YTS Funding and Mode B Schemes (Hansard, 11 February 1986)

§ Baroness Fisher of Rednal
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Secretary of State for Employment (Lord Young of Graffham)
My Lords, representatives of the local authority associations were involved in the development of two-year YTS and have met Ministers to discuss the new programme. A number of individual local authorities have written to Ministers and to the chairman of the Manpower Services Commission on the question of funding and the possible effects on current Mode B provision.

§ Baroness Fisher of Rednal
My Lords, is the noble Lord aware that it is very difficult for people to understand the Government's proposals when, on the one hand, they talk about targeting in on the inner cities and involving young people in the inner cities while, on the other hand, they squeeze financially, very seriously, those voluntary bodies that are operating Mode B schemes which give basic training skills to those youngsters unfortunately not able to get on employer-led schemes?

§ Lord Young of Graffham
My Lords, I am sure that all in your Lordships' House will accept that the most important element in the new YTS scheme is the young people. We are concerned to ensure that there is an adequate supply of places for young people. On Friday last week I visited the North-East and found that already, at this time, we have 94 per cent. of the basic places and 94 per cent. of the premium places either definitely or likely to be provided. Yesterday I was in the North-West, and there I found that 93 per cent. of the basic places and 91 per cent. of the premium places are definitely or likely to be provided. I was concerned with the formation and foundation of the original Youth Training Scheme. This is a considerable advance on where we then stood, this many months before the start.

§ Baroness Seear
My Lords, will the noble Lord agree that there is a great deal of anxiety, possibly some of it exaggerated, about the effect that the changes are going to have on the voluntary bodies? Can he make much clearer than has so far been the case—I say this in no criticism of anyone, because it is not a matter that it is easy to make clear—how the premium places will work and the extent to which they will meet the needs of the voluntary bodies? I find that there is a great deal of anxiety. Some of it, I suspect, is felt far more than is necessary.

§ Lord Young of Graffham
My Lords, the original Youth Training Scheme in which Mode B1 was the replacement for those young people who could not 101 find an employer, was paid for by the Manpower Services Commission on the basis of places provided and not on the basis of places filled by young people. This had the result in 1985 that the expenditure on unfilled places was £47.5 million. Of this, £35 million was spent on Mode B1 schemes. This was money not spent on young people but spent on providing trainers.
Under the new scheme, the arrangement agreed by the Manpower Services Commission with the TUC, the CBI and the local authority associations was that, in addition to the normal fee of £ 160 a month, there would be a premium fee of £110 a month per person on premium place schemes. This fee would be payable for only as long as young people were actually in these schemes. This seems an equitable way of dealing with the matter. Although we have received a number of representations from local authorities and some voluntary bodies claiming that this will provide them with some problems, we seem to have more than an adequacy of places throughout the country.

§ Lord McCarthy
My Lords, will the noble Lord take this opportunity to say that the Government accept the unique advantages of the Mode B scheme and that, although it is more expensive, it has a number of considerable advantages in that it narrows in on the unemployed and the long-term unemployed? Will he give an undertaking that the Government anticipate that at least the present proportion, the present distribution between Mode A and Mode B, whereby Mode B accounts for about 22 per cent. of the total number of places, will be maintained?

§ Lord Young of Graffham
No, my Lords; I wish that I could give that assurance. There is no question that the best scheme for the advantage of young people would be a place with an employer because it is an employment-based scheme. However, we all recognise that in some areas of the country there are some young people for whom immediate employment at the age of 16 is not appropriate, and, indeed, was not appropriate in the years long before there was a YTS scheme. But there are at present some 62,000 places in Mode B1. The highest number of youngsters in training in any one month so far, in 1985–86, is 48,000. Therefore, the balance, the difference between 48,000 and 62,000—some 14,000 places at best—have been empty. What the new scheme will do is to ensure that the money is spent only on young people receiving training. We should be concerned not to distinguish young people as between Mode A and Mode B, between sheep and goats, between those who can get places with employers and those who cannot. In premium places we shall be ensuring that young people, while they are in special places, will have their special needs met, as they deserve, and that when they go to employers they will receive the employment that all of them deserve.

Lord Hunt
My Lords, is the noble Lord not saying that in the matter of funding the Mode B scheme always has, and has always had, a lower priority than the Mode A scheme? Is this not particularly hard on young people who are not fortunate enough to find an employer and hard on those voluntary organisations 102 and others which have schemes to help them but are not receiving sufficient funds?

§ Lord Young of Graffham
No, my Lords. The representations that I receive continually, like those I received during my time as chairman of the Manpower Services Commission, are representations made by trainers, by those providing the places, and not by young people who occupy those places. The truth is that at all times there has been a considerable surplus of places on Mode B1 schemes. Last year, at its very peak during the last 12 months, there were, as I think I have told your Lordships, 48,000 filled places out of a provision of 62,000. So there has always been a more than plentiful supply of places. What we are trying to ensure is that the money spent on unfilled places is now spent on young people.

§ Baroness Macleod of Borve
My Lords, can my noble friend the Minister say whether he is satisfied that children leaving school are encouraged by staff within those schools to take this training?

§ Lord Young of Graffham
My Lords, it falls to the careers service to advise young people to go to the most appropriate place to receive their training. For many young people, if not the vast majority, the mode will be employers' places on employers' premises. For those young people to whom this is not suitable, we are concerned to ensure that there is an adequate supply of places. I am assured by the Manpower Services Commission that there will be such a supply. The figures that I have seen show that in all cases there is over 90 per cent. provision at this time.

§ Lord Northfield
My Lords, can the noble Lord say that there will now be some stability in the scheme for at least the rest of this calendar year and, one hopes, for next year as well? Is he aware of the distress and concern of sponsoring bodies like my own new town corporation, where we have had to hire supervisory staff, discharge them when the scheme has changed, hire more again when the scheme has changed yet again and then discharge them yet again? Is this not a bad way to treat devoted staff who are supervising the schemes? Can we not now, please, have some stability at least for a good period ahead?

§ Lord Young of Graffham
My Lords, it was announced some time ago that YTS was permanent. But I think all your Lordships' House should share in my concern for young people and not for trainers and those societies or associations that provide the training. In our initial desire to ensure that there was an adequacy of training back in 1983–84, when YTS first came on the scene, we provided for some 100,000 places of which some 82,000 came into being. We can now see that we require no more than 51,000 places to provide for all those young people who need this form of training. The number of young people leaving school each year is diminishing. We must ensure, whatever happens, that we always have a plentiful supply for them. I hope that this will not lead to any more closures, but at all times it is the job of the Manpower Services Commission to look after the needs of the young people.

§ Lord Gisborough
My Lords, is the Minister aware that there are very many small young firms which are not prepared to contribute toward having these youngsters? They would like to employ a youngster, but are not prepared to contribute and are very half-hearted because they cannot afford the cost. If for very small fledgling firms there could be some way round this problem more places would be available.

§ Lord Young of Graffham
My Lords, no. There is an adequacy of places. I am quite sure we shall find enough places on employers' premises and that those firms which have now realised the great advantage to them as well as to young people in taking part in YTS will know that what they are being asked to contribute is money that will be very well spent.

§ Lord Hatch of Lusby
My Lords, the noble Lord has given national figures. Is he not aware that in some localities the situation is very different? Is he aware that recently I visited YTS schemes along the south coast and was told there that they were expected to conduct two-year programmes on a budget for one year and that this would mean a reduction in their Mode B schemes, and in some cases the complete closure of those schemes? Is it not the case, as my noble friend has pointed out, when local authorities are hiring and then having to fire instructors because of lack of money, that this is destroying the whole basis of the scheme?

§ Lord Young of Graffham
My Lords, no. The concern of those of us who are concerned with the provision of schemes for these young people is to ensure that there is an adequate supply of places. There has been very good notice of the sort of changes involved. Those who have been provided with schemes—and there are many valuable schemes that come under the premium places—schemes which we are concerned to see continue, will go on with them and other arrangements will have to be made for those for whom the need has passed.
This is a matter for negotiation between the scheme providers and the Manpower Services Commission. If there are any schemes in particular difficulty that the noble Lord would care to write to me about, I will deal with that.

§ Baroness Fisher of Rednal
My Lords, can I ask the noble Lord whether he will visit Birmingham after he has made all the other visits, where I understand on quite reliable information that there are over 1,000 youngsters and 16 YTS schemes running Mode B that are in grave and dire circumstances and will not be able to operate after April?

§ Lord Young of Graffham
My Lords, I shall certainly undertake to visit Birmingham. I spend a great deal of my time on visits. But the most important thing is that we have sufficient places for those young people who need them. My concern cannot be with the continued existence of schemes whose need has passed.