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The Impact of the Current Economic Situation

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The Impact of the Current Economic Situation House of Commons North West Regional Committee The impact of the current economic situation on the North West and the Government's response: the Government's reply to the Committee's First Report of Session 2008–09 First Special Report of Session 2008–09 Ordered by The House of Commons to be printed 11 November 2009 HC 675 Published on 19 November 2009 by authority of the House of Commons London: The Stationery Office Limited £0.00 North West Regional Committee The North West Regional Committee is appointed by the House of Commons to examine regional strategies and the work of regional bodies. Current membership Mr David Crausby MP (Labour, Bolton North East) (Chairman) Rosie Cooper MP (Labour, West Lancashire) Tony Lloyd MP (Labour, Manchester Central) Mr Eric Martlew MP (Labour, Carlisle) Geraldine Smith MP (Labour, Morecambe and Lunesdale) Powers The committee is one of the Regional Committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152F. These are available on the Internet via www.parliament.uk. Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at http://www.parliament.uk/parliamentary_committees/nw.cfm Committee staff The current staff of the Committee are Gosia McBride (Clerk), Duma Langton (Inquiry Manager), Tamsin Wallwork (NAO Adviser), Emma Sawyer (Senior Committee Assistant), Ian Blair (Committee Assistant), Anna Browning (Committee Assistant) and Nick Davies (Media Officer). Contacts All correspondence should be addressed to the Clerk of the North West Regional Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 0654; the Committee’s email address is [email protected] 1 First Special Report On 31 July 2009 the North West Regional Committee published its First Report of Session 2008–09, The impact of the current economic situation on the North West and the Government’s response [HC 696]. On 1 October 2009 we received the Government’s response to this Report in the form of a memorandum from the Minister for the North West. The memorandum is published as an Appendix to this Special Report. Appendix: Government response 1. It is vital that the North West retains skills in order to ensure the region is well positioned for the upturn. We are encouraged that witnesses reported that companies seem to have learnt the lessons of previous recessions and do appear to be doing all they can to avoid redundancies and retain skills in their workforce. We recommend that the Regional Minister continues to monitor this situation. (Paragraph 1) The Government agrees that actions aimed at avoiding redundancies and retaining skills within the region are important, and will remain a priority for the Regional Minister. Both the Joint Economic Commission for the North West, and the North West Regional Skills and Employment Board will continue to work to deliver initiatives to support individuals affected by the downturn through support for new skills and training. Apprenticeships are a key route to building the regional skills base, and the Government is committed to delivering significant growth in Apprenticeships for young people and adults across the region. 2. We conclude that Jobcentre Plus has, on the whole, dealt well with the challenges presented by the recession and has increased its staffing levels appropriately to meet the increased demand for its services. However, Jobcentre Plus must find a way to ensure that it is called in at an early stage when an employer is planning redundancies so that those affected can be given timely advice. We recommend that Jobcentre Plus and its partners continue to work with employers to achieve this. (Paragraph 24) The Government welcomes the Committee’s recognition that JobCentre Plus has responded well to the challenges within the North West, and it will continue to offer support to employers to ensure early intervention when redundancies are being planned. It has taken significant steps to improve the Rapid Response Service (RRS) for those businesses declaring 20 or more potential redundancies to the Insolvency Service. There are dedicated RRS managers in place working with regional partners to offer both earlier intervention and a much broader range of help and support. Advanced notification of redundancies are monitored weekly, alongside the monitoring of smaller scale redundancies. Collaboration with trade unions has also facilitated early access to employers and individuals in many redundancy cases. An Industrial Restructuring Group has been established in which NWDA, BLNW, JCP and LSC assess how the region 2 is responding to redundancies and ensure the conduct of joint responses, working with employers to ensure a smooth and efficient service is provided. 3. It is unfortunate that the restructuring of the Learning and Skills Council is taking place in the middle of a recession. In these circumstances it is vital that the transition is planned as carefully as possible. We recommend that the Minister considers the benefits of linking the skills strategy for the Skills Funding Agency to the Regional Economic Strategy and writes to us about whether this is possible and desirable in the North West. We also recommend that in its response to this Report the Government sets out what lessons have been learned in the North West following the gross mismanagement by the LSC of the further education capital programme. (Paragraph 30) The Government accepts there have been difficulties around the further education capital programme, particularly where successes led to an increase in demand for funding. The Government has accepted all the recommendations made in the Foster Review. In taking the recommendations forward, a dedicated project management group across both the LSC and the Department has been established. This has led to a new needs-based system which after an open and transparent prioritisation process, in consultation with the sector, has allowed the most urgent projects to begin this autumn. The Chancellor announced in the Budget an additional £330 million of capital funding which has allowed the LSC to give approval to a limited number of projects starting this autumn, and has also announced a continuation of the Further Education capital investment programme in future years. In the North West approval has been given to 4 colleges: West Cheshire, Furness, Wythenshawe and St Helens. The LSC hope to be able to announce that a project at the Manchester College will also be able to proceed following further discussions. The Government recognises the need to ensure a smooth transition for restructuring of the Learning and Skills Council. The current economic climate means that it is more important than ever that the skills system is able to respond quickly and effectively to the needs of employers and individuals. The Government is therefore actively considering the simplification of the skills landscape at the regional level. To this end, it is considering making the Regional Development Agencies the single body with responsibility for producing the regional skills strategy and acting as champion and advocate for skills at the regional level. The regional skills strategy, which would constitute an investment plan, would be integrated within the single Regional Strategy (which will replace the Regional Economic Strategy). Under this scenario, the Skills Funding Agency (which will replace the Learning and Skills Council from April 2010) would be responsible for allocating funds and managing the relationship with colleges and providers. 4. We conclude that the North West Regional Development Agency, Jobcentre Plus and the Learning and Skills Council appear to have developed a good working relationship in the region. We welcome this close relationship and recommend that these, and any successor, bodies continue to work closely together in the future to ensure the region is not disadvantaged by significant skills gaps in the future. (Paragraph 36) 3 The Government welcomes acknowledgment that its regional agencies are working effectively together. It will ensure that this close partnership continues through successor bodies to deliver strong regional outcomes on the skills agenda. This will be delivered through the Regional Employability Group, a sub group to the Regional Skills and Employment Board. The recent decision by the Secretary of State for BIS that RDAs will lead on strategic skills matters will provide the NWDA with the direct opportunity to address the skills demand in the region. Through the Regional Employment and Skills Board a Commissioning Plan will be developed which will be delivered by the Skills Funding Agency. The NWDA will ensure that the Regional Skills Strategy is fully aligned and integrated into the integrated Regional Strategy (RS2010). 5. We welcome the use of the Rapid Response Service and the Response to Redundancy Programme across the region where needed. However we are concerned that the effectiveness of the Rapid Response Scheme does not appear to be being monitored. We recommend that an exercise be undertaken to evaluate the programme in terms of outcomes for participants. We would also like to hear more from the Learning and Skills Council about the impact of the Response to Redundancy Programme in the North West once the programme is underway. (Paragraph 40) The Government does not accept that it would provide value for money to evaluate the Rapid Response Service (RRS) programme in terms of outcomes for participants. The RRS offers support for employers and individuals affected by redundancy, rather than as a programme for people looking for work. Jobcentre Plus at both a regional and local level monitors the take up (and decline) of support from employers. Systematic evaluation is therefore not straightforward. Firstly, the creation of a tracking system for individuals would be complex and highly labour intensive as many of the individuals who make use of the RRS do not need to access mainstream Jobcentre Plus activity.
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