European Committee, 03 Dec 2002

Meeting date: Tuesday, December 3, 2002

Official Report 214KB pdf

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Employment and Corporate Social Responsibility Inquiry

I formally welcome members to the 15th meeting in 2002 of the European Committee. I have received no apologies, but I understand that Colin Campbell will be along a little bit later.

Our first item of business is to take evidence on the European employment strategy. We will do that at today's meeting and at our next meeting and we will deal with corporate social responsibility at meetings in January.

I welcome Professor Ron McQuaid to the meeting. We also have Councillor Willie Dunn, who will speak on behalf of the Convention of Scottish Local Authorities. I ask Professor McQuaid to make some introductory remarks, after which we will open the meeting to questions.

Thank you. I will speak for about five minutes, if that is all right.

I am from the employment research institute of Napier University. The institute uses the European employment strategy framework to provide a framework for research, although we also do research on transport and economic development. We support the concept of using the employment strategy framework.

The current local and Scottish contribution to the implementation of the United Kingdom's action plan for employment is large. At the local and regional level, national programmes are often implemented in partnership with local bodies and take cognisance of local conditions and circumstances. They also work with key actors. That is particularly true where there is a need for an integrated and holistic approach, such as when targeting more difficult employment groups and some business support schemes. Although the local and Scottish contribution is crucial to the operational success of the national action plan on employment, I will make some comments about the dangers.

The European employment strategy has not driven UK policy; rather, it seems to me that UK policy has more often repackaged within the framework of the European employment strategy what it was already doing. The European employment strategy has, however, been very useful in identifying gaps as well as good practice, but in a number of cases it has not driven the development of policy. There are dangers surrounding driving policy; for example, one of the problems with top-down policy development is that it can lead to inflexibility and inappropriate local application. There are a number of UK-wide policies, such as the new deal, that fit perfectly into the European employment strategy.

On a positive note, there is quite a lot of flexibility coming in through a number of UK Government programmes; that should be applauded. It is important that, in the future, we should try to continue with and keep such flexibility. For example, we have employment zones that target depressed local labour markets, such as Glasgow. Those have allowed the pooling of funds within personal job accounts for job seekers and those funds can be used to address training or transport problems. It is no longer the case that the unemployed will just be trained; it is now more about finding out what is preventing them from getting a job, such as whether they have problems getting to work—for example, an unemployed person in a remote rural area might need a driving licence. We can now start to deal with the issues that really face people. Those issues are being addressed by policies rather than being segmented and put into narrow pigeonholes, which is to be welcomed.

The same type of flexible funding approach informs the work of the employment action teams that work in areas of high unemployment. That reflects a commitment to ensuring that job seekers' problems are addressed holistically and that service providers are not constrained by funding regulations. Although the committee will consider corporate social responsibility later, there is a good example of it in Alloa, which we are evaluating at the moment. Tesco has opened a store that will provide 200 jobs. More than 100 of those jobs have gone to residents of social inclusion partnership areas and many of them are older male workers from traditional manufacturing industries who would normally not go into retail.

That has been achieved partly because of the pragmatic and effective joint working among the national agencies, which have been flexible in the way in which they have administered the funding regulations to meet the real needs of the people. Initial findings show that that has been a highly successful example of how corporate social responsibility has had some influence, although commercial considerations will also be paramount for Tesco.

Other new policy initiatives seek to extend the themes of holistic and flexible approaches. The step-up programme will provide compulsory training towards a job guarantee for those who have not successfully found work through the new deal. The Chancellor of the Exchequer's recent speech outlined plans for further area-based approaches, under which areas of high unemployment will be tackled on a street-by-street basis by key public agencies. It is important that flexibility is maintained on the ground. If we simply have a top-down approach without such flexibility, we will all lose out.

Partnerships are another issue on which the UK Government has commented in its response to the latest European Union action plan. That issue is quite important for Scotland because we already have local economic forums and community planning and many local enterprise companies are said to work closely with partnership organisations. The UK response, which is that we need not necessarily create new partnerships, is probably the right one. We should where possible build upon existing partnerships and we must beware of partnership overload. Another danger of using the European employment strategy too rigidly is that we could end up creating superfluous partnerships that do not necessarily add value.

Of course, by no means is everything perfect on the ground in Scotland. Our current conditions of low unemployment are perhaps beneficial for partnership working, in that there is an incentive for everyone—private sector and public sector—to work together. However, that might prove to be transitory if a recession were to occur.

I want to mention briefly one project that was carried out last year—I am sure that the committee will hear much more about it—by COSLA, Geoff Peart Consulting and the employment research institute on behalf of the European Commission. The project, which examined local economic action plans in six local authorities in Scotland, basically tried to apply the European employment strategy to the local level to see how it would work. The six authorities were Dundee City Council, City of Edinburgh Council, North Lanarkshire Council, Renfrewshire Council, Stirling Council and West Lothian Council. In each of those areas, a local economic action plan was created.

That experience was beneficial for everybody and raised some important points. I will mention four key points before I go on to the last bit of my introduction. First, the local economic action plan raised awareness of the existence, range and particular focus of the European employment strategy. I must be honest and say that, when one first asks people—whether one asks those who work in economic development or people on the street, so to speak—about the European employment strategy or even the national action plan, one gets an awful lot of blank looks. The local economic action plan was useful in raising awareness of those policy areas, all of which had, as I said, been very weak prior to the project.

Secondly, the LEAP facilitated a gap analysis. In other words, although people knew what they were doing, when they compared that to the framework they realised that there were gaps, some of which concerned competence, that were not being dealt with. For instance, the Scottish Parliament has some control over tax regulation, but it is predominantly a Westminster issue and is not relevant to local authorities. However, many of the other gaps concerned matters that had not been emphasised much; in particular, equal opportunities and social partner activities were underplayed. Most of the policies dealt with employability and, to some degree, enterprise.

Thirdly, the cataloguing of local initiatives under each guideline proved to be a useful database for the exchange of experience between the local authorities and others. It also acted as a stimulus to develop new initiatives to fill the gap.

Fourthly, the process highlighted the extent of the overlapping range of employment-related programmes and initiatives, hence the need for more effective policy and programme co-ordination at local level. The process identified not only gaps, but overlaps.

Four recommendations from that study are particularly appropriate for the Scottish Parliament. The first is that the Parliament or the Executive should come to a view on how Scottish national and local employment action planning should be developed within the framework for economic development. We have many strategies, such as "A Smart Successful Scotland". There exists the potential to develop a national Scottish employment action programme within the existing arrangements under the framework for economic development.

Secondly, there appears to be scope to develop a national stakeholder forum in which all the relevant European employment strategy policy interests could be brought together. The danger is that such a forum would be merely a talking shop. We want a forum that would help to set the framework and which would add value to Scottish policy. The social inclusion organisational model is perhaps useful in that context.

Thirdly, it might be useful if the Executive or the Parliament came to a view on how local economic action plans fit into local employment planning and the delivery landscape, and on whether the proposed collaborative local economic forums, the community planning model or some variant of that model is a possible way forward. Should LEFs take on board local economic action plans and the European employment strategy, or should some other mechanism be used? Given that my earlier comments were about not wanting to create more and more partnerships, it might be more beneficial for existing bodies and partnerships to take on board the local economic action plan framework.

Finally, one of the findings in our study was that, despite many years of large-scale local labour market studies by local enterprise companies and many others, the information that is available is often of relatively poor quality. I hope that the Future Skills Scotland unit of Scottish Enterprise and Highlands and Islands Enterprise will play a major role in overcoming that basic lack of information, although that recommendation has already been superseded by the unit's workings.

I thank you very much. We have a number of questions that will follow up some of the points that you have made.

Will you give us some detail about how the United Kingdom action plan is developed, in particular, about the extent to which the Executive and other Government bodies have direct input to that development? Who takes the lead in Scotland: is it the Scottish Executive or the Secretary of State for Scotland?

That is a good question, but the answer is beyond my detailed expertise. The Scottish Executive would be much more effective in answering that question. I believe that the Executive has input to the economic action plan, but it is not clear that other bodies, such as Scottish Enterprise, have direct input to the plan. The input seems to come more from the Scottish Executive, which will be in a much clearer position to say how much influence it has and who provides the real input.

Does the UK Government have an obligation to involve the Scottish Executive and other agencies, or are they involved only informally and occasionally?

The current UK employment action plan states clearly that the devolved bodies have a role. Parts of the plan identify specifically the policies of the current Scottish Executive. The Scottish Executive has a clear role. I suspect that that role is not legally binding, but I am not sure about that.

To what extent are other Scottish stakeholders involved in the UK national plan's development? I refer to bodies such as the Scottish Enterprise network, local authorities, the Scottish Trades Union Congress and the Confederation of British Industry Scotland.

Dennis Canavan refers to the whole range of social partners. From my perspective, participation is extremely limited and direct and transparent input has been limited. Perhaps the UK Government's people would say that there has been some informal lobbying and so on, of which I am not aware.

You kicked off by discussing the extent to which the European employment strategy had been implemented by the UK Government and the extent to which the UK Government has its own employment policies, which dovetailed conveniently with the European policy. To what extent is the European employment strategy relevant in Scotland? How should we use it actively in developing our policy initiatives in relation to employment and economic development policy?

Scotland is fortunate to have a whole range of policies, including the framework for economic development. All those policies could fit closely with certain parts of the national action plan and the European employment strategy. There are still gaps, however, and the framework might be quite useful in identifying them. They might be gaps of emphasis, rather than there being missing policy. The framework would force us to address the issues that are of key concern at European level.

There are some areas of confusion, however. For example, gender seems to come under employability, rather than equal opportunities. Perhaps that does not fit so well with the way in which policy has been developed in Scotland, where strong social inclusion policies have been developed. Gender could also be viewed in an equal opportunities context and not purely in an employability context.

It would be useful for Scotland to consider the European employment strategy framework and then to return a contribution to the European level, stating where in the strategy there might be incorrect emphasis. We must remember that the European employment strategy covers the whole European Union, which includes areas of massive unemployment and areas of buoyant economy, such as Edinburgh. That European strategy must be put through a local or Scottish filter, because some of its features that are fundamental at European level—including the low participation and employment rates—are not quite so important in Scotland.

You said that you thought it more important to pick up gender issues as equal opportunities issues, rather than as employability issues. Is that because you see employability as being too narrow an issue for the employment strategy to pick up?

I was thinking more about how equal opportunities have traditionally been viewed in Scotland and the UK. The issue of employability is fundamental, and there are at least two ways of considering it. The traditional way that applies in North America is that employability concerns someone's ability to do a job. It might be a matter of literacy, numeracy and communication skills or it might be about the person's ability to work well with customers. People sometimes think of employability as comprising such a limited set of skills. Job advertisements in the newspapers will often ask for someone who can read and write and who can work well with customers. In manufacturing, employers might also be seeking numeracy skills.

There is also a more European view of employability, which is about how people can find employment or an improved job. That takes into account a whole range of issues. Under that wider perspective of employability child care, for example, becomes very important. Child care is not a characteristic of the person, but the person cannot get into employment without it.

There is a debate about whether we should take the narrow employability skills approach or the employability assets approach, as it is sometimes termed. We could say that, if we get people to read and write and give them interpersonal skills, we are sorted. Under the wider, European perspective, however, we would ask, "What is preventing this person from getting a job?" That question covers their being able to travel to work, availability of child care and availability of local opportunities. Sarah Boyack has hit on the important issue of what we mean by "employability".

How useful do you think that employment guidelines are at a Scottish level? Do they need to be tweaked or revised at all?

A number of the employability guidelines are of limited appropriateness to Scotland, particularly the one about tax reforms for employment and training, which relates to matters that are reserved to Westminster. Certain guidelines are appropriate to Scotland, such as those relating to modernising work organisations and so on, but not a lot has been done in that regard at the Scottish level, although it could have been. We know that 80 per cent of the people who will be in work in 2010 are already in the work force, which means that if training is dealt with only through higher and further education, the vast majority of people who will be working in 10 years or so will not be touched.

Scottish Enterprise took a strong view early on that it would not deal with training within companies as that was mainly the role of employers. However, my interpretation of the guidelines is that modernising work organisations is a key issue. It would help us to examine the issue more carefully if we considered the framework when asking what we should be doing. Perhaps the answer is that we should not be doing anything, although the fact that we are not doing certain things does not mean that we should not be. The framework would help us to justify our current decisions or lack of action.

Are other European countries picking up on that?

Yes.

Will we lose out if we do not pursue that fully as well?

We have to acknowledge that it is important and decide how it should be dealt with and who should deal with it. There is a huge opportunity to learn from good practice elsewhere in Europe. We should find out about flexible organisations across Europe.

You spoke about the pilot studies and the six action areas. In the gap analysis, was there any evidence that we are redressing the imbalance between the skills of the work force and the demand for skills due to new technology? Many workers—I think that the Scottish Enterprise figure used to be 80 per cent—were trained more than 10 years ago and, in the past 10 years, demand for skills has increased way beyond the training of the work force.

No. That is the kind of problem that the framework highlights. Little was being done under the adaptability pillar, particularly with regard to modernisation of the work organisation and work force.

About 15 years ago, the Massachusetts Institute of Technology ran evening courses for engineers because people felt that, after something like six years, a trained engineer might know an awful lot about their speciality, but they would know little about the general field of engineering, because it was moving so fast and new materials and technologies were always becoming available. I agree that, in most cases, someone who was trained 10 years ago might be an expert at their job, but they will not be an expert in their field.

Are we doing enough about the employability of the over-55s? Making people who are over the age of 55 more employable is one of the European targets.

That is a good point. We have done work in that regard for the City of Edinburgh Council and West Lothian Council and in Wick and Sutherland. One of the key issues of the employability framework relates to the over-50s, particularly males. It was interesting that, even in Edinburgh, where many jobs are available at all skill levels, there was still a strong desire to have a job in a traditional sector, even though there were no longer jobs in those sectors. There were strong views against working in the service sector, call centres or the tourism industry.

The example of Tesco, which I cited earlier, is a useful one. When someone signed up for the course, they were guaranteed a job interview. If they completed the course, they got a job. That provided a huge incentive for over-50 males and others to see the course through and enter a new sector.

Often, the over-50 males were looking for a job at a higher level than their previous one, even though they were long-term unemployed. Normally, employers look askance at people who are long-term unemployed. People were doing that partly because of the fear factor. They were afraid of getting into a job from which they had previously been made redundant and did not want to get into the same situation. They were afraid of losing their benefits—housing allowances and so on—and asked, "What happens if I start a job and I get kicked out again? Do I have to go back and reapply for all those benefits?" The over-50s work force is a key issue.

The demographics of Scotland are such that, although the labour force will perhaps grow slightly over the next decade, we will shortly be going off a cliff in terms of the availability of people in the work force. We are going to have to retain the over-50 males and females in work. We will have to deal with the situation in 10 years' time, so we should start to deal with it immediately. That might involve allowing partial retirement, whereby a school teacher could work for two days a week but still safeguard their pension, and so on. However, it has to go much wider than that. We should be starting to do that sort of thing now, as we know that there will be a problem with demographic change.

Thank you. That is helpful.

Professor McQuaid has talked about older workers and their desire to have a job at a higher level than their previous one even though they are long-term unemployed. Does that desire exist because the jobs that they are being offered tend to be paid at close to the minimum wage? If people go back to jobs at a lower hourly rate than they were paid in their previous job, from which they were made redundant, is not the issue less about the loss of benefits than it is about the loss of self-respect?

It is a combination. There is definitely a problem when someone goes back to work on a low wage. The self-esteem issue is important. There are other issues when people have to go into an unfamiliar workplace. Someone who has worked in a traditionally male industry may have to enter a female-dominated work force, which can lead to pressure from former colleagues, family members and so on. There is also the fear of losing benefits and not knowing whether they will get the benefits back if the job does not work out. There are many issues, which is why an holistic approach must be taken. If the national programmes are applied too rigidly, especially among the most difficult to support groups—the most disadvantaged groups—they will probably not be very effective. However, with local flexibility to deal with the real issues that people face, the programmes will have a much better chance of being successful.

Just as we have a split minimum wage for younger people, would it be of benefit to have a higher-rate minimum wage for people in their 50s who are returning to work after long-term unemployment, instead of the benefits net that exists? Would that begin to address the problem, as self-esteem would come from the wage packet, not from the begged-for benefits?

Yes. Benefits such as the working families tax credit can be influential as long as people know about them. We must be consumer-friendly in telling people exactly what they are going to get. However, that puts the onus of the payment on the state rather than the employer.

There is a danger that, if there was a higher minimum wage for older people, employers might choose to employ younger people, although, with the decline in the number of young workers, that might become less of a problem. I would not like to respond to that idea off the cuff, but it is an interesting point.

That leads me to my principal question. Given what we have just discussed, do you see any value in having a specific Scottish employment action plan that could vary the minimum wage? Could you see that sitting alongside the UK national action plan?

In the United States, there is a federal minimum wage and each state can set its own minimum wage. Similarly, Scotland has the power to set a different level of income tax from that in the rest of the UK. I suppose that the principle exists, but the pros and cons would have to be considered carefully. For example, would equity be worked out across the UK or within Scotland? Such matters would need to be considered. I do not think that a Scottish employment action plan per se is required. The issues could be dealt with without the superstructure of an action plan.

Would it be worth having a Scottish employment action plan or is it better to stay with the local employment action plans, which is the model at present?

There is a UK action plan and there have been a few local pilots. It would be useful to discover how current Scottish policies fit with the national and European action plans. I am not sure whether the overall process should be called a Scottish employment action plan or whether we should just keep doing what we are doing and see how that fits. It would be useful to see how the existing policies fit and to identify gaps and good practice elsewhere. That would be more beneficial than having another document that lays out a Scottish employment action plan.

In large parts of Italy and most of Spain and Portugal, employment action plans are aimed specifically at the premier breadwinner in families and little or nothing is done about youth unemployment because the cultural emphasis in those countries is on the family. Is that good practice?

No. Good practice must be effective, efficient and appropriate. It is useful only if it is appropriate to our cultural and socioeconomic situation. It is interesting that the European employment strategy tries to force the countries that you mention down certain routes by making them guarantee job opportunities. Europe has been trying to change practice in those countries.

Is the situation affected by the fact that the three countries that I mentioned operate a system of civil and military service, which is how they deal with their youth unemployment?

That might be the case, but it would not be good practice for us to return to having national service.

I am not suggesting that.

That brings us on neatly to John Home Robertson.

Our principal interest is in how the employment strategy works in Scotland, but Lloyd Quinan has moved into comparisons with other members of the European Union. It might be helpful to set the matter in context. In 2000, the Lisbon Council adopted a set of quantitative targets for raising employment rates in the EU. How successful has the European employment strategy been in helping countries to reach those targets?

It is probably too early to say whether the targets have been reached. The targets set a long-term direction, but the recession in Europe has probably mitigated the effects considerably. We already supersede some of the targets for employment: for example, the female participation rate in the UK and Scotland is high, so the target is not appropriate to us.

In countries in which there is a large agricultural sector, one would expect the standards to move up irrespective of policy, because as the agriculture sector shrinks, more people will join the formal employment sector. Many people who work in the agriculture sector and who are economically active are not counted in statistics because, as a result of the wiles of farmers, they are employed informally. We must distinguish between what is happening and what appears to be happening. It is too early to say whether the employment strategy works. The effects of the recession are fundamental in determining success.

So you cannot identify early trends or examples of good or bad practice from which we can learn.

There is a huge debate in the UK about employment rates, particularly about people who are on sickness benefit. It is helpful to raise the debate in Scotland and the UK instead of continuing to ignore a huge section of the population that is no longer counted as employed or unemployed.

We are considering particular initiatives that should teach us about aspects of good practice. For example, how does Denmark train its workers to adapt to changing technologies and so forth? Denmark has been particularly successful in that area. Although that example is at the micro level, we could identify many other cases of good practice, particularly in areas where we have identified gaps.

Nora Radcliffe wanted to explore issues for rural areas.

Yes. I am interested in what you said about people being economically active and yet, because they are not paid formally, not being picked up in the statistics. As a rural housewife, I relate to that. To what extent has the national action plan successfully addressed questions of employment in rural areas? I am thinking of factors that might prevent rural depopulation. The difficulty with employment statistics in rural areas is that unemployment leaves the area.

That is an interesting point. In respect of the employment strategy, the general trend is to address labour supply, equal opportunities for people in work and the employability of people in work and those who are trying to enter work. On the demand side—which is where jobs will come from—the main issue at the moment is entrepreneurship. Some people have argued that that is too limited, as it is about the promotion of self-employment. People argue that employment is about a range of factors including inward investment—although it is out of flavour because there is so little of it about—and other factors such as the relocation of Scottish Executive civil servants, which was a big issue at the beginning of the Parliament.

One of the big issues now is the demand for labour, but that needs more emphasis, particularly in rural areas where self-employment is important. That was partly picked up under the heading of entrepreneurship, by making it easier to start up a business and so forth in rural areas. That is to be welcomed, but a greater emphasis should be placed on how to create more employment in local areas. That aspect of the employability framework could be developed.

So the strategy has not succeeded at spreading employment levels. The UK met its targets but not evenly throughout the country.

Yes. That is also a good point. If that was to be done at the Scottish level, there is no reason for not taking geographical distribution on board. Although the framework is drawn up at national level, regional distribution in Scotland or the UK could be studied in relation to individual guidelines to ask whether major differences exist.

We need to get below the headline statistics.

Absolutely. We need to get beneath the surface of the equal opportunities component and so forth. It would be beneficial for the Scottish Parliament to examine the issues across Scotland.

It would be useful to collect that data. I return to the point that you made in your opening statement about the lack of good data and information.

Yes. Future Skills Scotland is addressing the issue, but much more needs to be done.

It needs to gender disaggregate the data—et cetera, et cetera.

Absolutely—et cetera, et cetera.

Thank you.

That concludes our questions this afternoon. I realise that we have run over our estimated time a little, but we appreciate the detailed answers that you have given us. I was particularly interested in your comments about taking an holistic approach and about the six local action areas. It would be helpful to have a paper to sum up those conclusions and to give us further detail on those areas.

I would be pleased to provide that. If COSLA is in agreement, I see no problem in doing that.

Thank you, Professor McQuaid.

That brings us to our next set of witnesses. I welcome Councillor Dunn from the Convention of Scottish Local Authorities.

We are pleased to have you with us today to speak about the local dimension and local partnerships. I invite you to make your opening remarks.

Thank you for inviting me to the committee. David Greaves, who is a policy manager with West Lothian Council, is with me today and he will deal with any of the more technical answers that are required.

We are delighted to give evidence to the committee and have submitted written evidence. Although I represent COSLA, as its economic development spokesperson, the past 18 months to two years have been a quite interesting time in West Lothian, so excuse me if any of the answers to the committee's questions have a certain West Lothian slant. I am more than willing to answer questions relating to the submission. If I cannot, I hope that David Greaves will be able to.

Thank you. I have just received the written submission, but we will proceed to questions.

How effective has Scotland's local employment strategy been? Does the European employment strategy provide a useful framework for the development of local employment policy? How could it become more relevant in the day-to-day work of local practitioners in places such as West Lothian?

I will answer on behalf of Councillor Dunn. We have had several years of involvement in addressing the four pillars of the European employment strategy. We see them as a useful framework for the work in which we are engaged daily: addressing employability, assisting companies to address the adaptability agenda, promoting enterprise, supporting business start-ups and developing the equal opportunities agenda through a raft of local initiatives.

At a local level, our strategies and implementation address the European employment strategy and the national employment action plan, but it is fair to say that the documents do not feature highly in our day-to-day work. Local authorities do not refer back to them in their work daily and with partners. We are concerned with making operational locally UK and Scottish actions that are aligned with the European employment strategy.

I obviously agree with that. The European employment strategy is not a bible. We must develop and deliver some of our local strategies to fit whatever is there at the time. The strategy provides useful guidelines for local authorities in delivering economic development in areas, but, as David Greaves said, we do not refer to it every day of the week.

What about in situations where there are large redundancies? West Lothian, like some other local authority areas in Scotland, has recently experienced a large number of redundancies. Is the EES at all relevant to such situations or is picking up the pieces and finding alternative employment for the redundant workers mainly left to the initiative of the Scottish Enterprise network and the local authority?

In the case of Motorola and NEC, the local authority developed much of the work in partnership with Scottish Enterprise Edinburgh and Lothian. The action team that came into the area utilised some local knowledge quite well in accessing training and further employment for people in Motorola.

I am not sure that I can add anything to that. Almost by definition, redundancies come out of the blue—that was certainly the case for the redundancies in West Lothian. We do not plan for redundancies, other than having partnership arrangements in place to address them when they occur. As a result, it is difficult to have a local strategy that plans for a set number of redundancies. Clearly, we have to be quick on our feet, and Scottish Enterprise, Jobcentre Plus and the local authorities are seeking to establish an approach that fits with the European employment strategy's employability pillar and—in spirit at least—with the adaptability pillar, by preparing people for the job opportunities that are around and encouraging them to access training opportunities that will enable them to bridge the gap between the current employment position and jobs for the future.

On the surface, the redundancy situations at Motorola and NEC might look quite similar, but the employees had completely different skill levels. Furthermore, the previous job losses at Levi's and—to a lesser extent—Continental had a big impact in West Lothian, even though both companies were based in Edinburgh. As I say, employees had different skill levels, job opportunities and training requirements. If anything good came out of the situation, it was the number of people who set up their own businesses through the help that was provided. For example, former employees of Motorola started up 35 small businesses. They were given access to funding and received proper financial advice and help with their redundancy money. As far as I am aware, all 35 of those small business are still going 12 or 18 months after Motorola closed. No doubt I will be proved wrong about that tomorrow.

Was any European funding made available for those ventures or for any of the initiatives to find alternative employment for the redundant workers?

Not that I am aware of. Certainly the bigger initiatives were funded by the enterprise company and the local authority. The money from the clawback from Motorola is now being pumped back into the local economy, and the Scottish Executive made available about £1 million from that clawback to help to fund some programmes. I do not know whether individuals were able to access European programmes that provided them with funding.

That has been the nature of things. Although there has been no European-funded project that was specifically geared towards redundancy response work, different elements of the redundancy response package—including some of the retraining and enterprise development programmes that Councillor Dunn referred to—mainly benefit from European social fund money.

I notice that, at the end of your submission, you say:

"ERDF and ESF has been … important in the delivery of … employment and skills strategies".

However, you then go on to say that the system is

"overly complex, bureaucratic and requires a radical overhaul."

We will perhaps explore that comment another day, but we will take careful note of it.

How important is the local dimension in the development of the UK action plan or any future Scottish action plan?

I suppose that the challenge is to marry a top-down and a bottom-up approach. We develop local partnerships to make national programmes more effective; indeed, I know of some really good examples not just in West Lothian but across Scotland of councils, local enterprise companies, Scottish Enterprise, colleges and so on working together with Jobcentre Plus to refine and add to all aspects of the new deal to make it more effective. As a result, we can learn from a range of good practice models, which can feed up to inform Scottish national, UK national and European policy and strategy development. The challenge is to find ways of doing that alongside the range of other local tasks that we have to take forward.

You have almost answered my follow-up question. Is there a way of feeding up all that good experience, or is there a void which means that you are not quite sure where to target that good practice?

There are a number of vehicles. Before this meeting, I attended a meeting of a partnership that is entrusted with delivering the Equal programme. A series of development partnerships in Scotland are made up of organisations, councils, voluntary sector bodies and so on. The purpose of those partnerships is to implement and oversee the implementation of work at a local level and to transmit the lessons from that work to the national agenda. That will allow us to influence national programmes and—in the jargon of European affairs—mainstream innovative and, I hope, successful pilot projects. Today, we recognised the difficulty of doing that and of being able to engage with the right people, at both political and officer level, in UK and Scottish Government departments.

It is always important to learn from good practice, whether from the top down or from the bottom up. The more we shout about good practice, the better. West Lothian Connected is based in the Almondvale shopping centre. We encourage everyone to shop there to regenerate the economy of West Lothian—ad break over. West Lothian Connected has brought together a number of partners—the Benefits Agency, the Employment Service, West Lothian Council, health trusts and so on. We have done well to shout about that co-ordination and some of the things that we have done have been picked up by Jobcentre Plus, which, to our dismay, is a rebranded West Lothian Connected.

It is important to talk up good practice and to have flexibility in the system. We should not have a set of prescriptive rules that must be followed in a particular way. We must be able to keep our minds open, to learn from everyone else and to steal.

Lloyd Quinan wants to pursue the issue of Equal.

Thank you for your evidence. I am particularly interested in the issues that have just been discussed. You are taking one of the most forward-thinking approaches that I have come across in the past three years.

You dealt at length with structural funds. How have you used structural funds to develop employment priorities?

David Greaves will answer that question first—I am always better when I answer second.

I know that, Willie.

We are trying to be both entrepreneurial and partnership based in our approach. The council took the lead in pulling West Lothian's European funding strategy together by bringing together the main public agencies. We identified need and the areas where we thought structural funds and the ESF, in particular, could make the most difference. We aligned funding to organisations' objectives—particularly the work that we are doing to put the economy back on track.

Instead of struggling to explain something that we do not fully understand, could you supply us with a copy of that strategy?

I notice that in the Equal programme, you operate on three levels—with an autonomous community, with a state and with the Länder. Does that pose any specific difficulties for you or, as your written evidence appears to indicate, is it an expansive experience?

It is very early days for the project to which you refer. One transnational meeting, which I was lucky enough to attend, has taken place in the Basque country. That was a good experience and the approach that was taken provided us with plenty of learning opportunities.

The Basque country is an area that I know well. About 32 per cent of employment in the Basque country is derived directly from the Mondragón/Arrasate Corporación Cooperativa.

Councillor Dunn spoke about the creation of businesses by the workers who were made redundant by Motorola. We should note that Mondragón/Arrasate is only 40 years old but that it provides on a co-operative basis 32 per cent of total employment in the Basque country. In the unfortunate circumstance of further redundancies, would you consider that to be a potential model? Would you encourage co-operatives rather than single, entrepreneurial businesses?

Either model would be good; I just wish that more Scottish people were more entrepreneurial. Whether we have a model for individual businesses or for co-operatives, we have to start educating our children to be employers rather than employees. On Friday night, West Lothian Council threw down the gauntlet to businesses to get into schools and encourage our young people to set up their own businesses. The culture—particularly in a former mining area such as West Lothian—is about going to school, getting qualifications and getting a job. I want to change that culture to one in which our young people go to school, get qualifications, go into further education and run their own businesses.

However, if young people do not go into further education, that does not mean they cannot run their own businesses. There appears to be a class divide and snobbery about being a businessman. It seems as if only the middle classes can be businessmen, but a lot of good working-class people, given the right access to opportunities, could successfully run their own businesses. The problem is cultural. It is irrelevant whether we work collectively through co-operative movements or individually. The outcome should be the same: more business start-ups in Scotland, particularly from young people.

I agree whole-heartedly with you, but do you see any real difference between entrepreneurship on an individual basis and entrepreneurship on a co-operative basis?

Yes—on an individual basis, there is no one to argue with.

Touché.

It is like being in a political group: people may all have the same goal, but they want to get there by different routes.

They also have something to fall back on, though.

That is true.

A small business might involve two or three people who, technically, are individual entrepreneurs, but the business is essentially a workers' co-operative. Either model is successful, but the outcome is important. Businesses must have the proper level of support and funding when that is needed, not only to start up, but to grow. We have a problem in growing our small businesses into medium businesses.

I can recommend a website to you. I will give you the address later.

You can do that through www.hibs.net.

We are incredibly impressed by the number of small and medium businesses in West Lothian; I can see that we are going to have to learn about that in Ayrshire.

My question is about how you track the process. From your perspective, what demands does the European employment strategy make on gathering local labour market information? How have you changed the process of gathering that information since you were involved in the local employment action plans in Scotland—or LEAPS—project?

We used the LEAPS project as an opportunity to ramp up our activity in labour market intelligence and to start digging beneath the statistics that are available for West Lothian from Government sources such as the Office for National Statistics. We undertook more qualitative work on aspirations for and barriers to employment on the supply side. We also improved our understanding of the demand side. We wanted to find out more about the attributes that employers look for in job seekers and recruits. Your previous witness, Ron McQuaid, was involved in that big piece of work, which was about developing our information gathering and setting up a system to keep track of those key issues. For example, we carry out a quarterly survey of companies to pick up on key issues such as the state of the economy and the labour market and companies' recruitment intentions. We also undertake an annual employment survey, in which we try to contact most of the big companies, a fair proportion of the smaller firms and the public and not-for-profit sectors to pick up on the recruitment, employment and retention issues that they face.

We are keen to work with our colleagues and learn from the work that is being carried out by Future Skills Scotland. We are about to sign up to a joint initiative with the local enterprise company, the local authorities and other partners, including Jobcentre Plus, in the Lothians. That regional labour market intelligence initiative will pull material together and disseminate it. Although it is great to pull information together and survey companies, we also need to ensure that the information does not sit on the shelf but gets out to the right people and is used effectively to inform policy and service delivery. That is one of the challenges that faces the initiative service, which will be launched in the new year.

We passed the initiative at committee today, so we will be taking part in it. As a politician—perhaps I should say "as a local councillor", as we are not included in the "Politician of the Year" award—I believe that the quarterly and annual reviews are useful to us. Like most politicians, councillors think that they are right all the time. We have to ask businesses what their needs are, which throws up some interesting statistics. When everyone was saying, "The end is nigh for West Lothian," businesses in West Lothian were actually very upbeat. Businesses outside the electronics sector were talking about expanding and taking people on. Just before Motorola went down, issues were thrown up by NEC and Motorola about the lack of staff in the West Lothian economy, but four or five months later both those companies had gone.

Looking at surveys throws up information for us to digest and helps us to form policy throughout the council, particularly with regard to how the education system makes our young people ready for work. We will soon be throwing down the gauntlet to Christmas leavers. We have a lot of Christmas leavers in West Lothian and attainment figures suffer because of that. They leave school because there are jobs for them to take. We want to get them to focus on the realities of work experience and jobs. We will try to educate them for life, rather than focus their minds solely on attainment.

The construction industry is suffering because it cannot get young people into the industry. We want to put a programme in place in West Lothian to give young people a taste of different types of construction work, as plumbers, joiners or electricians. After they have had that experience, they may decide to stay on at school because they need more qualifications if they are to become electricians, which would be great. Alternatively, they may decide to leave and go to work in one of those areas, which would also be fine—job done. Sometimes we try to focus the kids on attaining, when we should perhaps be looking at people who do not want to attain, or who do not want to attain at that stage in their life. We should be trying to educate them into the employment arena. The more statistics and information we have up front, the more we can tailor courses to make our young people job-ready.

We must engage with groups of employers. We are working on a number of initiatives with our partners to bring together groups of companies. The construction sector is a good example, not just for planning ahead for young people but also for identifying real, live opportunities over the next three to six months that will enable us to refine our local new deal provision so that we can prepare people—young men in particular, though not exclusively—for the labour market. We have looked at a specific strand of that work for single parents. It is a question of using the information and the figures and of making direct contact with companies that are looking to recruit. We will work with them to refine our employability programmes, such as the new deal, to make them more relevant and to prepare people for the jobs that are, or will become, available.

That was a helpful answer. We will all think about your outputs, in terms of the new businesses and the change of culture that you are trying to deliver in West Lothian.

Your regional labour market intelligence initiative sounds like an interesting model for accessing employment and getting to people. Are you working with other local authorities on the European employment strategy? To what extent are you swapping information on best practice? Could you do more of that? I am thinking not only about the West Lothian experience but about other local authorities in Scotland. Should we encourage more of them to adopt your approach?

Yes, definitely. We work with other local authorities in various guises. For example, I am on the board of Scottish Enterprise Edinburgh and Lothian, as are representatives from the other three local authorities. Some of the work is also going to be undertaken by Scottish Enterprise.

I keep an eye on the programmes that come to Scottish Enterprise for funding from other local authorities in case I might want to steal them. COSLA has an economic development network and we are constantly visiting other authorities, looking at ideas and sharing best practice. A lot of that is done by word of mouth—we might need to become a bit more formal.

Might peer-group review provide more focus or allow you test yourselves against one another?

Definitely. It would help us to benchmark what works and what does not.

In the past few months I have visited other authorities in my COSLA role. I was a councillor for the City of Edinburgh Council and am now a councillor for West Lothian Council; the councils are not a million miles apart, geographically or economically—they feed off each other.

I went up to Angus Council because that is a completely different area and I wanted to find out about the differences—we were going to go up to Shetland but the flights were too expensive. Angus might be using practices that could help local authorities in the central belt and vice versa. The idea is for councils to share information as often as possible. COSLA is seeking to create an economic development bulletin for local authorities where we can highlight good practice and get people together as often as possible. Of course, everyone is busy, so the more we can do that through the media, websites or a central base for sharing information, the better.

We should not just restrict ourselves to Scotland. There is a whole wide world out there where good practice is being used. We can learn from that, or steal and copy it, and tailor it to the Scottish market. That is how the new deal came about. The idea came from Wisconsin in the United States, was changed—for the better, I hasten to add—specifically for the British market and has been a success. We should open our minds to more of those ideas.

Thank you, Councillor Dunn. The committee appreciates your interesting and frank approach.

I would just add that the final paragraph in the submission was edited; it was even stronger.

Thank you. You have mentioned a great deal of good practice that we can usefully incorporate into our final report. We appreciate the oral and written evidence that you have given.

Meeting suspended.

On resuming—