Enterprise and Culture Committee, 23 Jan 2007

Meeting date: Tuesday, January 23, 2007

Official Report 298KB pdf

---

Employability Framework

Item 2 is the Executive's employability framework and strategy to reduce the proportion of young people not in education, employment or training. I welcome two ministers—Rhona Brankin, whom we congratulate on her appointment as Minister for Communities, and Allan Wilson, the Deputy Minister for Enterprise and Lifelong Learning, who is a regular at the committee. They are accompanied by Melanie Weldon and Margaret Barbier, whom I welcome.

We have had a round-table discussion on the issue, the Official Report of which the ministers will have read. I invite the ministers to make some introductory remarks, after which the committee will ask them questions.

I thank the committee for inviting me to provide evidence on what we all agree is an absolutely crucial agenda for us in Scotland. I also thank the convener and the committee for their positive feedback on the workforce plus and more choices, more chances strategies.

We agree that implementation is important. Much work is now under way to develop the strategies and take the required actions at local level. As you will know, the Executive is committed to tackling poverty and disadvantage in Scotland and to growing and developing the workforce. "A Partnership for a Better Scotland" makes it clear that those are top priorities for us. Our closing the opportunity gap approach aims to prevent individuals and families from falling into poverty, to provide routes out and, crucially, to help people to sustain a life that is free from poverty. We believe that work is the surest way out of poverty, bringing improvements not just to income but also to health and well-being, to social inclusion and to access to services.

The workforce plus and NEET strategies are key to the success of closing the opportunity gap. They support the four targets that are focused on reducing worklessness and the number of young people who are NEET—targets A, B, C and G. They also make a major contribution to target J, which is the overarching target to promote community regeneration. The Executive is investing £20 million over two years in support of the workforce plus and NEET strategies to help people from Scotland's most deprived communities into work. That is supported by more than £50 million in community regeneration funding over three years and £15 million a year in working for families funding.

Financial exclusion is closely linked to worklessness. The Executive has committed £5.3 million a year towards its financial inclusion strategy, with the money being distributed across 11 local authorities during this year and next.

That is all that I want to say, so I hand over to Allan Wilson.

I will be brief. It is good to have the opportunity to come to the committee again to discuss one of the Executive's top priorities: giving economic employment opportunity to our fellow citizens who may have been denied that opportunity in the past.

I agree fundamentally that we cannot approach the issue only from an economic perspective and that we must take the social dimension into account. If employment is one—if not the only—route out of poverty, increasing the employment rate and getting our economically inactive fellow citizens economically active will mean that we benefit not just economically, but as a society from offering economic and employment opportunity to people who are denied it.

The two policy documents that we will discuss are the product of fairly sustained and broad consultation and development over the two years or thereabouts in which I have been directly involved in this work. People like me welcomed the committee's response to that process as, even if we are not completely at one, we generally agree on the direction of travel and on the best means of going from where we are today to where we jointly want to be.

Recognition has been given to the substantial progress that has been made, not least to offer employment opportunity—200,000 of our fellow Scots have been given new employment opportunity since 1999 and, as members know, our employment rate is second only to that in Denmark in the European Union 25 nations for employment opportunity.

The vast majority of our school leavers progress into positive destinations, whether in higher education, further education or vocational training opportunities. Positive school-leaver destinations have particularly improved in the past two years—the number of negative destinations has decreased by 26 per cent. However, as members know, a hard core remains of individuals who have severe problems and obstacles to entering education, employment or training. The focus of our NEET strategy is on giving those individuals—the 20 per cent who are underachievers in our educational system—the opportunity to enter education, employment or training.

We have set ambitious targets. I believe that, over the piece, we can eradicate NEET from our vocabulary. We have set the ambitious target of bringing 66,000 people off benefits and into work by 2010 and an intermediate target of bringing 30,000 people off benefits and into work by 2007, which we are 80 per cent of the way to achieving. The statistics on our ability to move people from benefit into employment are impressive.

Challenges remain. I notice that the committee discussed leadership in this context. I could not agree more with the committee's conclusion that leadership and partnership are fundamental to success. We must treat people as individuals and ensure that public agencies respond to individual needs. People have varied, multiple and sometimes complex reasons why they cannot re-enter the labour market. We must ensure that our response mechanisms and response systems and the response of all the public agencies involved are tailored to the individual's needs.

We must ensure that agencies work in partnership. Everyone agrees that there is no shortage of public resource for the work—we estimate that the various bodies spend circa £500 million on securing positive outcomes. How that money is spent and where it is spent to create added value and best value are most important for the outcomes for individuals.

Workforce plus and more choices, more chances represent two important steps. We welcome the committee's round-table discussion; I was encouraged by its outcome, as I have been by almost every public agency with which I have discussed the strategies.

I was also encouraged by the response of employers and organisations such as the Smith group, which has seen the positive benefits that can accrue to it and wider society by engaging with the agenda and helping us to provide the economic and employment opportunities that will make a difference to such people.

Thank you both; that was very helpful. Obviously, the objective of getting more people off welfare and into work, and getting our young people into employment, education or training, unites everybody in the Parliament. During the round-table discussion, Professor Alan McGregor highlighted some of the practical problems that people who come off welfare and go into work face. For example, they lose benefits almost right away and if they move from weekly benefit to a monthly salary, it might be three, four or even eight weeks in some cases before they receive the first salary payment, which creates a major cash-flow problem. Moving from weekly to monthly budgeting for the family can raise a number of problems. People are often caught out by the debt they built up—particularly for council tax—while they were claiming benefit.

There are several practical steps, such as the continuation of benefit until the first wage is received—it could be reclaimed at some point—that do not necessarily require additional resource, but a more flexible use of resource. I know that we are touching on reserved issues to an extent, but we need to co-ordinate reserved and devolved powers to tackle the problem. Both are involved at the crucial point. Will you both comment on what is being done by the UK Government and the Scottish Executive to address some of those practical issues?

I suspect that we could speak at great length about the process. I have been actively engaged with three successive Department for Work and Pensions ministers on precisely that agenda during the past two years. I have found them to be responsive and happy to work with us on developing new strategies and approaches to the problems to ensure that the partnership of which I speak involves them. They have been particularly involved with Jobcentre Plus and the benefits service to incentivise the process of moving from benefits to employment, which, as you probably know, is the thrust of the Government's green paper on which we are currently being consulted.

There have been a couple of areas of significant progress, particularly in relation to the cities strategy. Three of our cities—Glasgow, Edinburgh and Dundee—are involved in that partnership. Their representatives sit at the same table to discuss how best the various agencies can work together to simplify the process, part of which is signposting to ensure that there is a one-stop shop as far as possible. Although that is an easy thing to say, it is difficult to deliver on the ground.

An important and big step forward is the proposition of a shared resource to ensure that the resources that are put into the area are best used. We require a shift in how resource is used. There needs to be earlier engagement with the various client groups that form the bulk of the people who are most affected.

There also needs to be better aftercare, so that people are incentivised to move from benefits to employment. They need to see tangible advantages not just in improved self-confidence and well-being, but in remuneration. They need to experience an actual financial benefit when they succeed in making that move. I think that we have made significant steps forward in that regard.

As the convener mentioned, much of the effort involves overcoming what is known as the poverty trap, whereby people lose benefit when they move into employment and find themselves no better off—or even worse off.

According to the latest research, the effective marginal rate of tax can sometimes be as high as 90 per cent when people move from welfare to work. Obviously, that is a major disincentive. Another point, which Alan McGregor made very forcefully, is that many people fear that, once they get into work, they will not be able to go back to the same level of benefit if they lose their job.

I am happy to deal with both those questions, although they refer to reserved issues. The tax, benefits and credits system is designed to remove people who are in that category from the tax system. Circa 2 million of our fellow citizens have found themselves taken out of the tax system entirely as a consequence of that.

We can help by ensuring that benefits that are administered by local authorities are delivered effectively. The obvious case in point is housing benefit, which affects the decisions that people make. Compared with local authorities elsewhere in the United Kingdom, local authorities in Scotland have a very good record on the time it takes to process applications for new entrants. However, we need to incentivise the process better and ensure that the agencies work together more effectively to ensure that the individual gains not just increased well-being and self-confidence, important though that is, but positive remuneration.

The provision of financial advice is absolutely key. Through our work on the financial inclusion action plan, we have supported front-line money advice services with funding amounting to £5 million a year. We recognise that there are issues—as the committee has, I think, heard in the evidence that it has received—with the range of financial services that are available. We recognise that the landscape is quite cluttered, so we will evaluate the plan later this year.

For our working for families fund, which is a pilot initiative, £50 million has been made available over four years. The initiative runs in 20 local authority areas and helps to support disadvantaged parents overcome barriers to work. Obviously, a key element of that is money advice. We recognise the need to provide money advice for people who are facing barriers to work.

We do not provide just advice. Under the Bankruptcy and Diligence etc (Scotland) Bill, which was passed comparatively recently after some lengthy deliberations by the committee, access to debt relief will be made available to no income, no asset debtors. Such relief can be an important consideration for people who want to move off benefit and into employment. By virtue of the amendment to the debt arrangement scheme that the committee discussed, we have also given low-paid debtors access to debt crystallisation and, prospectively, debt relief.

I do not want to dwell too much on today's news about One Plus, but affordable child care is an absolutely essential component of the debate.

In general and in relation to today's announcement, how are we working with local authorities, voluntary organisations and others in the social economy to develop affordable child care so that parents with responsibilities can afford to make the positive choice to get back into the workplace to support their families? Child care is an expensive business.

Absolutely. I do not know whether you want me to talk about the One Plus situation. It is an important subject and I would be happy to answer questions on it, if that would be helpful.

We acknowledge that supporting people who have child care responsibilities to get back into work or to come into work for the first time is essential. That is why the child care strategy is in place. Funding to provide affordable and accessible quality child care for children between the ages of zero and 14 in all neighbourhoods has risen from £29.75 million in 2004-05 to more than £43 million in 2005-06. A key target group is lone parents who wish to undertake further and higher education. We want them to be able to overcome some of the barriers that they face and to give their children a better start in life. As you know, there is a £1,180 lone parent grant and a £1,100 grant to help lone parents meet their child care costs. To date, almost 5,000 grants have been awarded.

You will also be aware that sure start Scotland aims to ensure that every child has the best possible start in life by targeting support at families who have very young children in areas of greatest need. I mentioned the working for families fund, which runs in 20 local authority areas. It will receive £50 million over four years to help disadvantaged parents overcome barriers to work. The fact that a series of actions is being taken demonstrates that we recognise that child care is an essential component of getting people back into employment.

My second question is about early intervention. It emerged from our round-table discussion that a number of the young people who find themselves in the NEET group are identified or could be identified fairly early in their education. What steps are we taking to ensure that early intervention work is done so that those youngsters do not quickly become disillusioned and that support on drug or alcohol abuse is available? In the context of family support, the Glasgow pilot that has been mentioned this week is interesting. How do we provide support to those young people and their families at the earliest opportunity so that they can get the most from their education and find a suitable occupation after it?

I have mentioned sure start Scotland. The key thing is that vulnerable families are brought to its attention, either through the health service or through the education service. We have put in education opportunities for youngsters at nursery school. There needs to be a transition so that vulnerable families who first come to the attention of the health service are captured by the sure start programme and the link is made with nursery and full-time school education.

Although Allan Wilson and I do not have responsibility for school education, I would certainly be happy to get information from Hugh Henry on how those families are worked with during and beyond the key transition into school education. I agree that children with particular needs can be identified early on and that it is crucial that steps are taken to support them and their families.

What links are being made with the lifelong learning sector? What role can it play in helping the young people in the NEET group?

Its role will be fundamental. You mentioned the Glasgow pilot, which will be crucial. As you know, the rate of teenage pregnancies is very high, but those people have tended to drift off the radar screen when they leave school. Tracking them after they leave school will be fundamental to understanding the obstacles that they face in getting into the labour market after the birth of their child. Intervention at educational level is equally important.

People who face the greatest obstacles to returning to the labour market—young mothers fall into that category—are better catered for by our more general lifelong learning strategies. That means better support for part-time returners to learning in our further education colleges. As committee members know, the amount of money that we put into that is paying great dividends for part-time learners—particularly for young mothers and mothers more generally who are returning to further education.

This is not what I was going to ask you, but the obvious questions that arise from what you have said about the Glasgow pilot are how long it will last and whether there will be more pilots if that one works.

Those are fair questions and they relate to the issues of partnership and leadership. I am sure that you will agree that we do not hold all the answers here in Edinburgh—in the civil service or in public agencies more generally. The purpose of setting up local partnerships and giving them a leadership role is precisely to ensure that local initiatives such as the Glasgow pilot can be put in place, with any lessons learned being passed on more generally. Laurie Russell made that very point when he came to the committee. Others did, too.

In any intervention, it will be important to identify who takes the lead role—the local authority, the careers service, the community planning partnership, or whoever—and to ensure that everybody understands who is taking the lead role. It will be equally important to have sufficient flexibility in the system to allow for local solutions. When local solutions are found, other people should be able to share in the benefits, taking ideas for their own programmes.

I had a very positive meeting with all the local authorities involved in producing NEET action plans. They stressed the importance of collaboration. I agree. We have to look at what works, where there is added value and where there is best value, and we have to ensure that we achieve an appropriate return for what is a fairly substantial investment.

It was local authority NEET action plans that I wanted to ask both ministers about. There is a NEET action plan in my constituency—a group of people formed a steering group, brought the proposal to ministers, and will now, as the implementation group, take the plan forward. Those people come from a wide range of local authority and other agency services. If there can be cross-departmental and cross-agency collaboration at local level, the question to the Minister for Communities and the Deputy Minister for Enterprise and Lifelong Learning is this: what are you doing to ensure that your ministerial colleagues keep in touch with you when their responsibilities impinge on this work? You have to be able to cross-fund.

That is a very important point: we cannot demand partnership working of others if we do not replicate it internally. Since I have taken up the reins, I have been at pains—as Melanie Weldon knows—to ensure that education colleagues are as engaged as enterprise and communities colleagues. We take responsibility for determined to succeed, our enterprise and education strategy, but it is important that our education colleagues are engaged with us in the early intervention process that Karen Gillon mentioned, and in ensuring that the right messages about education are getting out to young people. The appropriate mechanisms that should be in place for specific groups of people, such as care leavers, give them opportunity.

The best example I can give is of the school- college partnership, which involves sitting down with education colleagues and other stakeholders to work on skills for work courses, which are now a popular element of education provision. It is a matter of ensuring that such opportunities are rolled out more generally across the country. Indeed, at my most recent meeting I was struck that, contrary to much of what we read in the press about young people being shunted to negative destinations for vocational education and training, the exact opposite is the case. Such is the popularity of skills for work courses among the cohorts of 14 to 16-year-olds at which they are targeted, while many of them will move on to positive school leaver destinations, there is a danger of squeezing out kids who would benefit more from the opportunity. We have to keep an eye on that and ensure that the people who could benefit most get the opportunity.

Closing the opportunity gap is an important vehicle for bringing together the work that different Executive departments and portfolios are doing. As members know, the overall aims of closing the opportunity gap are to prevent individuals and families falling into poverty, to provide them with routes out of poverty and to sustain them in a lifestyle that is free from it. I take on board the concern that has been voiced about having a lot of different people in different organisations engaged in the work in this area. We agree that the funding streams should be simplified. It is important for local partnerships to have a clear picture of the service infrastructure and of who funds what and for what periods.

At a national level, we have—I hope—been setting an example by combining money for the various strategies with the regeneration outcome agreements. We will be considering merging the deprivation funding streams further at the next funding review. The Finance Committee asked us to consider simplifying the funding for areas of multiple deprivation to create a single deprivation fund. We have already made efforts to tackle the matter through the community regeneration fund, which merged three previous funding streams—the social inclusion partnership fund, the better neighbourhood services fund and the tackling drug misuse fund. We will consider that matter further as part of the strategic spending review process. We think that there is a need to do that.

Melanie Weldon can give an example of co-operation between officials in different parts of the Executive.

The question was to do with how ministers are joining up across portfolios, but it is essential that we do that at an official level, too. In particular, we have established a NEET programme board, which is chaired through a Cabinet secretariat. It has representation from all Executive departments at group head level. Its job is not only to oversee delivery of the NEET strategy; it aims to look across and ensure that a wider set of activities can support positive outcomes for that group of people. The NEET strategy takes us so far, but we are not sure that we have covered all the bases.

In addition, I am part of a small NEET team in the Enterprise, Transport and Lifelong Learning Department. We do not have the solutions, however—we do not have control over all the different bits. There is now a wider NEET team, which comprises 35 officials from all departments, including ETLL, the Health Department, the Justice Department, the Development Department and the Finance and Central Services Department. Our job is simply to ensure that we are joining up and that the NEET strategy is embedded in all our policies.

That is good. I have one final question. During last week's debate on skills academies, I highlighted an issue that had been drawn to my attention by my local further education college and my local school. That was that the distinction between academic and technical subjects is fairly tightly drawn in terms of funding at further education level and, I suspect, in further education courses in schools. Are you considering whether those restrictions can be loosened slightly? The example that I gave was information technology, which is designated as an academic rather than a technical subject. Can the system be loosened fairly easily to make life easier for young people who are choosing subjects?

I am happy to look into the detail of that situation. I know that information and communications technology forms part of the skills for work courses that we have introduced, so there should be a cross-cutting provision that could meet some of the need, but I will look further at the situation.

On a point of clarification, is anyone from the Department for Work and Pensions on the NEET management board?

It is internal, so the answer is no.

Would it not be common sense to involve that department, given its central role?

We have another partnership board that has been set up around workforce plus, and the DWP is represented on that.

Could you give us a wee map of all your boards and who is on everything?

I certainly can.

I would be happy to do that—no problem.

At long last, the value and role of social enterprises in providing supported employment are being recognised. Is that recognition and support being transferred down to local enterprise companies and jobcentres so that they can include those opportunities when providing employment?

We agree that social enterprises are central and have a key role in implementing the programme. The committee will be aware that our futurebuilders fund provides £18 million to grow the social enterprise sector. I accept the importance of the sector. It is key to delivery.

I could not agree more. We often consider employment purely from a private sector perspective and forget the role that is played by the social enterprise and public sectors. For example, the national health service is a massive employer and has a critical role to play in offering employment opportunities to people who have been furthest from the labour market. If we make demands of private sector employers, it is fair to suggest to colleague ministers and public sector employers that they do more to offer employment and training opportunities to people who are currently excluded.

My own experience has been the same as Shiona Baird's. The third sector has a critical role to play in, for example, working with people with learning disabilities and giving them the opportunity to enter—it is often "enter" rather than "return to"—the labour market. We will not succeed without its active involvement and its continued support for the programme. For example, Enable is a critical partner in the process, and we are certainly making efforts to ensure that all stakeholders, particularly those in the social enterprise sector who have a role, are engaged and supportive. There has been a positive response to that agenda from those groups, as, it must be said, there has been across the board.

I am particularly concerned about the recognition in the jobcentres.

Very much so. Interestingly, when Jim Murphy, the UK Minister of State for Employment and Welfare Reform, and I went to Drumchapel—I think—to launch the UK paper, we had the opportunity to engage with individual jobcentre clients. It was obvious to me that there was an appreciation among Jobcentre Plus colleagues, and in the DWP more generally, that to reach out to those who are currently furthest from the labour market, it is necessary to use organisations in the social enterprise sector. The Wise Group is particularly good at that in Glasgow.

I think that there is still work to be done with the Scottish Enterprise network—dare I say it—and some of the local enterprise companies that have still to appreciate fully the importance of engagement with the social enterprise sector and those who are furthest from the labour market. I think that they have a positive relationship with their skillseekers, get ready for work and training for work clients.

We are currently working on a social enterprise strategy, and I am happy to let the committee have information about that.

Karen Gillon rather stole my thunder because I was going to ask about early intervention—

Not for the first time.

Indeed. I will restrict myself to one question about the most effective age for intervention. I have heard different views about whether it should be six or 12. Some people would say that it should be older. Does the Executive have any view on that and how resources should be targeted? What is the most effective age at which to identify youngsters who might fall into the category?

I have heard similar things, probably from the same people. I personally support the earliest possible intervention—sure start was mentioned—but I do not believe that it is a question of a single early intervention at whatever age. It is a question of early and repeated intervention.

I mentioned transferring some resources to earlier engagement, which could mean at nursery school, during formal education, or after school through the school-college partnership. It could mean earlier engagement by the employment agencies with those who are disengaged from the labour market.

It is about early and repeated intervention and transferring resources into early engagement. It is also about aftercare. We have to deal with the revolving-door syndrome, which I noticed was a feature of some of the partners' representations to the committee. It is not good enough for people to go on successive 13-week courses, picking up certification that has no value in the modern labour market. We must ensure that our interventions make a difference to that individual and enable them to progress to and hold down either a job or a place in further education or training.

I am happy to ask Hugh Henry at an early stage to provide some information about additional support for learning legislation, which recognises the importance of early intervention and the need for liaison between education provision, health provision, social work involvement with young families, and the need to support youngsters who are seen as being vulnerable and needing additional support.

I am glad that the minister raised the problem of the cycle of 13-week courses. The point was raised in the round-table discussion that to get funding the agencies must meet a target of getting people into work and keeping them there for 13 weeks. Does that not in effect skew the agencies' operation to meeting that target rather than getting people into work in the longer term? I mentioned that during the round-table discussion because I encountered exactly the same problem when I worked in this area almost 20 years ago. Funding was tied to a certain period of time and the whole organisation was directed towards meeting those targets rather than at the longer-term aim of getting people into employment and sustaining it in the longer term. It is slightly disappointing—although perhaps not surprising—that 20 years down the line we still have the same problem. What do you think about that?

As someone who has been engaged in this sphere of activity for more than 20 years, I think that there has been progress in the interim.

You must have been young when you started.

I was a child bride.

The most effective change in the interim has been the move to three-yearly funding cycles in the public sector, especially in local authorities. We have replicated that across the public sector, so that organisations understand, in so far as they can, where they will be financially three years hence. As the member knows, there are always exceptions to that rule, sometimes in the unlikeliest places, but it is a positive move.

Another positive move that is under way is the Glasgow pilot, which proposes to extend the 13-week period to 26 weeks. We are interested in seeing what happens as a consequence. It would be difficult to argue that a 26-week intervention could not give someone a positive steer for their future personal development.

Another change that is under way but which is not yet complete is the move towards aftercare—an issue that the convener raised. It is about incentivising the process to ensure that people have the opportunity to engage and that all the difficulties that arise after people have entered the labour market are addressed by the various agencies concerned. Those difficulties may relate to child care, which has been mentioned, transport or housing. Shifting resources from simple engagement to aftercare is an important change that is under way.

The shift from one to three-year funding is a good move. I remember the annual panic in organisations that annual funding caused.

The fire service was affected by it.

I am not talking only about the fire service. The funding of organisations in which I worked previously was decided in that way—organisations were focused on the problem for half the year.

In response to a question from Murdo Fraser, you suggested that some of the certification was irrelevant to what people were doing—I cannot recall exactly the words that you used. To what extent is the 13-week target responsible for the irrelevance of some of the certification? The focus is on getting people into employment, getting them a certificate and meeting the 13-week target. The 26-week pilot is a good idea, but do you think that there is a connection between the funding mechanism and some of the things that are being done?

Historically that was certainly the case. I remember the youth opportunity programme, the youth training scheme and the other schemes that were basically supply-side measures to reduce the number of people appearing on the official unemployment register. Such schemes did not address the demand side of the equation, which is about creating economic and employment opportunity.

We are now in a different labour market scenario. As members know, there are employment opportunities out there; indeed, some employers argue that there are skills gaps and shortages. The task is to give people who are economically inactive the skills, training and education that are necessary to make them competitors in that new labour market situation. Some of that can be done in 13 weeks, but some of it will take longer. We must ensure that the appropriate interventions are made that suit individuals' needs. That is vital from an economic perspective. As low-cost manufacturing moves to low-cost destinations, our ability to compete will be dependent on the skills and training of the workforce. We must also give people who are currently in employment the opportunity to upgrade and upskill.

Following on from what the minister said about the skills gaps, during the round-table discussion we heard some impressive evidence from Aberdeen Foyer, which is based in Aberdeen but works throughout Scotland. A skills gap has been identified in the oil and gas sector. Aberdeen Foyer has managed to get oil and gas companies to work with it, take people who have had drug addiction problems—people at the hard edge of the NEET issue—and get them into employment in that sector. Could such success be replicated through the strategy? Might other parts of industry that have skills pressures be up for such engagement? Will third-sector organisations and businesses be brought together, either in a national workforce plus team or in local partnerships, or should the partnerships themselves do that?

Both, I think. National engagement—for example, but not exclusively, via the Smith group—is about ensuring that employers are engaged in this agenda. You mentioned the oil and gas industry. It is important for Scotland and for the north-east that that industry is engaged, given that it is a key driver of the Scottish economy. Some people in the sector would admit that they neglected skills training over the piece and are now having to catch up and invest again in ensuring that they have the necessary supply of skills and labour for the new period of economic engagement that they are enjoying.

Employers are vital to the process. I have been encouraged by their response. It is partly a question of corporate social responsibility and partly a question of economic necessity. There is an appreciation and a realisation out there among the major employers that I come face to face with that they could and should be doing more to engage with those who are outside the labour market—not least because their own bottom lines can benefit from that engagement. Those organisations appreciate that unemployment is a social ill and that there is an obligation on them to act in a corporate and socially responsible manner to address it.

So it will be up to the local teams to decide the extent to which they bring on local employers and create partnerships.

Obviously, we will look to the local partners to engage with employers in their areas, but we will support that nationally, building on the employer engagement strategy that was established through determined to succeed, which is our enterprise education strategy. There is no point in our having a parallel strategy for the NEET group. We must ensure that the employer engagement strategy is fit for purpose for young people who typically find it difficult to benefit from such opportunities.

We are in the early stages of developing the strategy to make it more responsive to NEET issues. The Smith group is helping us with that, and we are jointly funding a secondee. We intend to target specific sectors. At the moment, we are looking specifically at the construction industry, but we are keen to work with not only the private sector but the public sector. Your point is well made. There is a lot of potential within the health and social care sectors in particular. I know from the Dundee planning team that it is looking at aligning those agendas in social care.

One of the closing the opportunity gap targets is to ensure that children and young people who need an integrated package of health care and educational support get that support. In a sense, the need to integrate the range of support needs for young people is recognised throughout Government.

There are difficult questions on priority resource allocation for the committee, for ministers and for whoever forms the incoming Executive. These are important issues that require to be addressed in part through the allocation of public sector funding. That involves difficult decisions about where and how we can best spend limited financial resources.

It is interesting that private companies that have traditionally not engaged in such things are now doing so. I hope that there is also scope for such work in the public sector.

There are examples from the public sector. Between 2004 and 2006, NHS Scotland aimed to provide 1,000 job opportunities to inactive or unemployed people, with support for training and progression once people were in post. I would be happy to give the committee more information about that scheme.

Have ministers taken anyone into their departments?

We are actively looking across the public sector. I said in response to an earlier question that it would be inappropriate for us to demand that others do things that we are not prepared to do ourselves. I have been at pains to ensure that the Scottish Executive and the civil service are as engaged in the agenda as we expect the oil and gas industry, the service sector or construction industry employers to be. The health service is a classic case. We believe that we can, for example, get people with mental health problems, who are a key cohort, re-engaged with the world of work. Where better to do such things than in the health service?

The Minister for Communities and I are interested in coalfields. Funds such as those held by the Coalfields Regeneration Trust are for community regeneration and for supporting employment. Such funds will not be suitable for all areas where there are many people in the NEET category, but are you considering how those sources of funding can help to support other activities?

Absolutely. I reinforce what I said about the need to integrate funding streams and to recognise that particular funding streams are targeted at particular areas. Like Allan Wilson, I represent a former coalmining area. Therefore, I am aware of the challenges that such areas face. Such funds are critical, but we must ensure that we work jointly with organisations and take an integrated approach, while recognising the individual remits of those organisations.

Interesting work was carried out in Renfrewshire, the results of which apply throughout post-industrial Scotland—to coalfield communities, steelworking communities and so on. That work identified around 84 projects in Renfrewshire, where some 112 funders were spending £12.8 million. It strikes me, and, no doubt, people there and other members, that that represents a less than effective and efficient use of resources. People should sit down and consider matters coherently and ask whether the best return is being achieved for that £12.8 million and whether 84 projects are needed. They should consider whether replication or duplication is involved and ask whether some of that money should be spent on earlier engagement or better aftercare. Such a process would be logical.

There could be a common application form. That takes us back to the point that Stewart Maxwell made about filling in application forms for funding.

Absolutely.

That point can no doubt be added to Mr McCabe's report on efficient government.

I thank the ministers and their officials for coming to the meeting. The session has been extremely helpful. For obvious reasons, the issue will be included in our legacy paper. Our successor committee after the election can then give it reasonable priority.