Dr. John Sweeney:

On behalf of our chairman and other members of the council, I welcome and I am grateful for the joint committee's interest in the role and work of the Labour Market Council. I am afraid my invitation came at short notice; therefore, this will not be a collectively crafted presentation. However, I am delighted to be here and will endeavour to speak with the mind of the council, although flagging clearly that committee members will be listening to a member of the council rather than to the council.

I suspect I was invited to be a member of the Labour Market Council because of work I had done while I was with the National Economic and Social Council. I will begin with a few words on the Labour Market Council and how it functions and then draw attention to what I consider to be key observations in its response to the Pathways to Work strategy before concluding with personal reflections on where I believe the single most important front line on which the activation strategy must now work lies.

The Labour Market Council is a body to advise the Government and first met in September 2013. It is made up of 13 industry leaders and labour market specialists who become members at the invitation of the Minister for Social Protection and participate voluntarily. Its overarching strategy is to monitor implementation of the Pathways to Work strategy. Senior staff from the Department attend meetings, sometimes in significant numbers, as do senior officials from key other Departments. It is my experience that discussions are open and frank, both between members who come from very different backgrounds and three of whom were present at the committee's last meeting and, importantly, between council members and senior departmental staff. It is clear that the council is in the Department but not of it. It has to be supportive of it and yet independent of it.

Pathways to Work has evolved from being a Government statement on activation to being a 50-point plan to tackle long-term unemployment. It is now a five-year strategy. With that, the role and expectations of the Labour Market Council itself have evolved. It is now described as the Government's primary advisory body on labour market policy.

Given all of this, one might regret that the Labour Market Council has produced only two short written reports that are general. I did not mean to overlook the long 22-page text we produced on the JobBridge evaluation by Indecon and London Economics. As such, the council has had little impact on the media and outside world and, probably, on the committee. This is partly because it is a large and labour-intensive step to move from open, frank discussion to agreed texts. I note that point having worked for many years with the National Economic and Social Council, the normal summaries of which tended to comprise large, voluminous reports that carefully marshalled evidence and presented both sides of a long debate before making recommendations. It is also because most of our time as council members is devoted to dealing with issues of plumbing, as it were, in implementing the Pathways to Work strategy. I draw members' attention to the work of the employer engagement subgroup and that of the evaluation subgroup, of which I am a member.

On the evaluation subgroup, there is in Ireland a dearth of reliable evidence on what many of the programmes funded by the State achieved down the line for their participants. Traditionally, we have been good at funding programmes on the basis of inputs or throughput. The programme in question has a greatly disadvantaged intake; therefore, we fund it without asking the hard question as to whether it is achieving what we expect and hope for for the participants. Enter what is called "CIE", not the public transport body but "counterfactual impact evaluation".

The evaluation subgroup is to the fore in embracing this and encouraging the Department to employ it as much as possible in the rigorous evaluation of services and programmes that constitute Pathways to Work. Very simply, CIE sets out to establish the net difference being in a programme makes to those who participate in it. It requires establishing comparable groups of individuals who took part in the programme and those who did not as strictly and carefully as possible. The perspective of the council is that only these evaluations will help policy to learn from success and failure and only such research findings can be used to decide which programmes and services should be scaled up and which should be redesigned, scaled back or even closed.

I am aware that the politics of policy-making are not kind to this type of evaluation. What the media selects for attention and returns to regularly becomes received wisdom that is accepted because people have heard and read about it so often and not because it has a reliable basis in fact. A new Government or Minister can be impatient to make a difference in a national programme or service and to be seen to make a difference. They do not want to be told that something is interesting, that a pilot programme will be designed and evaluated and that they will get back to the Minister in a few years. The wider the media-fuelled sympathy for a new departure, the more pressure there is to roll it out immediately and to exclude nobody or no part of the country from it. Yet CIE evaluations, by nature, take time and require delaying access by the many to what is an anticipated and hoped-for improvement in a service or programme. As I have said, these are not features calculated to appeal to people caught in the electoral cycle and the rough and tumble of constituency politics.

Rigorous evaluation is also important if we are to not assume that Pathways to Work is "evidently" working simply because, as the committee heard at its last meeting, most of the core trends in the labour market, particularly in unemployment, are very encouraging. It took us ten years after the fiscal crisis of the 1980s to reduce the unemployment rate by six percentage points. It has taken us four years to achieve the same since the last great recession. Similarly, long-term unemployment, youth unemployment and now jobless households indicators are fast heading down in the right direction. The Central Bank quarterly bulletin that has just been issued anticipates that unemployment this year will be under 7% and will reach 6% in 2018. We are in sight of full employment. The council cautions that the impact of Pathways to Work on these great developments cannot yet be assumed until its programme of rigorous evaluation is completed. Only this approach to evaluation allows us to factor out the impact of the improving economy, the Action Plan for Jobs and other programmes. Only then can it be concluded that this particular approach to activation has contributed significantly to it.

To date, two evaluations, of the back to education allowance, BTEA, and JobBridge, have been published by the Department of Social Protection with the council's sign off. A third evaluation of the back to work enterprise allowance is about to appear. Very specific learning has been associated with each. For example, the evaluation of the BTEA was stunningly negative but was so focused on impacts alone that a follow-up qualitative evaluation to find out just what was happening is now under way. The evaluation of JobBridge was hugely positive but abuse of the programme by a number of employers and the extent to which this lodged in the public mind had already brought the Government to set its face against it. JobBridge has been closed and no action yet taken on a smaller redesigned replacement proposed by the council. The current Minister for Social Protection addressed the council a while ago. I thought his quip when he spoke about community employment was very appropriate. He said that economists do not like community employment because it does not work and that politicians like it because it does. I feel the same can be said about the BTEA allowance. Economists do not like it because it does not work but politicians like it because it does. I feel the reverse is true in the case of JobBridge. Economists liked it because it was working but politicians did not like it because it was not working. Further specific programmes targeted for evaluations include the Intreo process, JobsPlus, MOMENTUM and community employment.

However, for several reasons, I believe that none will be as important as the evaluation of JobPath. Its scale makes it the single biggest innovation introduced under the Pathways to Work strategy. It has capacity for an average annual caseload of almost 100,000 people and will offer services to 137,000 people who are long-term unemployed. Between them, the two contracted private providers have, in effect, doubled the number of case officers in place to engage with people on the live register. The roll-out of JobPath began in mid-2015 and only now, beginning in 2017, is it up and running throughout the State. The timing makes it too late to claim credit for the significant developments in the labour market to which I have referred. Great Britain's work programme, on which JobPath was modelled, has had only modest success and some clear design flaws. The UK Department for Work and Pensions has discontinued it and replaced it with a smaller redesigned programme called Work and Health. Employment services are now, in effect, being delivered to the long-term unemployed by quite different types of provider, principally Intreo local offices themselves, the local employment service, the two different JobPath contractors and jobs clubs. This presents major opportunities for peer review and learning across the organisations involved. A return flow to Intreo of people whom JobPath contractors were unable to help has begun and will grow in volume. This underlines how important it is that Intreo's own case officers and divisional managers learn as much as possible from what JobPath contractors did and what they did and did not achieve. Very initial indicators of the performance of JobPath are overwhelmingly positive, which is hugely to be welcomed. Looking at the evaluations of the work programme in Great Britain, they are almost surprisingly positive. It is clearly an area on which the council will keep a very close eye.

The Labour Market Council makes three recommendations or endorsements in its response to Pathways to Work 2016-2020 that I invite members to dip into. I believe that each of them can go forward because of the happy conjuncture of the large decline in the numbers on the live register and the significant increase in the capacity that is available to the public employment services. In the time available, I will only expand on the third recommendation, but I have already flagged that I will be commenting as a member. What are the three issues? The council strongly endorses extending the remit of the public employment services beyond those currently unemployed and those on the live register to embrace all adults of working age in receipt of a social welfare payment such as adult dependants, lone parents with school-going children and people with a disability or health condition who have an interest in employment that matches their capabilities.

It emphasises that this wider embrace by our activation strategies of people on social welfare should happen only as resources allow and without jeopardising the priority needs of the long-term nd young unemployed. The rationale behind that is both social, involving people's well-being and social inclusion, and economic, which involves a higher employment rate or net fiscal contribution.

In 2005 the National Economic and Social Council looked at this issue in some depth and argued that Ireland would have to develop a social model based on a high level of employment. It also stated that to do that, we needed to bring into and hold in employment groups that had need for multiple supports. It argued that most of those supports took the form of key quality services from child care to access to housing, transport, health and ongoing education and training opportunities. The second main message to which I will draw the committee's attention is that the council urges that attention now be given to the quality of the engagement the public employment services has with employers and jobseekers to ensure the capabilities and culture of Intreo, not just its capacity, will meet the highest standards. It argues that a culture of active inclusion and equality needs to be incorporated into it, particularly if it is to engage effectively with groups in receipt of payments for an inactive status. It states:

(T)he target group is very heterogeneous and we know little about what works best. Important lessons can be learned from the work of non-governmental, community and local development organisations.

The analogy should be with what we know about what makes for good education at school level. We might talk about the resources - the quality of IT resources, access to broadband in schools, pupil-teacher ratios and the quality of school buildings - but in the long run, if there are not good teachers and good school leadership, nothing much will happen. However, when there are good teachers and strong school leadership, many other obstacles can be surmounted. In the long run, the capabilities, culture and mindset of case officers and those who lead them in the public employment services are critical.

On this last message in the council's response I will comment a little more. The council wants to see even clear plans for how collaboration between employment service providers and education and training providers will deepen and improve. It specifies that it would like to see, in particular, assurances that a consistent and high standard of career guidance service will be provided. More generally, it argues that Pathways to Work 2016 to 2020 should be closely aligned with broader Government policy, including Enterprise 2025, the national and regional action plans for jobs and the national skills strategy 2025.

I will end by commenting on that aspect in an individual capacity rather than speaking with the authority of all council members. If we are to align activation policies with the type of economy which we are intent on creating and the characteristics of the workforce we see as enabling it, one of the key areas where consensus needs to be deepened is the frequently controversial issue of job quality. In its response the council notes the importance of ascertaining the quality of the jobs taken by the long-term unemployed and the role played by employment programmes in that regard. It notes that there are concerns about employment stability and career progression once jobseekers find work. As a group, the council still inclines more towards improving in-work supports than advocating stronger upskilling prior to employment, that is, more towards a work first approach to alleviate the plight of the long-term unemployed than to a train-first approach.

It is clear that many pieces of labour market evidence support a work-first approach. I will quickly draw attention to four pieces of evidence. A significant number of the job openings that continue to arise in advanced economies like Ireland are conventionally low skilled. The dignity of a job and its value to the community and national economy should not be predicated on its skill level. Many on the live register express little interest in undertaking substantial training. The viability of the business models of a large number of enterprises, especially SMEs, would be undermined if they had to pay higher wages. For some people, getting into any job at all can prove to be the beginning of a process of recovery of their self-confidence and widening options which leads to higher quality employment down the line. As the recovery in employment leaves behind an increasingly disadvantaged clientele, the value to them of any job at all needs to be increasingly factored in.

I should have warned the committee that I am an economist. Therefore, I will say that, on the other hand, there is evidence and reasoning that support the train-first approach. Low-skilled jobs are not what they used to be, but, according to a European report, they are becoming surprisingly demanding. I know that a human resource manager from the North of Ireland who came to an Intreo office just across the Border to recruit for her fast expanding franchise in Northern Ireland and went home without taking one person. She said it was not appreciated how demanding the jobs in the fast food sector had become.

Soft skills are growing in importance in gaining any job. At the last meeting of the committee IBEC reminded it eloquently of this. Soft skills are not acquired easily or instantly. They are, according to a McKinsey report, hard work. It is a major challenge to education and training providers to raise them from being easy modules used to pack out programmes and curricula to being serious modules that achieve demonstrable improvements in competency. There is little evidence that placing low-skilled individuals in low-skilled jobs makes it more likely that they will upskill later. If anything, the evidence is to the contrary.

As the recovery in employment leaves behind an increasingly disadvantaged clientele, it becomes more important than ever that literacy, numeracy and digital deficits be accurately diagnosed and effectively addressed. In 2012 we were given stunning figures for the extent of deficits in basic literacy among the unemployed in Ireland.

I will end with my personal view that aligning Pathways to Work more closely with broader national policies on the economy and skills will require us to move from a work-first to a train-first strategy. As I read them, there is little tolerance, let alone enthusiasm, in the national and regional action plans for jobs, the national skills strategy 2025 or Enterprise 2025 of any of the perils to which the literature points when low-skilled individuals are matched with low-skilled jobs. The dangers include trapping people in a low pay, no pay cycle; having them fill dead-end jobs that do not even require the exercise of the skills they possess, much less offer opportunities to improve on them; closed circuits that restrict people’s experience of the world of work to employment opportunities in their local area; and low-skilled equilibria at regional and local level that hold back the dynamism of their economies. As the committee can see, the literature is rich.

On the contrary, the successive reiterations of the Action Plan for Jobs have made clear that the jobs to replace the 100,000 lost in the recession should be a type that enables employers to pay and employees to earn at levels that do not require wage subsidies or in-work benefits on an ongoing basis. The national skills strategy 2025 commits to helping those on the live register achieve "quality employment" and "the best possible job" by upskilling them through "bespoke courses" that are jointly designed by education providers, employers and the enterprise agencies. My favourite quote, however, is from Enterprise 2025, Ireland's national enterprise policy report, which describes a "highly skilled and adaptive people, equipped with the higher order capabilities required in the 21st century workplace and [open] to continuous learning" as the economy's "primary asset" to underpin "high levels of productivity and innovativeness". This vision and ambition for Ireland’s workforce must also embrace its unemployed members, as well as those who are inactive and who wish to join it.The train-first approach needs to become the default position and the preferred strategy, all other things being equal, in helping the long-term unemployed to find and retain decent employment. We need to move from a compelling reason to deal with numbers to a quieter reason to deal with quality. We need to move from preventing the drift into long-term unemployment towards dealing with skills shortages. In short, to make progress, we can now hasten slowly, or festina lente.A deepening and widening collaboration between employment service providers and educational training providers is probably the single greatest challenge facing the implementation of Pathways to Work 2016-2020.