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London Olympics (Employment)

Volume 475: debated on Friday 16 May 2008

Motion made, and Question proposed, That this House do now adjourn.—[Alison Seabeck.]

It gives me great pleasure to speak on the vital issue of the London 2012 Olympics and their possibilities for regenerating the lives of people in the Olympic boroughs in the east end. I clearly remember where I was when it was announced that London had won the bid to host the 2012 Olympics. In common with most Londoners, I was thrilled and excited—more than I had anticipated being. It is appropriate at this point to note the tremendous work and commitment of the then Prime Minister, the then Mayor of London and my right hon. Friend the Minister for the Olympics in helping us win the bid.

I was thrilled and excited not only because it is a huge honour for London to play host to one of the greatest international events but because of the possibilities for the regeneration of the east end. It seemed to me that not only was the country poised to host this tremendous event, but the east end of London, which includes some of the poorest communities in the country, also stood to benefit.

Three years later, I am still a strong supporter of the Olympics and hugely optimistic about what the Olympics can do for the east end of London and my constituency. As the plans have unfolded, we have all seen what an ambitious and creative project hosting the Olympics is. We now have a new Mayor in London, and whereas I knew the commitment of the old Mayor using the Olympics for regeneration, one has yet to hear in detail from the new Mayor. It therefore seemed to me appropriate to come to the House at this point to set out what the people who live in the Olympic boroughs in the east end of London were promised and what progress has been made on jobs, business and employment.

For the Olympics to be a genuine success for this country, for London and for the five east end host boroughs, the people who live in Hackney, Newham, Tower Hamlets and the other Olympic boroughs must believe that they really will benefit from hosting the event; otherwise, the people of the east end will be like children pressing their noses against a window when something exciting and glamorous is happening on the other side. Local residents must feel that the employment possibilities for them and their children are going to rise. They must feel that the wonderful Olympic park, media centre and other buildings really will be turned into spaces that the community can use after the big event. It is important to remember that not just the local authorities of the five boroughs, and not just the streets, buildings and open land, but the people who live there are hosting the Olympics. Those people deserve to be part of the Olympics and to benefit from them.

However, it is not just a matter of principle. I remind the House that the five host boroughs—Greenwich, Tower Hamlets, Newham, Waltham Forest and Hackney—are among some of the poorest areas in the country. In fact, they are all among the 15 per cent. most deprived areas in the country, and my constituency of Hackney is in the bottom 5 per cent. Even at a time when the Government have done so much to invest in training and to put people into employment, only 55 per cent. of people of working age in Hackney are in employment. That is not just an abstract figure. There is a direct relationship between the problems that we see in our inner cities of gangs, deprivation and social exclusion and the continuing very low employment rates in the east end. As the former Mayor of London, Ken Livingstone, remarked, many parts of the east end of London have not seen major regeneration since the Victorian era. The importance of getting economic regeneration right is immense. The Olympics represent a significant opportunity to turn round the fortunes of these poor areas and change the lives of the people who live there. For those of us who live in the east end, that means better transport links, improved facilities, a cleaner local environment, better access to sport, particularly for young people, and jobs for local people and contracts for local businesses. I will concentrate on the last two issues—jobs for local people and contracts for local businesses—in my remarks.

Let me remind the House of what was promised to the east end from the 2012 Olympics. In June 2006, my right hon. Friend the Minister for the Olympics said:

“We are determined to ensure that legacy is at the heart of everything we do, whether it is delivering world-class stadia or providing grassroots facilities designed to benefit the whole community.”

In October 2006, Lord Coe, chairman of the London 2012 organising committee, said:

“London was chosen to host the 2012 Games because of its diversity, unique heritage and the enthusiasm of local people. We want to invite people from all of London’s communities, particularly those who live around the Olympic park, to get involved and to reap the benefits the Games will bring.”

In its 2012 annual report, the Department for Culture, Media and Sport named one of the key objectives of the Olympics as:

“To maximise the economic, social, health and environmental benefits of the Games for the UK, particularly east London.”

I stress “economic”. The Olympic Delivery Authority says in its 2008 employment and skills strategy:

“London 2012 is committed to creating a positive employment and economic legacy for London and the UK after the Games. This will be achieved through the creation of new jobs, an increase in sustainable skills among local people and improved links between employers and those looking for work, recognising the high proportion of Black, Asian and minority ethnic people in the community.”

Those are very hopeful words.

When we add the sheer volume of investment and work that needs to be done on the Olympic site to the hopeful words that the people of the east end have heard, we can see the possibilities. Five permanent venues will be built, as well as three temporary venues, one media centre, earthworks, landscaping work, 11 highway bridges, 13 permanent footbridges, extensive land clearing, waterways and new roads. And that is just to build the park. Once the games are over, there will be a large amount of work to do to transform the park into legacy mode. Recent research by ConstructionSkills—the sector skills council for the construction industry—found that because of the Olympics construction work in Greater London, construction jobs will grow in number by 8.4 per cent. between 2008 and 2012. Its research predicts that 14,930 new recruits will be needed every year to meet that demand and 3,000 construction, professional and technical staff will be needed each year until the end of the games.

A huge amount of money is going in. The Government are providing at least £5.9 billion; the Greater London authority and the London Development Agency are providing £1.17 billion; and the launch of the London 2012 business network includes details of £6 billion of contracts, and an estimated 10,000 to 20,000 associated supply chain opportunities. That represents huge potential for local people and local businesses. It is perfectly true that the ODA and the LDA have produced plenty of papers. They are planning training and skills programmes and there has been a lot of talk about employment possibilities and creating an Olympic work force that looks like multicultural London. Sadly, it seems to me that the reality does not match the talk. It does not match what people have been promised, the number of jobs that will be created or the billions of pounds of public money that have been invested in the Olympics. I know that people have been meeting; there have been committees, papers have been drawn up and people have highly paid jobs that ostensibly speak to that agenda, but it is important to highlight the problems and draw attention to what is happening now before it is too late for the employment benefits of the Olympics to make a difference to my constituents. I worry that by waiting to see whether local businesses are able to access tenders and whether local people get training, we may be waiting for one, two or three years in which local people have missed out.

I am sorry to say that the current figures are dismal. Despite the billions of pounds being poured into the construction of the Olympic park, the numerous training programmes and the huge amount of labour that needs doing, the number of people from the east end who have received jobs there remains low. I understand that only 430 people from the five host boroughs are currently employed in Olympic jobs, out of a possible 2,488 jobs that have been given out so far. Employees from the host boroughs make up only 17 per cent. of the total Olympic work force, and out of those figures, sadly, Hackney has the lowest number of residents involved in Olympic jobs. Just 48 Hackney residents have Olympic jobs out of the 2,488 people employed.

Unfortunately, the situation does not look much better for training, about which there has been a lot of talk. The training programmes designed to get local people into Olympic jobs have not had much success. A programme called Personal Best was piloted in Hackney, and 50 local residents graduated from it. But out of those 50, only two have secured employment whilst eight have been taken up as volunteers. The Olympic Delivery Authority scheme aimed at getting local people involved with the Olympics has put only eight Hackney residents into employment. As for local businesses, business suppliers to the Olympics total 600 at the moment. Out of those 600 businesses, only 77 are based in the Olympic boroughs and only 13 in Hackney. That means that Hackney businesses have just 2 per cent. of the business tenders available so far. That is simply not good enough and it would not be surprising if local people began to think that all the talk about them benefiting from this huge billion-pound extravaganza was simply talk.

The Olympic Delivery Authority’s equality and diversity strategy sets out the ODA’s aims—widening participation and opening up the construction industry to under-represented groups such as women and black people—and claims that they can be achieved by following a fair recruitment process and adhering to equal opportunities. That is admirable, but in reality a fair recruitment process and adhering to equal opportunities are the bare legal minimum, and what we should expect of any company or organisation. They are not proactive ways of increasing diversity; if anything, they are simply ways of maintaining the status quo.

The Department’s annual report does not focus much on local employment. Instead, it talks of the aim of local participation in cultural and community activities and volunteering. I have been there before. When billions of pounds were being spent on the Dome, I went to talk to those who were running the project about jobs for local people in Greenwich. All I heard about was volunteering. In the end, local people and companies did not benefit from the Dome as they should have, although there is now a fabulous building there, in south-east London.

I do not dismiss the benefits of voluntary work, but I do not want efforts to secure volunteers to detract from the crucial need for local people to be given paid employment. It strikes me as somewhat patronising to suggest that the residents of the Olympic host boroughs will remain compliant as long as they are thrown some cultural activities or volunteering work. If the Olympics are to have an impact on levels of unemployment, deprivation and social exclusion in the east end, they must focus on the employment issues.

I do not think that those who talk of employment for local people have got to grips with a proactive strategy. The ODA tells me that it aims to employ 10 to 15 per cent. of people in the Olympic park construction work force from the five host boroughs. It says that that is the average number of people currently employed on a typical work site in London, but I say that it is a pitifully unambitious target. The public have not spent billions of pounds on the Olympics only to achieve that level of employment. The Olympic project should be raising the stakes. It will have no sustainability if local people see 85 to 90 per cent. of jobs going to outsiders.

I am concerned about the low targets, and about the lack of a proactive strategy not just to make the Olympic park reflect employment realities now, but to make the Olympic park, Olympic construction and Olympic development show the way towards what can be done to employ and give opportunities to local people. I am sure that the Department is not merely cashing in on the image of London as a multicultural city, or on the idea that the Olympics will take a deprived region out of poverty—whereas, in reality, few local people have Olympic jobs or contracts—but that is how things look at present.

It seems to me that if the Government, the Mayor and the ODA are to make good the promises made to the east end three years ago, we need a much more proactive and urgent strategy both to put local people into jobs and training and to give local business, particularly small business, access to the tendering process. The current targets appear to admit defeat before even trying to increase local employment. There is a danger that some of the big employers will get away with making token gestures rather than doing the sort of work that was done at the time of the Atlanta Olympics, which represented a huge stepping-stone for black business and jobs for local young people because the necessary political leadership was there.

I remain as thrilled and idealistic about the Olympics as I was when I first heard that our bid had been successful. I bow to no one in my respect for the people, including my right hon. Friend the Minister, who were the architects of that successful bid. However, if we are not to see deepening disillusionment in the east end over this major project, we must deliver both the practical and the political meaning of the promises that were made about regeneration.

I would not like the change of Mayor to lead to a slackening of the emphasis on economic regeneration and jobs for local people. It is not enough to have meetings and working parties. It is not enough to draw out strategies on paper. It is not enough to recruit highly paid persons with supposed responsibility for these issues. The stakeholders involved in 2012 must raise their game and achieve concrete targets for local employment and local regeneration.

I congratulate my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) on securing this important debate. I agree with almost everything she has to say—both in terms of her analysis and her challenges. She is right that when we made our bid to host the 2012 Olympics the then Mayor, Ken Livingstone, and I were absolutely clear that were we to win, it would accelerate the regeneration of east London by 10 to 15 years and on a scale that would be unimaginable if we did not win. I wish to take this opportunity to place on record the Government’s recognition of the enormous contribution the previous Mayor made both to our winning the Olympics and to securing those regeneration ambitions.

My hon. Friend is right that it has been envisaged that the legacy of the games will take two forms. The first is the structures, including the venues, the approximately 10,000 new homes by 2020 and the largest urban park anywhere in Europe for 150 years. The park will be a destination for not only the five boroughs, but the whole of London, and it will be populated by not only new environmental features but world-class venues, each of which is being designed with two objectives. One of them is community use and the benefit of the local community—there must be no local people longingly pressing their noses against the window because they are excluded, as that would be a travesty. The other objective is to provide the world-class venues that London has lacked for too long. It is worth reminding my hon. Friend that of the £8.1 billion—£6.1 billion plus £2 billion of contingency—that is available for the development of the park, 75p out of every pound spent will go on regenerating the wasteland that disfigures those boroughs following generations of neglect.

My hon. Friend eloquently described the second part of the legacy: the increased skills in five of the most deprived boroughs in the country. I shall deal in detail with the points she made. Our ambition always exceeded simply hosting the Olympics and Paralympics—and I should underline the extent to which our ambition goes further, and is being realised more quickly in practice, than in any other Olympic city.

As my hon. Friend knows, economic activity in the five boroughs is well below that of London and the rest of the UK: 40 per cent. of the working-age population are unemployed, 40 per cent. of the residents of the host boroughs are black and ethnic minority, and 22 per cent. have no educational qualifications. My hon. Friend has raised some sharp challenges for the work being undertaken by the Olympic Delivery Authority.

My first response to those challenges is to say that we must see the progress that has been made—which is by no means the extent of the ambition—in the context of generations of neglect in developing the skills and potential of so many of the people who live in the five boroughs. The Olympics and Paralympics provide unprecedented opportunities for those individuals and for local business. In providing those opportunities, we are rising to a challenge that sits at the heart of the Government’s ambition to raise the bar and to see the increase in the skill level as an essential driver of economic growth.

Two objectives in the bid and the staging plans for the 2012 Olympics are to regenerate east London socially and economically, and to regenerate it physically. We want to give new opportunities to people, particularly those who are furthest from the labour market and have absolutely no educational qualifications, thus creating opportunities for people in those circumstances to get into work and training and breaking the cycle of unemployment and deprivation.

I should say a word about apprenticeships, of which Hackney has fewer than 100. A commitment has been made through the skills academy that has been established for the Olympic park, focusing specifically on construction skills. The commitment is for 2,000 apprenticeships and work experience work placement opportunities, which will transform the entry point opportunities for people in the Olympic boroughs.

The Olympic Delivery Authority is responsible for overseeing the construction, and I wish to discuss its employment and skills plans. Its job, more than anything else, is to deliver the games on time and on budget, but, in doing so, to create a legacy of better trained workers with the prospect of better careers. My hon. Friend has challenged what she sees as the timidity—that is my word, rather than hers—of the ODA’s figures, and I should put that into context.

The ODA’s target is for 10 to 15 per cent. of the total work force to come from the local boroughs. The industry norm, which we must accept is a baseline, is between only 3 and 5 per cent, so the ambition is considerably greater. A second target is to ensure that 7 per cent. of the work force is made up of people who were previously unemployed, which compares with an industry norm of between 3 and 5 per cent. and a figure of 22 per cent in respect of those who come from Hackney. I accept my hon. Friend’s point that when things are translated into specific numbers, the numbers involved are small. The strategy focuses on getting people into training and employment, reflecting the skill levels in the area.

I recognise that Hackney’s local labour figure is low, but I can assure my hon. Friend that the ODA and the London Development Agency—my discussions thus far with the new Mayor give me no reason to believe that he will resile from this commitment—are working to address the low level of Hackney residents getting jobs on the park. The LDA is granting Hackney funds to build the capacity of its job brokerage scheme, and the ODA is working with it directly to analyse what more needs to be done to increase the number of Hackney residents gaining jobs on the site. By our deeds, rather than by our good intentions, shall we be judged, and that was the thrust of my hon. Friend’s speech.

There are early successes. The Personal Best scheme, to which my hon. Friend referred, is working with people who are as far as it is possible to imagine from the labour market. Every graduate of that scheme who gets into work is a story of hope in a context—for those people—of hopelessness and complete lack of ambition.

Time is short, and I hope that there will be many other chances to go through with my hon. Friend the many opportunities that will be provided. If we fail, we will have betrayed the great ambition we have for the Olympics in east London. We will not fail and, with my hon. Friend’s advocacy, we have an even greater chance of success.

Question put and agreed to.

Adjourned accordingly at Three o’clock.