Youth Training Guarantee (Newham) (Hansard, 18 June 1993)

§ Mr. Ron Leighton (Newham, North-East)
I welcome the Minister to her new post. The situation that I am about to describe was not caused by her but has been dumped in her lap.
The Government abolished benefits for 16 and 17-year-olds, and instead promised every young person without a job a guaranteed training place and a small allowance. That guarantee is not being implemented in the London borough of Newham and never has been implemented there. There are hundreds of young people in Newham without a job or a training place. There are hundreds who, for years, have been without a training place in the borough. I am grateful for the opportunity to air that scandal in House.
I have taken a close interest in youth training—first, through the Select Committee that I chaired during two Parliaments and, secondly, in the borough. I have kept in close touch with the training providers, the careers service, the training and enterprise councils, the youth service and the young people themselves.
Ministers stand at the Dispatch Box and repeat that they are committed to the guarantee. That sounds good, but what does that weasel word mean? The Government do not deliver the guarantee—they leave that to the TECs. They hide behind the TECs and say that it is a matter for them, but they do not give the TECs sufficient funding.
The TECs themselves do not deliver the training. They subcontract it out to training providers, but then give the trainers such a low unit price that decent training—and the guarantee—cannot be delivered. The Government then stand back, several stages removed, saying that they have instructed the TECs to implement the guarantee. Some TECs have training weeks available but also young people without places. How is that? It happens because the unit price is so low that no training provider will take the places offered.
I have continually brought these matters to the attention of Ministers. I had an Adjournment debate in November 1991. In the same year, I arranged a conference at Westminster for training providers in Newharn and Tower Hamlets, which was also attended by Win Harris of the Department of Employment. It was shown that hundreds of young people did not have training places, and that the unit price, after the allowances were paid, left only around £3 a week to pay for the training. The main cause of the problem was inadequate funding. The then Under-Secretary of State, the hon. Member for Wantage (Mr. Jackson), wrote to me on 9 December 1991 saying that trainers should take up their concerns with the TEC.
The reason for the low unit price—around £38—out of which a 17-year-old is paid a £35 allowance, leaving £3 for training, is that it was based on the assumption that employers would participate, give work experience placements and make a financial contribution, thus topping up the £38.
People used to talk about the demographic time-bomb and imagine that employers would be fighting over a dwindling number of young people. That is not happening, particularly in Newham. My hon. Friend the Member for Newham, South (Mr. Spearing) is here and will vouch for 1172 the fact that the economy in Newham has largely been destroyed and employers are very thin on the ground. Those who remain have been hit hard by the recession. Struggling to survive, they have been making redundancies, not taking on trainees.
Without the employers, a big hole is left in numbers and finance and the sums do not add up. Without employer placements, the only alternative is project-based training simulating workshop experience, but that is expensive. For example, Mowlem's told me this week that it cannot provide construction youth training for less than £74 a week. An enhanced unit price is needed for that sort of project-based training. The guarantee cannot be delivered without more resources.
In Newham, we have a youth advisory group consisting of the local authority, voluntary organisations, the careers service, an employer partnership, the police and the TEC. I attend when I can.
We held a meeting some months ago to discuss youth training. It was established that 400 Newham youngsters were seeking youth training places. Paul Taylor, the TEC's Newham director, agreed that he would ask for that number of places at a unit price of £100 a week. Apparently, back at the TEC, someone talked him out of that and a request was made for places at about £40 a week. People on the advisory group were very disappointed to hear that.
Irritated by the constant repetition of the Government's alleged commitment to YT and Ministers saying that everyone was guaranteed a place, I asked at a Select Committee meeting whether the then Under-Secretary of State, the hon. Member for Wantage, would meet a group of young people from Newham. Without great enthusiasm, he agreed. I thought that I would present him with real people and flesh and blood. I thought that I would present him with the people whom he said did not exist—Newham young people without a job or a training place.
On the appointed day, I took about 100 youngsters to the Department of Employment. The Under-Secretary came down to meet us as arranged, but when he saw the numbers involved, he retreated back into the lift. He sent down a message saying that he would meet only six of those youngsters. He later made a number of undertakings to those he met. However, nothing came of that because the general election intervened and the hon. Gentleman was moved.
As the Under-Secretary would not meet people at Westminster, my next move was to invite the successor of the hon. Member for Wantage, the hon. Member for Derbyshire, West (Mr. McLoughlin), to visit Newham to see things for himself. The new Minister agreed to come and, around that time, some improvements were made. Sixty places were agreed at Mowlem's and about 60 extra places were agreed, at an enhanced rate, at Newham community college. I welcome those improvements, but they are not enough.
After one cancellation and delay, the Minister was good enough to visit us on 12 May last. His visit consisted of three parts: the first was a meeting with Martin Tolhurst, the principal of Newham community college. The purpose was to explain not only that there was a problem, but that we could provide a solution. The principal offered to provide a further 200 high-quality places at the college at a unit price of £100 a week, all of which would lead to national vocational qualifications. If the Minister will 1173 accept that offer—I urge her to do that as strongly as I can —she can, at a stroke, break the back of the problem in Newham. I look forward eagerly to what she will say on that point.
The second part of the Minister's meeting was a meeting with local training providers. They left him in no doubts about their feelings. A flavour of what they had to say can be gained from letters that they have sent me. Roy McLean, the assistant principal of Newham community college, wrote: For a number of years, as many as 500 young Newham people at a time have not had the youth training 'guarantee' met. This locks them into an unemployment and poverty trap from which there may be no escape, and will eventually be a considerable cost to the individuals, the local community and the state. Local businesses are trying to survive a diffcult economic climate and are not prepared in general to provide work placement for young people, as this is time-consuming and a cost to them. Mr. McLean states that he can provide a full range of national vocational qualifications to level NVQ4 and beyond and refers to all the areas in which he can do that. He continues: The College could provide a YT place to virtually all local young people who want one … The Local Training and Enterprise Council (LETEC) recently offered the College a total of some £40 per week per trainee. That is typical and the College is required to pay that money to the student as living allowance and travel expenses, leaving no funds to pay teachers, technicians, and to cover overheads. This means that the College is not financed to actually deliver the training. That is not a viable proposition for the College … As a special case, LETEC agreed recently to a one-off support for some 60 YT trainees. It agreed to do that at an enhanced price which I will not mention because it may be commercially confidential. However, it was double the normal rate. The letter continues: Unless such a realistic and minimum level of support can be maintained, we will again face a situation where aspiring young people will not have access to training, and will Miss a crucial opportunity to achieve success and gain employment. The overriding issue in Newham, therefore, is the unit price paid by LETEC for YT places. Convergence Systems referred to the fact that funding levels for Youth Training in the LETEC area are generally lower than the actual costs of training allowances and fares which Managing Agents pay to trainees. The East London Partnership, a group of employers, wanted to raise this point: Considering the difficulty at present in finding work placements with local employers for youth trainees, can government offer a financial contribution to employers to assist them meeting the costs? Nadet Ltd., which operates in docklands, provides courses for 240 unemployed persons. It states: We were approached last December by LETEC and asked if we were interested in starting a Youth Training Scheme based here in the Docks covering Business Administration. As this was a new venture for us we negotiated a price of 57.00 pounds per trainee per week and it was agreed that when the new round of contracts started in April this would be reduced slightly by a few pounds. In fact this has been slashed down to 38.66 per week, some 18.34 less, a drop of 32 per cent. This figure does not even cover the cost of their allowance and fares. We are already running full to contract with 40 trainees in training proving demand but unless we can very soon find placements where the employers will contribute towards their costs, we will not be able to continue with this scheme, and this coupled with the 1174 demand for YT places paints a bleak picture for those youngsters leaving school this year in Newham. If we cannot hold and train these youngsters that cannot get jobs or who have had bad experiences with schooling, what alternatives do they have. Nadet later said to me that the careers service estimates that, in the summer, an additional 600 youngsters in the boroughs will require YT places. I have received a fax from the careers service which tells me that the current figure for those who have been on its books for eight weeks and eligible for places is 278.
Sid Hughes, the principal of Newham sixth form college, wrote to me saying that a member of the TEC board seems convinced that the unit price available in the LETEC region is much lower than that available in other parts of the country … She was also quite positive that funding is not available to meet the demand for places. Then there is the Newham community employment project. On 23 April, I presented national vocational qualification certificates to more than 40 successful trainees. The previous Minister wrote to us saying that the Government were not capable of usefully delivering more places". The Newham community employment project is hopping mad about that and it has written to LETEC asking for an explanation. Quest states: The YT guarantee is suffering from the same sleight of hand as the adult unemployment figures. So many provisos are placed on the definition of a young person who meets the requirements of the guarantee that I have great sympathy with LETEC in its efforts to try and prove to the Department of Employment that the guarantee is not being met. It must be nearly impossible. There is no doubt, however, that the guarantee is not being met for a large number of disabled/special needs young people since the provision to meet the requirements of these young people does not even exist. It must also be remembered that Youth Training is fairly unpopular with many young people and their parents, mainly because of the low level of YT allowance specified by the Government—£29.50 per week at 16 and £35 per week at 17. Quest tells me: This year Quest's STN training places have been cut and The reduction in funding for STN trainees, the employment of an additional member of staff to meet the Level 1 NVQ requirements and a cut in the number of STN training places means that our Initial Training Unit is no longer financially viable". Rose Lavin of Kalamazoo Training Consultants Ltd., which runs an information technology centre in docklands, wrote to me, saying: I would suggest that unless LETEC seriously re-assesses its contractual arrangements with providers it may well find that quality providers in East London will be non-existent, and as tax payer, I strongly object to such monies being used (a) merely to reduce an unemployment register (b) to produce sub standard training at a time when our young generation have not only to compete with each other in a reduced job market but to compete with European youngsters. The future of local boroughs and indeed of the nation depends on a well trained workforce and good training costs money. Quality training cannot be had for £3.00 or less per week. The Government have to either: (a) Produce tax or other incentives to encourage employers to train young people on site whilst employing them. or (b) Use the existing resources i.e. colleges, training providers and community groups in a way that through directed quality training they can be paid their allowance and a unit price for training. 1175 I don't feel that we should be a glorified unemployment Benefit Office for young people and if 95 per cent. of the unit price is being used to pay out training allowances then that's what we've become. I had a letter from Paul Taylor, the director of the LETEC. He said: I should be interested to hear the Minister's views about the provision of Youth Training. Specifically, if LETEC's Youth Training contracts were to be completely full, LETEC had no extra resources to allocate yet there was still a waiting list of young people waiting to join the programme, at what point would the Government consider allocating additional resources? I am sure we shall have an interesting meeting. It will be interesting to find out today.
After the visit, I received a letter from the principal of Newham community college, which said: Late in 1992 we were approached by LETEC to provide YT places to meet the shortfall in the YT guarantee in Newham. In response we offered some 300 places. To date LETEC has funded 52 places, and despite there being young people on both our own waiting list and that in the Careers Service, has refused to fund more places at the College on the basis of cost, i.e. they say that we a re too expensive. The price is in-house, but the college gives high-quality places. The principal says: these prices are paid in other parts of the country where there is high unemployment. We are ready to provide more YT places in a wide variety of vocational areas that are relevant to future labour market needs if LETEC can provide a realistic unit price.
As part of the Stratford City Challenge we have offered LETEC an additional 180 YT places. LETEC has agreed this in principle but only offered between £32 and £40 per week for each place. We cannot provide training at this price as it will only meet the cost of the trainee allowance and expenses.
Paul Taylor responded to the Newham Recorder by stating that there are currently YT vacancies in Newham that have to be filled before he can ask for extra resources. This is unacceptable. There clearly are a great many young people in Newham without a place, and the existence of vacancies; at the same time merely points to the unattractiveness of those places to young people, which in turn is probably linked to LETEC's low unit price. In other words we have a vicious circle with Newham young peopole getting the rough end of the deal.
As I have now said on numerous occasions, I can offer and fill more high quality YT places if LETEC is willing to fund them."
There is a long list of young people waiting to come in.
In the third part of his visit, the Minister met a group of young people without jobs or training places. Obviously, that is clear evidence that the guarantee is not being implemented. One thing that came out strongly from the meeting with Newham youngsters was the low reputation of youth training places which came from their experience or that of their brothers and sisters. Many regarded them as a second rate stop-gap—a low-quality, cheap labour scheme.
Many of the places have been of low quality. How can quality be delivered for £3 a week? The Minister's predecessor, Alan Clark, wrote in his diary that he did not like the job because the Department operated bogus schemes that were designed to reduce the unemployment register at the lowest possible price. The places at the community college to which I referred are of high quality and lead to quality qualifications.
It was difficult not to come away from that meeting with the Minister and those young people without feeling that we were largely creating a lost generation of young people without work, training or hope. Many are throw 1176 non the scrapheap at 16. I am sure that our youngsters deserve something better than that and we should be able to provide it.
We were grateful for the Minister's visit—even if he has moved on—and eagerly awaited his letter to us. When the letter came, we were all astounded by what it said: You asked me if more resources would be made available if LETEC were unable, because of funding, to meet the Youth Training Guarantee. I can assure you that I and my Ministerial colleagues remain fully committed to the Guarantee and we will continue to ensure that it is being met. Moreover no TEC will be prevented from meeting the Guarantee by lack of resources. At this stage LETEC have not approached me or Departmental officials on this issue. Clearly if LETEC make a case, I will give it careful consideration. It has been suggested that money is available but the TEC has not asked for it. Why not? It appears that some money is still available, so it feels that it cannot ask for more. Why has it not spent that money on getting decent training? The chairman and chief executive of the TEC have been changed. It has been said that this TEC is the first one to have made an operating loss—perhaps that is why the chief executive was moved.
The chairman-elect does not like it being said that the TEC has let down the young people of Newham. But what other description can be given when hundreds of youngsters in the borough do not have training places? That has been the case for years and it is a disgrace. The TEC is operating in a hostile environment with inadequate funds. But it is not a tool of the Government—it must speak publicly for the people of Newham.
I ask the Under-Secretary to take a personal interest in this matter, cut through the red tape and not to accept any excuses for this unacceptable mess. I know the Minister to be a caring person. When she wore a different hat, I brought to her attention the bad conditions in Jubilee house, a Department of Social Security office in Newham. She came to see it and then took action. That was appreciated by the local people. I hope that she will do the same on this matter.
The Government have repeatedly said that no TEC will be prevented, by lack of resources, from meeting the YT guarantee. We may well hear that promise again today. The problem in Newham could definitely be solved if resources were made available. The crux of the matter is that extra cash is needed. I hope that the Minister and her officials will get to the bottom of it. I intend to keep in touch with her on the issue.
Newham has more than its fair share of problems, including an unemployment rate that is more than double the national average. When I presented GCSE certificates at a local comprehensive recently, I discovered that just six of the cohort who had left had obtained jobs.
If the east Thames corridor and docklands are to be developed, Newham will benefit only if we have a skilled generation. I shall continue to use every opportunity available to me as a Member of Parliament to raise the scandal of the non-implementation of the YT guarantee until it is satisfactorily resolved. If we can solve it, at least I shall have done something for the people who elected me.

§ The Parliamentary Under-Secretary of State for Employment (Miss Ann Widdecombe)
I congratulate the hon. Member for Newham, North-East (Mr. Leighton) on 1177 obtaining the Adjournment. I also welcome the presence of the hon. Member for Newham, South (Mr. Spearing), who takes a keen interest in this subject.
The Government are extremely concerned to deliver the YT guarantee. I take it seriously. I accept that the implementation of the guarantee at Newham was causing concern some months ago. Since then, things have considerably improved. I take no credit for that, however, because the hon. Member for Newham, North-East will understand that it was the responsibility of my predecessor.
It is worth drawing the figures relating to Newham to the attention of the hon. Gentleman. The number of YT trainees who have been waiting more than eight weeks for a place has declined from 103 in February to the latest figure of 35. It is also worth pointing out that, against that figure of 35, there are 47 vacancies in Newham.
I accept, as I am sure that the hon. Gentleman would point out, that it does not necessarily follow that all those vacancies are well matched to the trainees in question. In the TEC area, however, many vacancies are available not only in Newham but in neighbouring boroughs, including quite a number in Tower Hamlets.

§ Mr. Leighton
Is the Minister aware that I have received a fax from the careers service in Newham which reveals that the number of clients who are unemployed and who have maintained contact at least once in the eight weeks preceding the count date and are eligible for a YT place is 278?

§ Miss Widdecombe
The hon. Gentleman is quoting from a different base. I was quoting figures relating specifically to Newham, not across the borough, because I thought that that was the hon. Gentleman's immediate area of interest. The figures are the standard ones produced against the standard count. I shall, of course, be pleased to look at any figures that suggest anything different—certainly on the scale quoted by the hon. Gentleman. I suspect that the problem is that we are not talking about like for like.
It is a pleasure to be addressing an important subject at a reasonable hour. Adjournment debates often take place in the rosy-fingered dawn, when it is sometimes less than easy to do justice to the importance of a subject.
I shall consider first the Government's overall policy on YT and then consider the situation in Newham specifically. I am more than happy to take an interest in the matters that the hon. Gentleman has raised. I should also be happy to visit the hon. Gentleman's constituency, as well as the catchment area of his hon. Friend the Member for Newham, South.
The Government place huge importance on giving young people of 16 a positive choice. There are three main choices—they can stay in full-time education, which an increasing number of them are choosing to do; if they are able and willing, they can take a job; or they can undertaken training. We demonstrate our commitment to encouraging young people to take up suitable training by the guarantee of a suitable place for those under 18 who are not in full-time education if they are willing and want to train.
Many of the young people who attended the meeting that the hon. Gentleman had with my predecessor were 1178 still at school or college, or were not interested in YT and had said that they would not consider it. The hon. Gentleman is a trifle unfair to quote from the diaries of Alan Clark, who was in the Department in the mid-1980s. The concept of training has moved on vastly since then. In particular, the implementation of training and enterprise councils and the new arrangements for training have overtaken much of Alan Clark's thinking. I would concede that the early days of YT did not cover the scheme in glory or produce a threnody or song of praise, but things have moved on so substantially since then that it is unfair to make comparisons on that basis.
It is Government policy, in which I firmly believe, that it is utterly wrong in principle for school leavers to be offered benefit-supported unemployment as an option, except in the most severe of circumstances. In May, there were, nationally, 4,000 young people who had waited for longer than eight weeks for a place, but of those, 1,650 had already had an offer. That waiting figure has reduced considerably in recent months-25 per cent. since April. The positive side is that 230,000 young people—compared to the 4,000—entered YT and participated in youth credit schemes in 1992–93. There are currently more than 240,000 young people in training in England. That amounts to 12 million weeks of training at a time when the economy has been under severe pressure.
The previous Secretary of State for Employment made absolutely clear to training and enterprise councils the importance that the Government place on the delivery of the guarantee. My colleague, the new Secretary of State for Employment, is equally determined that that guarantee will be met. In July last year, we introduced new arrangements for monitoring the YT guarantee. Each month, careers offices throughout the country provide my Department and their local training and enterprise council with returns on the number of people registered with them who are covered by the guarantee. A report is made to me each month and I take an interest in each region of the country. However, for the immediate future I shall take a a particular interest in the figures from the hon. Gentleman's constituency.
As a result of the close monitoring and calling to account, training and enterprise councils and careers services have been encouraged to work together even more closely to identify the needs not just of groups of young people, but individual young people. That is why, when an individual has been waiting for more than eight weeks for delivery of a guarantee, the relevant TEC should have full knowledge of the individual circumstances of that young person. As I am sure that the hon. Gentleman will concede, some young people are not placeable. They may have problems; they may never be available; they may never be contactable; they may deliberately refuse to take places no matter how often they are offered them.
There are a certain number of young people for whom we will not be able to deliver the guarantee no matter how much we may wish to do so. But we are interested in those who have been waiting eight weeks and have not been placed despite being motivated. Therefore, I give the undertaking that we shall look closely at the individual circumstances of any young person in Newham who has been waiting for more than eight weeks.
The hon. Gentleman rightly predicted that I would say —I am going to do so loudly and clearly—that no training and enterprise council should be prevented from meeting the guarantee through lack of funds. My predecessor 1179 wrote to the hon. Gentleman on 26 May, shortly before the changeover, and explained why the statements made by the hon. Gentleman about unit prices were not completely fair. My predecessor explained the funding arrangements and made the statement that I have made today—doubtless to the hon. Gentleman's irritation—that we believe that we adequately resource the training and enterprise councils and keep the matter constantly under review.
The London East training and enterprise council currently has 430 YT vacancies in its district, of which 47 1180 are in Newham, 48 are in Redbridge and 165 are in Tower Hamlets. Those districts are immediately accessible from the hon. Gentleman's constituency and cover a range of activities business administration, warehousing, retail, motor repair, maintenance and construction