HL Deb 25 May 1982 vol 430 cc1127-45

6.30 p.m.

Lord Wells-Pestell rose to ask Her Majesty's Government whether they will state their policy in respect of community enterprise programmes and the proposal to reduce substantially the grant being made to Elephant Jobs Limited of London SE1.

The noble Lord said: My Lords, I beg to move the Question standing in my name on the Order Paper. As your Lordships will see, it falls into two parts. It is: To ask Her Majesty's Government whether they will state their policy in respect of community enterprise programmes", and to give me an opportunity to draw to your Lordships' attention what is happening to an organisation in South London known as Elephant Jobs Limited.

It is not my intention to say anything at all about the Government's policy in relation to community enterprise programmes because I think I am right in saying that the noble Lord, Lord Kilmarnock, will deal with that. So far as possible, I do not want to impinge upon what other noble Lords will say, and I know what two or three of them are likely to say. I want to make my own position perfectly clear. I, personally, have no connection with Elephant Jobs Limited. I am not a member of its committee; I have never been associated with it; I intervened because it is under threat of closure by the Government within the next month. My friends in South London, particularly those in the professional social work services and the probation service—with which, as your Lordships know, I was connected for some years—are appalled at the prospect of this organisation being closed down.

The position is that Elephant Jobs Limited was started in 1976 by the Blackfriars Settlement and by Cambridge House, in order to provide a work experience for young people. In the last six years no fewer than 850 young people have passed through that job centre—I think each of them having done a year's work—and have left not only with work experience but with some new experience. Some of them, between 18 and 25 years of age, are engaged on community enterprise projects; the rest, being between 16 and 18 years of age, are engaged in the Youth Opportunities Programme. Both schemes are administered and run by the Manpower Services Commission.

During that time, as I said, it has given work to 850 young people. I cannot say how many of them were black; I cannot say how many of them were white; but I should think it is pretty well down the middle. As the right reverend Prelate the Bishop of Southwark, who is taking part, will say, that is an activity of supreme importance in an extremely difficult area of London. At the present moment 154 young people are engaged.

I made my own inquiries to see whether there was any real justification for closing it down and the more that I have inquired into it and the more people that I have seen, the more difficult it has become for me to realise that it is a necessity. As I have said, this work is known by a large number of people in the area and I have not yet found anyone who has had any adverse criticism to make of it.

When I tabled this Unstarred Question, I hoped that I would be in a position to withdraw it some days ago, because I had an opportunity of discussing the matter with the noble Lord, Lord Lyell, who will be answering tonight, who was good enough to make arrangements for me to meet him and some of his advisers at the Department of Employment about a week ago, where we had a very full and frank discussion. At the end of it, I was even more bothered about it closing down because I could not believe that there was a good and sufficient reason for doing so.

Later the same morning the right reverend Prelate the Bishop of Southwark and I went along to see the Minister of State in the Department, Mr. Michael Alison, and I think I can speak for the right reverend Prelate when I say that we were deeply grateful to him, not only for seeing us, but for giving us a tremendous amount of time with his advisers, including one from the Manpower Services Commission. I do not know how the right reverend Prelate felt when he left, but, out of the two meetings, I did not find much to give me encouragement for the future.

Perhaps I could just explain what it is all about. At Elephant Jobs in South London, they have most of these 155 young men working on community enterprise programmes. That means that they do something of communal significance as distinct from individual significance. They will, perhaps, try to organise some sort of play centre; they might try to organise some sort of playground; they might redecorate and repair a centre. It is some community enterprise. Over the six years this is precisely what they have been doing.

But the criteria laid down by the Manpower Services Commission has, in fact, changed from time to time. It started off with a job creation programme, and it was much broader than it is at the present moment. Then it was changed to a special temporary employment programme and that went on until April 1981, when, to qualify for continued assistance, centres of a similar kind were expected to concentrate on community enterprise projects.

But during that period Elephant Jobs had developed other skills; for example, they have a small pottery section where they turn out excellent pottery, because I went down to see exactly what they did for myself; they turn out some really first-class wool carpets; they have a small silk screen printing section—it does not employ very many people. However, these three have developed into skills. It is perfectly true that they are able to sell some of these things privately and on the market, and, apparently, as I understand it—and I do not think that I have got it wrong—this is the nub of the problem, because obviously these job centres are not supposed to engage in some kind of activity that will probably cause unemployment in the community. That I understand and that I accept. But no one can say that what this particular group of young people is doing is ever likely to do that.

In fact, on their committee they have business men who know precisely what is going on. They have on their committee a trade unionist, who also knows what is going on, and neither has taken any exception to it. If I may be permitted to say so, I can be sure that the trade union representative would take exception to it if it was likely to interfere with the employment of other people.

I regard it as a fairly insignificant contribution when it comes, shall I say, to competing with the outside world. I do not think one can really say that they are competing. This I gather is the problem; it may be that this kind of activity—I do not know what the noble Lord is going to say—that seeks to provide a work experience for young people has to be looked at afresh. I think the time has come when it has to be looked at afresh. We cannot have these hard and fast and rigid lines between this activity and the other. I can see no reason why they cannot both continue.

I want to say here and now that the Manpower Services Commission has behaved extremely generously to this particular organisation over the six years that it has been going. They have had hundreds of thousands of pounds. Without that help, it would have been impossible to channel 850 people and give them about a year's work experience through the centre. They were looking forward this year to a grant of something like £700,000. I think my figures are right. It is a sizeable venture. The amount that the Manpower Services Commission has given year after year since 1976 has been increasing. I should like to say that the Manpower Services Commission has in fact made a remarkably generous contribution to that, and to many other similar organisations. But what grieves me is that this is likely to come to an end.

I took exception when I heard that they were going to be cut off in about a month. There is some disagreement between me and the Government as to whether it really is a month or whether in fact they were given longer notice. The fact is that, so far as I can tell, whatever notice they were given was not much longer than that. I want to ask your Lordships is it reasonable, when an organisation has been going for six years and has made a contribution of this kind, to expect them to cease within one month, which they need not do if they will conform to the required criteria, which I understand are exclusively community enterprise programmes and not the other activity that they are engaged upon?

Following the discussions that the right reverend Prelate and I had with Mr. Michael Alison last week, we were not given any promise. I do not know whether the right reverend Prelate has been given any since. But there was some suggestion, "It is due to finish at the end of June. Perhaps it could go on until the beginning of September ". But the Government department concerned is being totally unrealistic if they think that an organisation of that size and, if I may say so, that calibre, can completely reorganise within a period of three months.

I have had some discussion with this organisation recently, I am sure that the right reverend Prelate has too, and they are willing to conform. They realise that if this is what is required of them, then they must meet the requirements. But what I want to say to the Government is that it is unrealistic to expect them to be able to do so by the beginning of September. What I should like the Government to do—because I presume that the Manpower Services Commission has to get authority from the Government to do what it is doing —is to give the Manpower Services Commission authority to continue to grant-aid this organisation until 31st March next, which is not much more than six or seven months. Within that time they will be able to meet the criteria expected of them now.

The Government have a vested interest in this. The Government have a vested interest in keeping people at work, and of finding work for people who have not got work to do. But they have a far greater interest, or should have, in keeping young people employed even if it is only giving them work experience for one year. I have seen some of the stuff they have turned out. It amazes me what people who had no equipment, no experience, no knowledge of what had been done there when they went there, had been able to do and had done. I recognise that they must concentrate on the community enterprise programmes and, as 1 say, they are quite willing and happy to do that. But I feel that they have to be given time to be able to do this.

I have tried to put the position fairly. It would be lamentable if they were not permitted to carry on. I do not want to deal with the whole question of community enterprise programmes because I am hoping that the noble Lord, Lord Kilmarnock, will have something to say about it. 1 hope your Lordships will feel at the end of this short debate that it is important that something is done so far as this particular organisation is concerned.

6.47 p.m.

Lord Byers

My Lords, the House will be grateful to the noble Lord, Lord Wells-Pestell, for raising this question of the community enterprise programme and particularly the plight of Elephant Jobs. I have been in correspondence with the Secretary of State for Employment and the Manpower Services Commission over Elephant Jobs in the past few weeks. I was grateful for the extension of their life by three months but, as the noble Lord said, this time is running out and, so far as I can see, they are due to close by the end of June.

I should like to support everything that the noble Lord has said. I hope that in the time that is left, and in a further extension (if, as I hope, it will be granted), the importance of keeping the project, particularly Elephant Jobs and others in the community enterprise programme, in being will be recognised as part not merely of a contribution to employment but as a contribution to social policy itself. I have knowledge of two of these projects; not only Elephant Jobs but also the Burnbake Trust, which is in the same position and is doing a very good job indeed.

Marks and Spencer, to whom I have acted as a consultant on community involvement over the last five years, has helped both of these projects by providing people either to run them or to help run them. The people we have seconded to do this job have been extremely impressed by the transformation of these trainees, these 18-year-olds and older, as a result of the training they have had. This is something which I would be loath to destroy, because once you see what they have been able to achieve in a year you realise what a tremendous social contribution they have made.

The training which they get in the 12-month period is not in any way limited to training in a craft or a skill. They get that, but that is probably the least important facet, important as it is. The point that has to be hoisted in is that they learn while they are there the discipline of the workplace. They learn to arrive on time to get up early enough to be there by eight o'clock; they learn how to behave; how to maintain reasonable standards of hygiene and appearance; the use of acceptable language, not an easy thing to teach; consideration for others; they learn about quality control and what it feels like to have something returned to them as being not up to standard. Those are important aspects of the training they receive. In addition they improve their literacy and life skills. They also produce and sell things and I can see nothing wrong in that; it is important that they should have the experience of being able to come up to the standards required in the market place.

We cannot afford to close down that type of project today. Instead, we should be increasing the capacity of the community enterprise programme from 30,000 to 60,000 because we have here the chance to defuse, to their own advantage, many of those who would otherwise be among riot leaders in high risk areas of our inner cities. From what one can see of the way they behave during their training, one of the first lessons they learn—they confess it quite openly—is that they do not want to go back to getting into mischief because of having nothing to do. They want to have a job from eight o'clock until the workshop closes, and it is the turning point in the career of many of them.

Nothing should be done to disturb, for example, the picture-framing activities of the Burnbake Trust. It seems excellently run, the people are getting a skill and selling their products, but they are not undercutting others. So far as Elephant Jobs are concerned, I understand there have been problems over what is called (I do not know the details) financial accountability. The suggestion has been made that their operations are outside the scope of the existing criteria for a community enterprise project; that is, the criteria agreed between the Secretary of State for Employment and the Manpower Services Commission.

On that issue I would make two suggestions. The first is that financial accountability should be dealt with in the normal way, by bringing in accountants to ensure that the financial systems are improved and that they are given systems which they can operate so as to make sure they are financially accountable. I am sure they would accept that. Secondly, so far as the criteria are concerned, if it is difficult to bring the project within the existing criteria, the criteria in a case like this should be reviewed. It is easy to close down a project of this kind. It is extremely difficult to start it and build it up again.

Those of us who are in the business of job creation—indeed, that is the business we are all in; every one of us is interested in the subject because we want more jobs created—are struggling and striving to encourage people to put up projects which will take our young people off the streets and give them an opportunity of learning something worthwhile, as in this case, not just immediately but, one hopes, for the rest of their lives. It is terribly disheartening to those of us who are interested in job creation—be they small businesses, training workshops or whatever—to be told that a project which is going very strongly and is doing such good work must be closed down. I hope the Government will think very seriously about the whole project and, before taking any action to close it down, will visit these two units and others.

6.54 p.m.

The Lord Bishop of Southwark

My Lords, we have had two excellent speeches from the noble Lords, Lord Wells-Pestell and Lord Byers, and I hope the House will forgive me if in some respects I cover something of the same ground; it is sometimes a help if the same points are made from a slightly different angle, and I want strongly to support all they said about Elephant Jobs. I first heard that name about a year ago, shortly after I had come south to my present diocese, and the speaker was Canon Peter Challen, a senior chaplain in the South London Industrial Mission and chairman of the board of Elephant Jobs. I admit that when I first heard the name I was rather intrigued, thinking it might have something to do with a product rather than, as it turned out, an area, but I quickly learned. I quickly learned too, as noble Lords have heard, that it is a major enterprise; it must be one of the largest funded by the MSC, and it involves a substantial commitment by many organisations and individuals, many of them in a voluntary capacity.

Earlier this year, I heard from a number of quarters that Elephant Jobs were threatened with imminent closure. The first threat actually came some months ago, and I thought it might be helpful to the House if I read an extract from a letter which I received at that time from the Vicar of St. Matthew's, Brixton, which underlines one of the points that has been made. He wrote: It has been the most successful of all the enterprises run in South London"— he means of this kind— and, speaking as the Vicar of Brixton, I can say that many young people from this area have been, and are, employed by it". He and others were devastated by the possibility that it might have to go and have urged me and others to do all we can to try to avert that. Since then, there has been an extension, which is shortly to run out, and some of the difficulties have already been resolved.

Both noble Lords spelt out clearly the kind of background to the problems which remain. The key problem, as I have understood it, centres both on the definition of "community benefit" within the community enterprise programmes and the speed with which an organisation like Elephant Jobs can change some of its present activities while remaining viable. From the many conversations, including the helpful ones, to which reference has been made, with the Minister of State—I was most grateful for the opportunity to have those conversations—it appears that key problem can be laid out in at least three ways.

The first is that it had been known that there were difficulties relating to the definition of "community benefit" in relation to this particular craft section for some months, and I think it is fair to say that there was initially, and still is perhaps, on the board and elsewhere, some resistance to the idea that change would have to come, if only because the definition seemed to be capable of varied interpretation, as has been said. The enterprise had been running happily for some years without any question being raised about that, and it has been an important part of the activities. There was, therefore, a very understandable hope that the MSC might be in a position to continue to be a little more flexible.

It could also be argued—indeed, I would want to argue the point—that a phrase like "community benefit" should include the whole question of how you are helping the people involved, rather than just thinking in terms of the particular things you may be doing for this centre, that club or whatever it may be. The fact that you are providing people with new or further skills in the all-important aspect of work experience is of itself an enormous community benefit. I put it in that positive way first, though there is a negative side, too, in that you are perhaps also doing something to avoid the increase of social tension in areas of high unemployment. That, therefore, is the first point; that there was, so to speak, for that very understandable reason, a certain slowness to respond to the sudden new threat.

Then came the realisation that, if action had to be taken, it would be difficult to find alternative outlets for products of such a rather particular, high quality kind because they are, after all, not the sort of things which are required by, say, local youth club. They do not need hand-made rugs or hand-made pottery. Other people are glad to have those in their homes and are glad to pay money for them; and in some cases they have replaced goods imported from abroad, which in itself seems to be quite significant. That also presents a considerable problem—how do you find either a new market for the goods, or change the activity into something different, given that you have the particular equipment, machinery, and so on?

So while I think that we all appreciate that the MSC is operating under its particular constraints—and that includes applying a kind of three-month rule if a particular activity is not conforming to the rules; I realise that a national organisation is trying to maintain consistency—Elephant Jobs is operating under equally great, I would say much greater, constraints in trying either to find new markets, or to find new products which can be made with the existing equipment that it has.

I want to add my own small plea to that which has already been made on behalf of many people, that the enterprise, if it has to change, be given enough time to change in the ways required. That cannot be done in the next three or four weeks, it really cannot. Alternatively—and I suppose that it would be better from most points of view—perhaps a little more flexibility can be built into the whole definition (which we shall be hearing more about) of community benefit in such a way that the enterprise might be able to continue this extraordinarily valuable piece of work that it is doing alongside so much else.

7.2 p.m.

Lord Kilmarnock

My Lords, the plight of Elephant Jobs has been most eloquently put by the noble Lord, Lord Wells-Pestell, and backed by the right reverend Prelate, and the noble Lord, Lord Byers, has set the community enterprise programme in a slightly wider context. Among the main criteria listed for community enterprise schemes we find included economic benefits to the community", which is the phrase invoked by Elephant, as I understand it, in its defence. Then there are a number of main headings under which eligible schemes are listed. These are: environmental improvement, provision of social amenities; and social and cultural work—for many of which there will be no off-setting payments received. But there is no reason why saleable goods and services should not qualify, and indeed it is so provided in the sponsors' handbook, in paragraph 24. I think that the noble Lord, Lord Wells-Pestell, was a little doubtful about this, but it is certainly in the sponsors' handbook.

Logically craft production should also be possible. Indeed it could be argued that some of the products of craft training are likely to be saleable goods. Elephant apparently produces hand-tufted carpets, silk screen prints, jewellery and pottery, as the noble Lord, Lord Wells-Pestell, has told us. But it seems to be the carpets that have got it into trouble by achieving a certain amount of commercial success; they have actually made money. According to the rules, trading receipts have to be paid back to the MSC, which seems fair enough so long as wages and some running costs are subsidised. But it seems a pity that immediately anything is sold over the counter, the MSC seems to get cold feet and wants to withdraw abruptly, quite regardless of whether or not the enterprise is in a state of commercial take-off. I hasten to add that I am not in any sense an enemy of the MSC. In fact shortly after the Recess I shall be introducing in your Lordships' House a debate on the MSC Youth Task Group Report, for which I have the greatest admiration.

The threat of sudden withdrawal of support is bound to make sponsors think twice before entering the rather onerous covenant required of them. I have recently, for example, become aware of an aborted scheme—it did not come off—in North London, where the local authority nudged some qualified people in the direction of a craft workshop which would have done some contract sewing work for local schools and other institutions, as well as design work of its own. A number of keen, young trainees would have been taken out of unemployment. What happened? No sponsor could be found. Approximately £63,000 would have to have been put up for a year for three instructors and six trainees; the operation could be closed within four weeks, at any time; and the fact that all the money earned had to be immediately ploughed back foreclosed on the possibility of a viable business coming into being at a later date. In short, although all the ingredients were there, no one would take on the responsibility for it. Enthusiasm ebbed and turned to bitterness. For one of the promoters CEP became a no-hope Government scheme, panacea, a cover-up for gross ineptitude and inability to tackle unemployment at grass-roots level". Well, it is a pity that that kind of bitterness should be created quite unnecessarily. I think it has to be accepted that CEP builds in quite heavy disincentives, in particular to private sponsors. Of coul se, I understand about accountability for public funds and possible shortcomings of those unaccustomed to accounting procedures. But we must get this in proportion. None of this is a huge bonanza for anyone. As Elephant's directors say very frankly, in, I think, paragraph 5.2.2(9), in answer to their own question: Has there been any secondary private gain on the part of sponsors?— it is a matter of opinion, but probably not, other than experience gained". In essence these schemes are an effort of good will and hard work for low material reward, or they are nothing.

I was slightly alarmed when the noble Lord, Lord Wells-Pestell, left the broader issues in my lap, because I thought that, with his much greater experience, he would probably refer to them himself. However I think it is just worth taking a quick look at the future of the community enterprise programme—which was touched on by the noble Lord, Lord Byers, too— because I believe that it has a very important role to play in the future. The CEP evolved out of STEP, which had become restricted to special development areas in inner cities. Its importance is that it casts its net wider, and now that the number of long-term unemployed is in the region of 1 million—1 million, my Lords—its potential clientele is very large indeed. Not surprisingly, there have been calls for its expansion. The MSC itself wanted 60,000 places for 1982–83—I think that the noble Lord, Lord Byers, also set his sights at 60,000 places—and was restricted to 30,000 by the Department of Employment. I personally regret that. Youth Aid called for a guaranteed place lasting 12 months for all who are eligible. This is certainly desirable in the long run, but I doubt whether it could be achieved except in a number of stages.

In the meantime, it seems to me that the first step should be to advance to the offer of a place to all those aged between 19 and 24 who have been unemployed for six months or over; and here is my first question to the Government. Can the noble Lord tell us whether the Government will support this objective, and if not, what do they propose to do about this age group, which can really not be said to be any less, or much less, disadvantaged by unemployment than the 16- to 19-year olds, about whom we are all so rightly concerned?

The next point I want to make is that whatever the numbers to be catered for under the community enterprise programme, the role of the sponsor is absolutely vital, and we shall need not only public sector sponsors, such as local authorities, but private sponsors, voluntary bodies, enterprise trusts, and so on as well; other wise we have no hope of meeting the needs. But if sponsors are presented not only with a formidable set of obligations, but also with uncertainties over interpretation of the rules, they will simply, and quite understandably, not come forward, as in the case that I outlined earlier.

I can myself almost off the cuff think of a number of ways in which the sponsor's position could be made less unattractive. First, the regulations should not be changed at short notice, or subjected to capricious interpretation. The noble Lord, Lord Wells-Pestell, touched on this. Secondly, the phrase, economic benefit to the community", should be interpreted with some imagination; or if it is not to be treated with some flexibility, what in fact it really means should be clearly specified. Thirdly, where goods and services are traded it would be sensible to allow a moratorium of, say, two years on the return of any trading income, provided that it is put to reserve or reinvested, or otherwise used to build up the enterprise. It would then be much easier to judge whether it had any hope of becoming self-supporting. Finally, it should be accepted that even where the production of goods and services does not approach this point, such activities do make a valuable contribution to training, employment, and morale—a point that I think has been made by all noble Lords who have spoken so far—and are therefore deserving of support from public funds.

I am not asking the noble Lord, Lord Lyell, to accept or reject any of these ideas this evening, because I seriously think that they require further study and debate; but I am asking him to agree—and I think he can hardly fail to do so—that the whole question of sponsorship should be reviewed. This point was also made by the noble Lord, Lord Byers.

Next, I want to ask the noble Lord whether the MSC has considered the cost to the Government if a withdrawal of one-third of the present level of support brings about a collapse of Elephant Jobs. The aim appears to he to save some £230,000, but if 150-odd people become unemployed as a result, even on the Government's own estimate made in 1980 the cost in benefits, revenues foregone and national insurance contributions would be in the region of £500,000 a year; and if more recent estimates are to be given credence, as I think they should, the cost could well equal the whole of the £700,000 grant. All that would be achieved is further misery and disillusion at little or no real saving. I simply cannot believe that the MSC intends that or that the Government want that.

In conclusion, my Lords, when the noble Lord comes to reply will he not agree that the queries that I and other noble Lords have raised, and the considerations that I have myself tried to advance, are in fact all good reasons for helping Elephant to put its house in order? I think the noble Lord, Lord Byers, said that they should be given the free facility of proper accountants coming in and telling them how to do it. Surely these are good reasons for helping Elephant to put its house in order, if it is in fact in breach of some minor regulation, rather than for harassing it out of existence. Is not the restoration of the threatened reduction, at least for one year or to the date that the noble Lord, Lord Wells-Pestell, suggested, the only fair and sensible course?

7.12 p.m.

Baroness Ewart-Biggs

My Lords, I, too, should like to thank my noble friend Lord Wells-Pestell for raising this very important subject of the future of Elephant Jobs, and also, in a more general way, the subject of the future of community enterprise programmes. I feel that after the previous speaker there is little I can add, but my reason for wishing to say a few words in this debate is because of my interest and personal involvement in an organisation in Paddington which is called the Beauchamp Lodge Settlement, which is one of a small group of voluntary organisations in Westminster that sponsors an adult employment scheme similar to Elephant Jobs. It is in this way that I have become acquainted with these job schemes generally, and have also been made very much aware of the important contribution that Elephant Jobs have been making to the community.

So, in the first place I can really only reiterate what my noble friend and previous speakers have said: there is an overwhelming case for continuing the grant to Elephant Jobs. No one could deny that the need for the scheme is absolutely unequivocal, operating as it does in a deeply-deprived area of South London where, as we know, the unemployment figures arc well above the national average, and operating as it does in an area which contains many coloured communities. It is indeed a fact that out of the 154 workers employed by Elephant Jobs, who are all threatened by the withdrawal of its grant, one-half are black and many are living in the Brixton area. Indeed, as the noble and learned Lord, Lord Scarman, said in his report on the 1981 Brixton riots: Unemployment is a problem which faces both white and black people, but there is evidence that its weight falls disproportionately heavily on black people". Furthermore, there can be absolutely no doubt that Elephant Jobs have absorbed disabled workers and ex-prisoners from the dole queues, and have truly helped some of the most disadvantaged members of the community.

So, as I have said, there really can be no doubt that Elephant Jobs are playing a vital role in relieving social pressures caused by unemployment in an area where social pressures are already very great indeed. Having agreed on that, as my noble friend and the previous speakers have said we are just left with the question of whether or not the Elephant Jobs scheme does or does not fall within the meaning of the Manpower Services Commission's criterion for such schemes. It is a matter of defining what constitutes an appropriate contribution to the community, as again previous speakers have said. Elephant Jobs say most adamantly that their employment schemes and craft and building sections do without doubt bring great benefit to the community; and, as I have already said, and as other noble Lords have said, there is tangible evidence that this is so. On the other hand, the Manpower Services Commission say that Elephant Jobs have deviated from the guidelines laid down regarding community benefit criteria, so clearly an impasse has been reached.

Thus I, too, should like to advocate most strongly that if the Government cannot agree either that Elephant Jobs craft workshops do fall within the meaning of the criteria laid down, or, failing that, that they will amend the criteria to accommodate them, then surely the Government should, as we have all advocated today, allow Elephant Jobs a stay of execution for at least 12 months to enable them realistically to seek alternative funding. This, surely, is the least that the Government can do.

Finally, coming out of my slight experience of the work being done by the Beauchamp Lodge Settlement in the Paddington area, may I conclude with a few comments on the subject of community enterprise programmes in general, and the anxieties being experienced by those involved in them. In the light of the present employment situation it is very important for them to know, first, what is the Government's exact attitude towards the present employment schemes. Secondly, it is very important to define what the precise co-ordinating system should be among the Manpower Services Commission, the local councils and the voluntary organizations—in fact, all those bodies concerned with employment schemes.

So, on the first point, what undertaking can the Government give that the Manpower Services Commission's work and policies, as agreed at recent meetings, will continue? Furthermore, will the Government make a clear definition, as they see it, of the community enterprise programme and its community role? Because there can be no doubt that such issues as these are put in cause when successful schemes such as those which have been firmly established by Elephant Jobs are challenged. If the Government wish to change the rules, then those new rules must be clearly defined and understood.

Finally, on the question of the actual process of co-operation between all agencies, both statutory and voluntary, engaged in this all-important task of reintegrating into the community those of its members who through no fault of their own have fallen outside the system, there is concern that the apparatus set up to co-ordinate these efforts is no longer adequate to deal with the present situation. The Manpower Services Commission have had failures in planning, it is felt. In the first place they expected local authorities to be the main sponsors for programmes, whereas in fact it has been the non-statutory bodies, already worried about unemployment, who have responded more quickly than councils. In the next place, the Manpower Services Commission—and this is yet another fear which has been expressed to me from the Beauchamp Lodge Settlement—have not established any feed-back system whereby they might learn from experience and consequently alter schemes accordingly. All in all, the voluntary organisations regard the role of the Manpower Services Commission more as that of a policeman overseeing schemes rather than acting as a partner within them.

From the point of view of the voluntary organisations actually sponsoring schemes, I know that the Beauchamp Lodge Settlement, for one, find they that are not themselves properly prepared to receive workers. Their own supervisors need training in administration and managerial skills. They need to be more informed on unemployment law, PAYE, health and safety, et cetera; and through having been unemployed the workers they take on have low morale and very little confidence. Thus the burden for the sponsoring organisations is especially heavy. Their employees are finding it difficult to create the structure in which successfully to carry the burden. They feel strongly that they need help in building the structure; otherwise, they fear, their present efforts in taking on workers merely provide a cosmetic effect of keeping people off the unemployed list.

In my view there is no doubt that the crisis currently experienced by Elephant Jobs Limited has put many questions at issue. As to the question concerning the all-important area of re-channelling to the common good the energies and talents of those people who drop outside the system, it seems vital for the Government to face to up those questions and answer them in their interest and in the interest of all concerned in an area of such great importance.

7.20 p.m.

Lord Lyell

My Lords, I am sure that the whole House will feel that it is a tribute to the noble Lord, Lord Wells-Pestell, that the House is so full on an evening like this to hear the noble Lord put his case; and he put the case of the matter of Elephant Jobs very well before us today. First, I should like to thank the noble Lord, Lord Wells-Pestell, for his traditional courtesy. As he has already explained to your Lordships, he had one brief meeting with me and another meeting, in conjunction with the right reverend Prelate, with my right honourable friend the Minister.

I should like to express the gratitude of my department to the noble Lord for his remarks about the generosity and help given by the Manpower Services Commission in this and in other fields, but the subject which we have before us tonight and which has been raised eloquently by the noble Lord, Lord WellsPestell, and mentioned by every other speaker, is the position of Elephant Jobs Limited. As your Lordships will be aware, the case has been in the news over the last few weeks and Elephant Jobs have put their own case in a very able and vocal manner. I hope that this evening, the Unstarred Question asked by the noble Lord, Lord Wells-Pestell, will give me the opportunity to put the case as the Government see the position.

As your Lordships are aware, Elephant Jobs has been funded since 1976 under the Government's special employment programmes; first, under the jobs creation programme, then the special temporary employment programme and, most recently, since 1st April 1981, under the community enterprise programme. In order to improve the cost effectiveness of all these programmes, the qualifying criteria have changed in various respects from programme to programme. Under the community enterprise programme, the two main relevant criteria are that the jobs supported under these programmes should not put real jobs at risk and, secondly, that the work done had to be of community benefit.

Community benefit among other things, is, essentially the production of subsidised goods and services which would not normally be produced but for the programme—for example, the clearance of a derelict site or the construction of an adventure playground. The work done under the programme must be of benefit to the community at large and not simply the limited number of people who are provided with jobs under the programme. For this reason, schemes which produce goods or services for sale on the open market normally do not qualify for support because to fund them might put real jobs in other organisations at risk.

Out of a total of 111 places approved for funding under the community enterprise programme at Elephant Jobs, only about 40 places are affected by the dispute over the interpretation of "community benefit". I should like to explain in more detail the reason why the MSC feels unable to renew funding for these 40 places. Elephant Jobs are receiving payment in full for their managers'/supervisors' and employees' wages as well as a contribution towards their running/operating costs. All this is paid by the Manpower Services Commission. Elephant Jobs are competing in the same market place with private industry for sales of their jewellery, pottery and carpets, but private industry has to pay wages and operating costs from their sales. For this reason, Elephant Jobs are at a distinct advantage. They could be putting real jobs at risk or frustrating the creation of real jobs.

Furthermore, at a meeting on 11th May this year, Elephant Jobs met their constituency MP, the right honourable gentlemen Mr. Bob Mellish, and they also met the chairman of the MSC. The chairman advised Elephant Jobs to bring these places within the qualifying criteria of "community benefit". If they could not bring these jobs within the qualifying criteria, they were advised to try to transfer the jobs to the workshop supported by the youth opportunities programme, where there are different qualifying criteria. I understand that Elephant Jobs see this particular matter as a question of principle and, as far as we know, have apparently not heeded this advice that they were given. In not heeding the advice, they are putting all their other places which are approved under the community enterprise programme and the youth opportunities programme at risk. In total, they have 150 places approved under these programmes and are currently employing 50 people. I think your Lordships will be interested to learn that the hundred or so vacancies could be filled twice over in the Southwark/Lambeth area, which includes the area where Elephant Jobs carry on their work. Also, the community benefit aspect was examined by the MSC special programmes board meeting on 18th May this year. This independent board has representatives of employers, trade unions, educationalists and voluntary organisations on it. They all concluded that the definitions as now. applied by the Manpower Services Commission was the right one. I understand that the chairman of the MSC has written to my right honourable friend the Minister of State at the Department of Employment giving him details of their decision, and my right honourable friend is now considering the chairman's and the special programme board's recommendations.

The other aspect of Elephant Jobs which is causing concern affects some unsatisfactory financial features. I must say that there is every hope that they will be resolved, Elephant Jobs have now stated that they are resolved and, as we have been discussing this, we can now say definitely that an auditor from MSC will be verifying this in the near future with the assertion of Elephant Jobs that this problem has been overcome. I would stress that officials of the MSC have devoted a considerable amount of their time to helping Elephant Jobs over these particular financial issues but I hope your Lordships may hear with me if I spell out in detail the matters of substance which are involved at the moment. First, Elephant Jobs have operated a second bank account through which receipts from all sales made by the scheme were passed. When remitting these funds to the scheme, Elephant Jobs Limited deducted 23.08 per cent. The MSC requires all revenue pertaining to schemes to be remitted to the scheme's account and MSC is now trying to establish from Elephant Jobs Limited in writing the reason for this deduction.

Between November 1980 and July 1981 the scheme undertook work on private dwellings for which it appears no invoices were raised at the time. This is wholly contrary to the Manpower Services Commission criteria in respect of work being of community benefit. This work provided private gain for its recipients and this was clearly unacceptable. I believe that the situation has been partially resolved in that invoices have now been issued and one of them has been paid. This is one of the matters on which the auditor will be reporting.

The last factor is the charitable status of Elephant Jobs itself. The Manpower Services Commission suggest that sponsors under the community enterprise programme should obtain charitable status and so avoid paying a national insurance surcharge of 3.5 per cent. Elephant Jobs do not have this status and so this is resulting in a additional expenditure for the commission to reimburse. This matter is still awaiting resolution because Elephant Jobs do not wish to obtain charitable status and the Manpower Services Commission are awaiting the reasons for this standpoint.

It has been suggested in various quarters outside this House that these are matters of little substance. I hope your Lordships will agree, in view of what I have described, that this is not the case. Some other matters affecting rents, VAT accounts and assets registers have either been resolved or are well on the way to resolution following the audit last year by the Manpower Services Commission.

The Government, the Manpower Services Corn-mission and noble Lords who have spoken this evening are all in agreement that the jobs sponsored by Elephant Jobs under the community enterprise programme and the Youth Opportunities Programme are worthwhile and useful. However, this does not mean that all Elephant Jobs schemes can automatically continue to receive indefinite funding regardless of whether they meet the agreed rules. Let me summarise the present position and the steps the Manpower Services Commission have taken to try and keep Elephant Jobs going.

First, despite serious departures from normal MSC accounting procedures (which were well known to Elephant Jobs), Elephant Jobs were allowed three months funding after their schemes expired in March this year to put matter straight. Secondly, MSC officials went over every aspect of the financial problems with Elephant Jobs offering help and advice and suggesting ways of resolving the problem. Considerable MSC staff resources were devoted to Elephant Jobs, offering free financial advice. Thirdly, MSC have discussed the qualifying criteria of both CEP and YOP and have suggested ways in which the 40 places affected can be brought within the criteria. Finally, only yesterday, the chairman of the MSC offered an extension of funding provided that Elephant Jobs bring their schemes into line with the criteria.

In conclusion, let me stress that there is no reason why Elephant Jobs should close. They claim they have resolved the financial problems. If that is so (and it will be examined by an auditor) then these problems cease to exist. The remaining difficulties affect only 40 to 150 places currently funded with Elephant Jobs. Even if the difficulties cannot be resolved, there seems no point in closing down worthwhile opportunities for the sake of those 40 places, of which 15 are at present filled. But I believe that the difficulties can be resolved, and MSC have offered suggestions as to how this might quickly he done.

I should like now to try to answer some of the questions raised. 1 hope I will cover most of them. I shall examine the questions very carefully and will write to your Lordships if I leave any gaps.

Lord Wells-Pestell

My Lords, when the noble Lord has finished with his reply to the questions, will he sit down very slowly to give me the opportunity of asking a question before he sits down?

Lord Lyell

My Lords, I cannot guarantee to sit down so slowly as to depart wholly from the procedures of your Lordships' House. If the noble Lord could make it a very quick question I could probably give him the benefit of the doubt; but I could not guarantee to answer his question tonight. I hope that will keep him in anticipation. We have had so far a fairly good run on this particular problem. I shall try to answer most of the points that he and other Members of your Lordships' House have raised this evening.

The noble Lord, Loaf Wells-Pestell, raised one particular point about the local trade unions who he understood did not object to the jobs which were sponsored under the programme. This may well be the view of the local trade union representatives. I doubt whether it is a view that is shared by the trade union representatives of the special programmes board, and indeed the trade union commissioners of the Manpower Services Commission. The production of these goods must be in direct competition with private industry which is producing the same type of items. As I have already described, the cost of the production of these goods is not comparable.

Great play has been made of the number of jobs which are at risk. I would stress once again that there are 150 places at Elephant Jobs which are approved under the community enterprise programme and the Youth Opportunities Programme. Of these, 111 places are approved under the community enterprise programme which has been the main thrust of the noble Lord's Question this evening. As I have mentioned, only 40 of these 111 places are affected by the community benefit definition and 15 of these particular places are currently filled.

The noble Lord, Lord Byers, raised two major points. He mentioned financial accountability. I hope I stressed in the course of my remarks that the Manpower Setvices Commission's auditor is helping to try to resolve these problems which cover all aspects of auditing —not just finance, but also stock control and one or two other aspects of the auditor's task. It is the responsibility of each sponsor in the scheme to see their way to keeping adequate records. As I have said in my main remarks, I hope that this problem is either resolved or is very near to resolution.

The noble Lords, Lord Byers, Lord Wells-Pestell, and others referred to the problem of the qualifying community benefit criteria. When the community enterprise programme was introduced in April 1981 there was a shortage of sponsors. As I am sure all of your Lordships are aware, Elephant Jobs had worthwhile objectives so funding was very definitely continued. Because of the large number of schemes which are coming forward for support which come within the qualifying criteria, the Manpower Services Commission have had to review these schemes where the qualifying criteria for support are more doubtful. This is one area where Elephant Jobs are at the moment found to be situated.

The right reverend Prelate also raised the point of the condition of community benefit in Elephant Jobs. As I am sure he is aware, and as your Lordships will be aware, jobs supported under the Government's special employment programmes must not put real jobs at risk. To do so would mean that support would be withdrawn by employers and trade unions on whom we rely for the operation of these special measures. The community benefit condition ensures that real jobs are not put at risk. The jobs supported under the community enterprise programme are benefiting the community at large and not just a narrow sector of it.

The noble Lord, Lord Kilmarnock, raised a number of pertinent and rather detailed points. I shall attempt to cover the majority of them. He first of all raised the problem of the guarantee, as he called it, of a place for the older young person. I think he classified them as from 19 to 24 years of age. I understand that there are approximately 250,000 young people between the ages of 19 and 24 who have been unemployed for more than six months. A programme on this scale would have to be financed by taxation or borrowing. Therefore we think it would jeopardise jobs elsewhere, but my right honourable friend the Chancellor of the Exchequer has pointed out that a new programme to help the long-term unemployed will shortly be launched to help 100,000 people, at a net additional cost of £150 million. So I hope we can go some way towards covering that aspect which was raised by the noble Lord, Lord Kilmarnock.

The noble Lord also raised three other points, one of which was the cost of making Elephant Jobs' employees redundant. Elephant Jobs is not being closed to save money but because it has not yet satisfied the rules. No money would be saved if Elephant Jobs closed, because the places would immediately be taken up by other sponsors in the Lambeth and Southwark areas, as I mentioned earlier. I hope the noble Lord will accept that the community enterprise programme in no way discourages sponsors. We have found that there is no shortage of sponsors; indeed the programme is heavily over-subscribed, and clearly many sponsors are happy to come forward. The noble Lord, Lord Kilmarnock, raised a point on economic benefit, which was also mentioned by other speakers, including the noble Lord, Lord Byers. I should like to say that if it were a sufficient criterion merely for jobs to he provided, then the great firms mentioned by the noble Lord, Lord Byers, such as Marks and Spencer, Woolworths or any other trading company, would qualify for subsidy under the scheme. I can hardly think that would be the intention of your Lordships, especially as regards the special help we are trying to give under the community enterprise programme and also under the Youth Opportunities Programmes.

Lord Byers

My Lords, if I may intervene, when the noble Lord is taling about Elephant Jobs, is he giving any credit at all to the life skills which are taught at Elephant Jobs? To get a playground made is quite different to bringing people in at 8 o'clock and teaching them the life skills they need for work.

Lord Lyell

My Lords, if that is relevant to, and part of, the community enterprise programme, I am pleased to give credit to it. I am not sure whether it is. However, if I have not totally covered this point, then I will write to the noble Lord. I cannot be sure but I do not think the kind of programme which was outlined by the noble Lord, praiseworthy though it is, is covered under the criteria of the community enterprise programmes, or indeed is at issue under the 40 places filled with 15 persons.

In conclusion, I would say that if Elephant Jobs were to close it will be because they have failed to meet the requirements that are accepted by all other sponsors. Moreover, if they do close, the Manpower Services Commission will fund the same number of places elsewhere in this region, and so there will be no loss of opportunity. However, I hope, as do the Government, that they will not close, and I hope that all your Lordships who have spoken this evening will urge Elephant Jobs to seize the opportunities which have been, and will continue to be, offered by the Manpower Services Commission to keep their worthwhile projects going.