Committee of Public Accounts: Press Notice


Publication of the Committee's 34th Report, Session 2007-08

Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:

"Ethnic minorities in this country have a much worse employment rate than the general population. The gap stands at over 14 percentage points, just 1.3 points lower than in 1987. If things go on as they are, it could take more than 30 years to eliminate the gap.

"The large amount the DWP spends on schemes to narrow this employment gap - £40 million each year - has so far met with little success. The Department's stop-start approach, trying one short-term project after another, has undermined Jobcentre Plus's efforts to increase ethnic minority employment.

"The DWP must now set itself a realistic but genuinely challenging target specifically to promote ethnic minority employment, backed up by a longer term, clear strategy which is more consistently implemented and whose progress is tightly monitored.

"Discrimination against members of ethnic minorities is still a major barrier to their finding jobs. There are others factors - including education, ability to speak English and the level of deprivation in the local area. The Department must take account of all these factors if its efforts to cut unemployment among ethnic minorities are to show real progress."

Mr Leigh was speaking as the Committee published its 34th Report of this Session which, on the basis of evidence from the Department for Work and Pensions and Jobcentre Plus, examined their efforts to increase ethnic minority employment and reduce the employment gap between ethnic minorities and the overall population.

There is a significant gap of 14.2 percentage points between the employment rate of ethnic minorities and that of the general population. Annually, this costs some £1.3 billion in benefits and lost tax revenue, and some £7.3 billion to the UK economy in lost output. The employment gap has changed little in 20 years and is only 1.3 percentage points lower than in 1987. The Department for Work and Pensions (the Department) is responsible for helping ethnic minorities into employment, largely through a range of services provided by Jobcentre Plus offices across the country.

Since 2002, the Department's strategy for helping ethnic minorities into employment has lacked continuity, consisting largely of short term pilot projects which had insufficient time to be fully effective, and have mainly been discontinued. This stop-start approach has had an adverse impact on Jobcentre Plus's efforts to increase ethnic minority employment.

Since 2006, the Department has shifted its focus to the City Strategy initiative, which is aimed at the wider disadvantaged community. The Department has devolved decision making to 15 City Strategy pathfinders. The pathfinders cover 40% of the ethnic minority population, but City Strategies have not appropriately targeted the local ethnic minority community. As a result, there is a real risk that the needs of ethnic minorities will not be addressed, and the Department's initiative will have limited impact on their employment opportunities.

Jobcentre Plus personal advisers play a crucial role, both in getting ethnic minorities into employment and moving them closer to the labour market. The advisers are, however, under considerable pressures, which limit the time they are able to spend with customers and their ability to access training and good practice. The constraints impact on their morale and effectiveness and have serious consequences for ethnic minorities, many of whom have multiple barriers to employment. Whilst the Department provides basic training and publishes good practice internally, this is of limited use if personal advisers do not have time to access it. In addition, outreach activities undertaken by personal advisers to bring the economically inactive ethnic minorities closer to employment are, in many cases, being scaled back. This has the potential, not only to isolate those members of the ethnic minority community who most need help, but also to alienate the voluntary sector organisations who have worked closely with Jobcentre Plus to get to this hard to reach group.

New Deal is the Department's mainstream initiative for getting people into work, but the quality of some of its training courses is variable. In particular, some ethnic minority customers finish their English for Speakers of Other Languages course with the same level of language skills with which they started.