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Flexible New Deal (Miscellaneous Provisions) Order 2009

My Lords, I am pleased to move this Take Note Motion on the Flexible New Deal (Miscellaneous Provisions) Order 2009, laid before Parliament on 29 June and coming into force on 5 October—a significant date to which I shall return in a moment. I am grateful to my noble friend Lady Thomas of Winchester for steering me in the direction of Take Note debates. This is not an attack or an attempt to annul the order; I am absolutely content with its provisions. However, there are some issues that it would be to the benefit of the House to have raised before the order passes into effect and leaves the parliamentary process entirely. I hope that the Minister will take the opportunity to talk a little about the significance of 5 October. As we know, the whole of phase 1 of the Flexible New Deal, a significant programme, came into effect on that date. I am grateful to the business managers for finding time for this important debate and I am grateful to the Minister, whose sunny disposition when faced with these orders is impossible to breach. I do not know what groaning went on in the department when it found out about this, but the Minister had a broad grin when I asked him to do it. I am grateful for that; it is important for the House to know that Ministers are as willing as he is to do these bits of scrutiny. I will deal with two specific aspects of this order in detail. However, as I said at the beginning, the Flexible New Deal is now a big programme, almost of the same scale as the policy framework under which it sits, the Jobseekers Act 1995. That has been overlaid by the Flexible New Deal and it is a matter of agreement across the House that there are different ways of approaching this general direction of travel. I am sure that in future debates and in the other place, when it would be more in order, we will hear more about the substance of our various proposals to develop the programme. Given that it has just been introduced, however, this is a key moment. It would be to the benefit of the House if the Minister could update us this evening on how that operational implementation has passed off compared to the department’s expectations. Paragraph (2) of Article 2 deals with the distinction between training allowances and earned income. There is nothing particularly exceptional about this, because these same provisions were applied to all the precursor New Deals. It was not a surprise. The surprise is more that there was a major consultation, as the Minister knows, in March 2009. The consultation was of such significance and magnitude that it was referred to the Social Security Advisory Committee. The SSAC came up with some recommendations. One was about the speed of the rollout, which brings us to the order before us. More widely, there is concern that the way in which this crucial public policy area is being developed at law is now so piecemeal, complex and detailed that we should be thinking about a sort of consolidating measure. I say to all sides of the House that these provisions find their provenance in the Employment and Training Act 1973, with amending legislation thereafter. Well, the situation with employment schemes in 1973 was quintessentially, qualitatively and quantitatively different from the situation with the Flexible New Deal. Article 2(2) of the order may be all very well in its context; we can accept it because we have seen it before and it is part of the system. However, it is no longer safe for any Government to hang the whole active labour market policy development that we are seeing, and will see, on the Employment and Training Act 1973. If they do, they will get amendment after amendment, order after order. There was a major consultation in March on the order and a "(Miscellaneous) (No. 2)" order dealing with the Flexible New Deal was laid last Monday. There comes a point when Parliament must raise this issue with the department, under any Government. Of course, this would take parliamentary time and would be a matter of consolidation but I and my colleagues would welcome and facilitate any attempt by the department, working under a Government of whatever colour, to look seriously at the statutory foundation for the Flexible New Deal and intermediate and flexible labour markets in the future, so that we do not have to do these orders night after night, dealing with their content and the piecemeal tinkering with the system that they involve. Article 2(3) is different and the Minister might say a word about it. Of course, I understand that it makes perfect sense to separate out what are called the test trading rules for self-employment. Self-employed trainees through the Flexible New Deal potentially could have a trading arm. HMRC is very jealous about the trading bit of that, as opposed to the training allowance and the money that the trainees get as participants in the Flexible New Deal programme. That is new to me. I have not found a provision of this kind before. I do not know whether this is HMRC getting into the act late or what. I may be wrong about that, and would be pleased to be corrected if I am, but test trading is important. I come off the back of that narrow point to a wider point. Self-employment is very important, going forward, in getting flexible employment. People with intermittent conditions and mental illness and other things who find it difficult to go into entry-level jobs at any scale at all in an employment context or in their own dwelling house can be supported perfectly well through self-employment. I therefore want some assurances not only about whether these test trading provisions are new in this order, but also that they will not damage, affect, interfere with or restrict the rollout of self-employment provisions under the Flexible New Deal. If they did, I would have some serious concerns. The evaluation and provisions in the Explanatory Memorandum of this order are also important. It is reassuring to know that the Policy Studies Institute, which is well respected and well known as an evaluator of departmental policy, is to look at all this. I hope that it will. I am cheered by the fact that paragraph 12.3 of the Explanatory Memorandum talks about, ""a report of early findings in December 2009"." They will be very early findings in December 2009. I hope that the Minister will confirm that the department is still aiming to achieve that. Paragraph 12.2 refers to other important provisions that should be looked at, which go all the way through to an evaluation programme ending in 2012-13. That is entirely right and proper and all the bullet points in paragraph 12.2 will need to be studied. I hope that the Minister will focus the PSI work on some of the policy issues that concern many people in the new contracted-out service providers as regards what they are to expect in the future. It does not help them when they read in the Financial Times of 30 September that the onflow of clients will be up to 40 per cent less—that was a fortnight before phase 1 started. That is to say that service providers who were told earlier in the year that there might be 450,000 client onflows over the middle to longer term are suddenly told a fortnight before the programme starts, "Oops, it is 250,000". I should perhaps have declared an interest as a non-remunerated, non-executive director of the Wise Group. I can tell the Minister that that reduction will have a signal effect, although not in the short term, because these programmes are being wound up. However, even well run businesses such as the Wise Group will find that a significant difference to embrace at such notice after the contracts have been signed. The order will be directly affected by some of these matters. One reason why the onflow will be reduced is welcome. There are early signs that the economy is picking up and that unemployment figures will come down. I was cheered to see the recent unemployment figures, as I am sure we all were. However, I am puzzled by the fact that the Government launched the £1 billion Future Jobs Fund after these contracts were negotiated. I am not clear whether that can be folded into the Flexible New Deal scheme. However, the guarantee of a job or training for young people would certainly have a direct effect on the client group onflow on to the Flexible New Deal. Therefore, the Government have by their own hand reduced the number of potential clients, which does not enhance the confidence of people who are in the business of putting this important policy in place. In that regard, what is the order’s scope? I understand that personalised employment programme pilots are being rolled out in Barnet and Hampshire. I assume, and I hope that the Minister will correct me if I am wrong, that people in Flexible New Deal will be either under phase 1—phase 2 when it rolls out next spring—or under pathfinders or pilots. There will be no other jobseeker’s allowance provision anywhere else. If people are not in phase 1 or phase 2 or the pathfinders or pilots, there will be no other jobseeker’s allowance people working in any other part of the system and therefore they will be covered by the order. Has there been operational guidance on how Articles 2 and 3 of the order will be rolled out? The Social Security Advisory Committee was concerned about the speed at which the programme was being developed. I accept that these are second-order issues, but if the guidance is not given timeously and properly to the people who are operating these schemes, and indeed to the private contractors who will offer their services, problems will arise along the way. I hope that the Minister will allay some of my fears. I am on his side in trying to make this policy work as successfully as possible and I guess that that is true of colleagues on all sides of the House. However, I repeat that I think that we are now getting to a stage where it is no longer safe to rest the statutory foundation for a scheme of this size on the legislation that we have. We should be looking for early consolidation; otherwise, I fear that we will come back to these piecemeal, second-order issues night after night on the Floor of the House. I shall not point at anybody because I am not supposed to do that, but I give fair warning that, as long as the Minister is prepared to grin and bear it, I am prepared to table these Take Note Motions, because it is important that people understand the detail behind these orders. On that basis, I beg to move.