HC Deb 18 November 1991 vol 199 cc117-24

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

10.14 pm
Mr. Ron Leighton (Newham, North-East)

The non-implementation of the youth training guarantee is of great importance to individual young people and to the nation's future. There will be no decent future for our young people unless they acquire skills, and no future for Britain unless its population is educated and trained to world standards. To catch up with Germany by the end of the decade, Britain's productivity growth must exceed Germany's by 3 per cent. a year, but we cannot do that with an under-educated and under-trained work force.

In the debate on the Queen's Speech, foolhardy and complacent Ministers tried to foster the illusion that our training matched Germany's. Although, no doubt, some British training compares with that of Germany, many of our young people get absolutely no training whatsoever, and that is a scandal. Many young people enter employment offering no training, and many more do not get even that. They leave school with no job and no youth training place, either. They start their young lives by being thrown on the scrap heap at 16, 17 or 18. In Germany, all young workers get a thorough, three-year externally examined apprenticeship. Here, the Government like to claim that those without jobs are guaranteed a two-year YT place, but even that, something inferior to the German model, is not being delivered. It is a fraud.

Through the mouths of Employment Ministers, the Government claim and pretend that there is a YT guarantee. Continually, they stand at the Dispatch Box and repeat the mantra that they are committed to the guarantee. So that is all right; it sounds good. The innocent might imagine that something will flow from that, but I smell a rat when I hear the word "commitment". What does it guarantee? Very little at all. The Government do not deliver the so-called guarantee. It has conveniently been handed over to the training and enterprise councils, but then the Government cynically deny them the resources to do the job.

The truth is that Ministers who mouth those grandiloquent guarantees know little of what is happening on the ground. They hide behind the TECs, they do not listen to constituency Members who know what is happening in their areas, and they do not listen to the TECs, either. I discovered that when I reported to the House that hundreds of young people in the London borough of Newham had no jobs or YT places. All they got was the usual complacent, superficial parroting of the empty nonsense about commitments and guarantees.

Ministers do not know how many young people are without a YT place. The TECs themselves are often vague. The people who know are in the careers service. Last Friday, I received a letter from the Newham career service. It told me the figures in east London. The figures are from 10 October, and they show Barking and Dagenham 437, Havering 539, Redbridge 537, Tower Hamlets 911, and Waltham Forest 566. The figures for Newham are dated 14 November, so I hope that we do not hear Ministers say that they are not up to date. In Newham, there are 519 young people without a job; 58 say that they are not interested, so that means that 451 are seeking a YT place.

I randomly tried a number of careers offices, and I received a fax showing the situation in Derbyshire: Alfreton 56, Derby 832, Ilkeston 184, Long Eaton 105, Matlock 37, and Swadlincote 103. In total, in Derbyshire there are 1,317. A fax from Leeds shows that there are 873 there. Another one from Birmingham shows 538 there. I have information from Leicestershire showing 1,300. In Lambeth there are 586, the Wirral 444, Newcastle 342, Gateshead 2f, and West Sussex 544. I emphaasise that those figures are all random, and they show that hundreds of young people all over the country are denied a job or a YT place.

As the Secretary of State knows, the Select Committee on Employment has received letters from 69 TECs, and those letters have been placed in the Library. Those letters tell us that more than half the TECs are not meeting the youth guarantee. Five TECs have reported having more than 1,000 youngsters awaiting offers of training places, and another five have between 500 and 1,000 waiting. Many TECs explain graphically that they have inadequate money and that employers are offering too few work experience places because of the recession.

One of the major causes is the Government's cuts in expenditure on training. Department of Employment expenditure has fallen by 42 per cent. in the past five years. Expenditure fell as unemployment fell, but it has continued to decline as unemployment has rocketed again. In the past year, unemployment has risen by a massive 47 per cent., but instead of rising by a similar amount, expenditure in 1991–92 will be 10 per cent. less in real terms than in 1990–91. Next year, instead of the required substantial increase that is needed, there will be a derisory and inadequate increase of 2 per cent.

In 1993–94, the downward path will resume, with a further fall of 6.5 per cent. To measure the scale of the cuts, in 1994–95, the real value of all Departments' expenditure is planned to be 82 per cent. more than it was eight years earlier. But the Department of Employment's expenditure is planned to be 34 per cent. less than eight years earlier. Resources for employment training have been cut this year and for youth training are roughly the same, even though the need is so much greater.

I have here some of the letters which the Select Committee has received from the TECs. The one from Avon says: there is difficulty at present in meeting the YT guarantee in Avon. The main cause is a lack of work placements due to the present economic climate. The letter from Bedfordshire says: our budget is based largely on an historically low number of unemployed people in the County. But between July 1990 and July 1991, the percentage of unemployed doubled. The letter continues: The TEC cannot address the guaranteed programmes for young and unemployed people in isolation from this economic background. In addition to insufficient budget in a time of deep recession … we now realise that TECs are facing an unmanageable task. We are required to operate demand led programmes with cash limited budgets. The letter from Bolton-Bury TEC says: On Youth Training there are currently approximately 500 young people within the guarantee group who are awaiting placement with an employer. The Managing Agents have cited the recession as the reason for the shortfall of placements. The letter from Calderdale says: Negotiations with the Department are taking place on an increase in funding but have proved difficult to achieve so far. The Department of Employment are insisting that the TEC use funds earmarked for other projects to meet the Youth Training guarantee. This is causing considerable disquiet amongst TEC Board members who do not wish to see long-term plans hijacked by such short-term changes in the demand for national programmes arising from the recession… Many employers are reluctant to become involved either because they have a shortage of work or they cannot afford the financial contribution expected of them. The Calderdale TEC says that it has many young people waiting.

CambsTEC in Cambridge says: Over recent months, CambsTEC has become increasingly concerned about Youth Training's ability to meet the increasing demands placed upon it, due to the limited employment opportunities presently available to young people. It says that unemployment has doubled in its area this year. As of 12 September 1991, 200 young people in the CambsTEC area were waiting for a youth training place.

The chief executive of the central London TEC says: I know that we are not alone in our concern about our ability to meet ET and YT guarantees, given current levels of funding. This, combined with the effects of the recession on training demands and budgets, and the problems of placement of trainees with employers and into jobs, leaves us with an almost unsolvable problem without further funds. She says that the TEC is struggling to manage but is far from achieving an acceptable position as yet.

The City and Inner London North TEC says: The most recent figures indicate that there are around 490 young people on the waiting lists of YT providers and another 461 on Careers Service waiting lists. The Dorset TEC said that it was struggling to manage but that it might manage with the provisos that the average length of stay on the scheme remains one year". It is supposed to be a two-year scheme. In Germany, it is three years. Yet the Dorset TEC said that it could manage only if the scheme was cut in half.

Greater Nottingham TEC says: the current recession has had the effect of reducing the number of employer placements available. Without these placements YT providers are unable to provide the "job training" required for National Vocational Qualifications, secure contributions from employers towards the cost of training and, consequently, meet the guarantee of a YT place. It cannot meet the guarantee. It said: We are working closely on this matter with the Careers Service, who advise us that currently we have outstanding approximately 800 youngsters". The Greater Peterborough TEC says: Within the Youth Training programme we have about 150 young people actively seeking a place for training who at the moment have not been given an offer … the fundamental problem is that the unit cost on which the funds are allocated being for this programme are too low … we would hope that more money will be available to meet the guarantee because again, it is not a genuine guarantee, it is a demand-led guarantee and if we are funded on the basis of historical take-up this is bound to change when the economic climate changes, as has been experienced recently. If it were a guarantee then we should be funded accordingly. The Heart of England TEC says: there will be an estimated likely shortfall of 400–450 places. Northamptonshire TEC says bluntly: It became clear to us in the early summer that we would not be fulfilling our Youth Training guarantee. Lincolnshire TEC says: The funding package assumes a contribution towards the overall cost of the training from employers, usually by paying wages or meeting the allowance cost in the case of unemployed trainees. A high proportion of trainees are placed with small employers … Without that contribution the funding package simply does not add up. The Central England TEC tells us that the system of funding must be commensurate with the Government's guarantee. This has not been the case so far this year with several results", one of which is that Government credibility has been severely tarnished, particularly with regard to perceived dedication to improved training. Humberside TEC says that it cannot get employer placements, so it is not getting "NVG III provisions" and the quality of training is falling.

The Isle of Wight TEC says that it notified the Department of Employment in August that it might be unable to meet the YT guarantee within the funds allocated for the purpose. It says: Such concentration on meeting the Government guarantee, and use of funds originally earmarked for other purposes for YT, inevitably means that other aspects of our proposed programme may suffer and that we also neglect the long term development of Youth Training itself. Manchester TEC tells us that there are between 1,200–2,000 young people in the Guarantee Group wanting to join YT for whom there were unlikely to be places available before Christmas. Milton Keynes TEC says: 495 young people are registered with the local Careers Office with 14 notified job vacancies and no Youth Training vacancies. I have a thick wad of these letters which I would love to read out, so that they would be put on the record. However, I want to leave sufficient time for the Minister to answer.

Where does that leave the Government's so-called guarantee? Looking pretty sick. Some TECs have told us that it is not their guarantee but the Government's. Under the YT programme, the Government are paying less and expect the employer to pay more. The scheme is based on employer participation, TECs cannot deliver without employers and their contribution, but the employers have given no guarantees and recognise none.

Due to the recession, employers are struggling to survive. They are making many staff redundant, and they are largely pulling out of the programme, thus leaving a huge hole in numbers and finance.

TECs do not themselves provide programmes; they contract out to training providers. However, trainers are also pulling out, because the sums do not add up, it is not worth their while and quality is suffering.

The Minister will know of one trainer, Astra Training Services, because he paid it to take the skill centres away.

Astra says: many training providers are currently in financial difficulties and are leaving the training market. This damage to the training infrastructure may take years to repair … The current Government funding regimes for both ET and YT are reducing the numbers of providers and offer insufficient incentives to encourage new organisations to enter the market. It also tells us: Although there are now additional opportunities to expand our share of the YT market, the funding arrangements are considered inadquate to make such a move worthwhile. There is evidence to suggest that both ET and YT providers are finding the current funding insufficient to justify a continuing role. Some have withdrawn voluntarily; others have been forced into liquidation by their creditors. Thus whilst there are increasing opportunities to bid for a larger share of this business, it would be financially imprudent to do so. So the trainers are pulling out. In my area of east London, the TEC has asked the careers service to canvass for places because the training providers are not coming up with them. I am not criticising the TEC: it does not have the resources.

What, finally, is the reality? What is the convoluted chain of command? The Government proclaim their commitment. The TECs are given the responsibility. The employers, although they are expected to contribute, do not want to know. Many training providers pull out because it is not worth it. At the end of the line, the local authority careers service is called in to rescue what remains of this shambles. That is the much-vaunted commitment. That is the travesty of the guarantee.

The way forward is for the Government to admit that the guarantee is not being delivered and that it is being overwhelmed by the recession. They must go back to the drawing board and review the whole of youth training. They should sit down with some of us who are interested in these matters and draw up a quality scheme that works. Otherwise, they will continue to fail thousands of our young people and our country's training needs.

10.31 pm
The Parliamentary Under-Secretary of State for Employment (Mr. Robert Jackson)

I congratulate the hon. Member for Newham, North-East (Mr. Leighton) on raising this important topic. The House knows that he takes a great personal interest in the training of young people, not only in his constituency but by virtue of his chairmanship of the Select Committee on Employment.

First, I reiterate the Government's guarantee to young people. It is that all young people under 18 who are not in full-time education or a job and who are seeking youth training are entitled to be offered and, if necessary, re-offered any number of times entry to a suitable YT programme and to receive such training. All young people falling into that category but over the age of 18 who have not been available for YT because of disability, ill health, pregnancy, a custodial sentence, remand or language difficulty are entitled to an offer of a suitable YT programme and to receive such training. That is the guarantee.

Despite the hon. Gentleman's figures, a moment's reflection will enable the House to recognise that managing the delivery of a guarantee of this kind for hundreds of thousands of young people is not a simple, straightforward operation. For a start, there is the question of how to plan and predict the numbers of young people who will exercise their entitlement. We know that there are in principle X young people who could qualify for that entitlement—that information is available from the census—but their choice whether or when to exercise it is not predictable. When one thinks about that, it becomes apparent how complex the matter is.

The first critical factor, which emerged clearly in our debates this year, is the staying-on rate in full-time school and college education. Young people who have completed GCSEs at 16 can choose whether to stay on at school or college, or come out into the labour market and, possibly, take an entitlement to YT. We do not know what the staying-on rate will be until the autumn, and it is capable of further revision during the year.

Many young people—I am in no way blaming them—are unclear about their personal plans. Many will register with the careers service. That is where the hon. Gentleman gets his numbers from. However, they do not necessarily always turn up for an interview when it has been arranged for them. Many of them will be interviewed for YT but will take a job outside YT, and why not? Many may drop a non-YT job or be made redundant from it and then seek entry to a YT course. Many may start a YT course and leave it to take a job. Such considerations make it difficult to anticipate the numbers involved. They also shed light on the excessively clear figures produced by the hon. Gentleman—those figures are partial.

Despite the figures cited by the hon. Gentleman, planning and managing the delivery of the YT guarantee is not and cannot be an exact science by the nature of the case. Nevertheless, the Government stand firmly by the guarantee. However, as the hon. Gentleman is aware, the Government have accepted for some time that particular difficulties might be experienced in certain TEC areas. The hon. Gentleman is aware that we have been in close touch with each TEC in recent months about the position in its area.

We have always said that no TEC would be prevented by lack of resources from meeting the guarantee. We have negotiated with TECs where demand has been shown to warrant it. The hon. Gentleman appeared to misunderstand that, where demand has been shown and where a TEC has used the resources available to it, we have authorised the provision of further places. We shall do so again if experience shows that it is needed.

During the debate on the Loyal Address, the Secretary of State confirmed that we have reached agreement with the great majority of TECs so that they have the resources to deliver the YT guarantee. A handful of TECs have not yet reached full agreement, but we are continuing in negotiation with them.

As the position relating to school leavers is clarified —it is not yet clarified because people may choose in January of February to leave school—or as new information becomes available, some TECs may find it necessary to bid for additional resources. We will be prepared to discuss that.

The system assumes a close and continuing dialogue between the TECs and the Government. There is also a dialogue between the Select Committee and the TECs, which is fine. I congratulate the hon. Gentleman, as Chairman of the Committee, on his initiative on opening that dialogue, which is in line with the spirit of the TEC movement. However, the hon. Gentleman should be careful about the way in which he handles that correspondence.

The hon. Gentleman quoted from recent correspondence and it is important to remember that everything depends critically on timing. I have already demonstrated that by drawing attention to the uncertainties surrounding the planning. Very few TECs would have been able to answer before the deadline of 14 October with any actual knowledge of the extent of the staying-on rate this autumn. However, the TECs were required to answer before that deadline and most answered in September. Perhaps I should have asked the hon. Gentleman the date of the letters from which he quoted.

The facts about the staying-on rate emerged only in October. As the House knows, there has been a marked and welcome increase in the staying-on rate in full-time education. We are all pleased about that. As a result, the gloomy apprehensions that were widely entertained in September have not been realised, because of the facts that emerged in October and November.

Mr. Leighton

Will the Minister give way?

Mr. Jackson

The hon. Gentleman had a fair crack of the whip and I must conclude soon.

I do not like to chide the hon. Gentleman, but he must be careful about causing alarm and confusion about the national state of the YT guarantee by quoting from the TEC letters. I would also level that charge, perhaps more pointedly, at the hon. Member for Sedgefield (Mr. Blair), who unashamedly used those letters in a debate a week ago. The fact is that only one TEC was quoted as not meeting the guarantee, but there is an offer on the table of further underpinning money.

I could bandy quotations with the hon. Member for Newham, North-East. If one considers the letters from the TECs—I emphasise that they were sent at a time when the facts about the staying-on rates were not yet available and the predictions were gloomy—which were quoted in the recent debate, it is clear that significant passages were omitted.

Wolverhampton TEC said: We expect to meet the Government's guarantees on both ET and YT. What could be clearer? The Heart of England TEC, which the hon. Member for Sedgefield quoted in that debate, said: Providing our estimates of those entering the YT and ET guarantee groups over the next few weeks remain accurate"— it recognised the timing problem— and sufficient placements are forthcoming, the guarantees in Oxfordshire can be met. Shropshire TEC, which was also quoted in that debate, said that it expects to meet the YT guarantee and foresees no difficulty meeting the ET guarantee.

I could continue quoting TECs ad nauseum. At the time of that exercise, most of the TECs were confident about meeting YT guarantees and, in the light of the staying-on figures. They are even more confident now.

I wish to emphasise the positive features of the YT programme which I know the hon. Member for Newham, North-East appreciates. There are 260,000 young people in training in England and Wales—data for Scotland are not available. That is a huge number. Since 1983, we have trained more than 3.1 million young people on YTS and YT. We have increased the financial provision for YT, including training credits, from £842 million in 1991 to £853 million in 1992, which is a vast increase in expenditure since we came into office 10 years ago. Some 87 per cent. of those who complete YT go into jobs or further education; 66 per cent. of those who complete YT gain a qualification; and 80 per cent. of YT trainees say, when asked about it, that they found the experience useful or very useful.

Despite the criticism and even hostility that Opposition Members and members of the Labour movement sometimes express, the YT programme has been a considerable success. I urge the Opposition to weigh their words on the matter because some of their comments may be reported outside the House in a way that would damage a cause that they share with us—the interests of youth training. It is important that young people should not be given the impression, for whatever reason, that youth training is inadequate or unavailable, or that there is no point in their applying for it. There are 260,000 young people on YT schemes in England and Wales and many opportunities exist.

I urge the hon. Member for Newham, North-East to support the youth training programme and not to use language that may give the impression to people who are not in a position to understand that the programme is not worth applying for because they may not find a place, or that it is hopelessly overstretched. The programme is good and successful, and I commend it to the House.

Question put and agreed to.

Adjourned accordingly at eighteen minutes to Eleven o'clock.