparable work. Other sponsors pay their normal wage rates. It is a simple way of deciding the rates which should apply.

That JCP should fund only work which would not otherwise be done is a necessary safeguard to ensure, for example, that job creation funds are used for additional work and there is no risk of people losing their jobs on the one hand only to see them being filled by people recruited through JCP.

Young people employed as a result of JCP are not employed by the Government and they are not paid artificially high rates. They are employed by the sponsoring organisations and pay rates are geared to these.

There is no reason why a sponsor should not involve young employees in project management. I hope this may be a feature of schemes put forward by youth organisations, although we should not underestimate the projects or minimise the difficulties in the way that the hon. Gentleman may tend to do.

I find the attempts of the hon. Gentleman to argue for more freedom in this respect difficult to reconcile with his blunt assertion that if a school leaver has not found work within two months he should be compelled to take work such as, perhaps, baby sitting or collecting litter, or, alternatively, should forfeit any benefits to which he might be entitled. Contrary to the hon. Gentleman's assumption and to what was said in the newspaper article, school leavers are not eligible for unemployment benefit. The hon. Gentleman set himself up as the apostle of more freedom in these matters, yet at the same time advocated coercion—an idea which will be rejected by most people, and is certainly repugnant to me.

A number of points have been raised with which clearly I cannot deal in the course of an Adjournment debate. I hope that we shall have the opportunity to return to this matter again.

In conclusion, a programme which has mushroomed in the way in which—

The Question having been proposed after Ten o'clock on Monday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put. pursuant to the Standing Order.

Adjourned at ten minutes to Three o'clock a.m.