The Work Programme - Learning from the Past
1 Sep 2010
Nii Djan Tackey, Research Fellow
Welfare reform is central to the government’s ambition to address the problem of growing unemployment and worklessness. An early indication of government thinking was set out in a policy speech by Lord Freud at the IES annual policy conference (Whither Welfare to Work?) in November 2009. Lord Freud envisaged a new programme that would bring ‘a good number of the [existing] programmes into one programme, rather than having . . . several’. Among the rationales for such radical reform was a particular view that there were groups of people who were circulating round the welfare-to-work system; from one initiative or another, to short-term jobs, to benefits, and back again.
Features of the Work Programme
The new government plans to end most, if not all, of the welfare-to-work programmes and initiatives of the previous Labour administration, and intends to create in their place a single, comprehensive Work Programme to help all unemployed people get back into work. It is envisaged that the Work Programme will be up and running by 2011, underpinned by some key features:
- an outcome-related funding model that incentivises welfare-to-work providers to help people into employment with payments associated with sustained job outcomes
- a greater role for large private and voluntary sector providers who will be granted bigger, more ambitious and longer-term contracts, free from state interference, which will encourage (and enable) providers to apply their own approaches to getting people back into work through greater specialisation. Providers (or consortia of providers) will be expected to be well-capitalised and well-resourced, with the scale to handle, simultaneously, unemployed and disadvantaged groups with vastly varying needs.
- more mandating, such that benefits for unemployed people who are able to work, are conditional on their willingness to work. The government intends to cut benefit payments if recipients ‘don’t do the right thing’. The Secretary of State for Work and Pensions, Iain Duncan Smith, has stated (25 May 2010) that if taxpayers are helping people to get back into work, then they ‘also have a right to expect that those they support are ready and willing to take on work if it is offered’.
It is clear that the government is planning a fundamental shift in the welfare-to-work landscape. However, while it is still under development, it is useful to look at the proposals that have been announced so far, and see what lessons the Work Programme can learn from welfare-to-work initiatives from the past.
Funding by results
One of the most important lessons from the raft of welfare-to-work initiatives during the last ten years or so, is that people who are very disadvantaged do not move easily into jobs. Indeed, job outcomes are often not possible for people who are very far from the labour market. Consequently, the emphasis given to outcome-related funding, and paying largely for results has inherent problems for the hardest to help.
At worst, outcome-related funding is likely to result in ‘creaming’ and ‘parking’, whereby providers prioritise those people who are closest to the labour market over those much further from it. The problem of creaming is likely to be worse during economic recession, and there is anecdotal evidence to suggest that new jobseekers have squeezed out the long-term unemployed in the rush for jobs. Other evidence from previous Department for Work and Pensions (DWP) research has shown that outcome-related funding encouraged private sector led organisations to work with easier-to-help clients, as there was little incentive to help those with multiple barriers get closer to employment.
Research undertaken by the Institute on the early implementation of the Employment and Support Allowance (ESA) showed that welfare-to-work providers who were helping people allocated to the work-related activity group following a Work Capability Assessment (WCA) had concerns about their unexpectedly severe health problems: many reported that these people would be particularly difficult to help into employment (although the WCA found them able to prepare for a return to work). Many more ESA claimants are being found fit for work (statistics released in July 2010 show that 66 per cent of all claimants going through the WCA process were found fit for work ). The unemployed cohort is likely to contain even more people who are harder-to-help as plans to move Incapacity Benefit claimants through the WCA and onto ESA and Jobseekers Allowance gather pace.
It is often small, specialised providers who are most likely to work with the hardest to help, but most such providers have much fewer resources, and are unlikely to achieve hard (job) outcomes quickly for these people. Soft (incremental) outcomes are important, and in many cases critical for many claimants, particularly the hardest to help or to reach, as they are so far from the labour market. It is not yet clear how, or if, such outcomes will be rewarded.
Content of the Programme
So, what can be learned from previous initiatives and research to inform the design and content of the Work Programme? Drawing on IES’s considerable experience of evaluating welfare-to-work initiatives, it is possible to identify some success factors:
Local approaches and partnership working: Worklessness is often entrenched at a community or neighbourhood level and requires action and input from strategic partners at that level. Local approaches to welfare-to-work have been shown to be effective at addressing the problems of people with multiple barriers and getting them back into work. A role for local authorities and other strategic partners, such as (the soon-to-be appointed) Local Enterprise Partnerships (LEPs), as well as the voluntary and third sectors, will greatly enhance the effectiveness of the Work Programme in tackling the issue of worklessness.
Outreach and engagement: It is important to reach and engage the full range of disadvantaged groups, including the traditionally harder to reach and harder to help groups, and this has often been shown to be effective in local community or outreach settings. The evidence available so far suggests that private sector led provider organisations may be less successful at helping these people into work. The Work Programme must ensure there is co-ordination of services at the local level and that funding is not disproportionately focused on the more job-ready groups who have less severe disadvantages, and which provide short-term wins for providers. Provision may need to be offered in local areas, closest to those requiring the most help.
Personalised, holistic packages of support: The longer people stay on benefit, the greater and more complex the barriers they face to get back into employment. People who are furthest away from the labour market require personalised services that provide what they need to increase their employability rather than a one-size fits all approach. The types of interventions that have been shown to work include: regular support from personal advisors with the flexibility to deliver to specific needs; engendering and maintaining the motivation and confidence of individuals; and tackling basic skills problems at an early stage. Such personalised approaches can be expensive to deliver, and will require imaginative funding. The anticipated influx of IB claimants to the JSA regime as the Employment and Support Allowance rolls out is going to make such flexible approaches even more crucial and is likely to require significant provision to overcome health-related barriers to work.
Employer engagement and in-work support: A demand-led approach to welfare-to-work, which places employers at the heart of any initiative to get unemployed people back into work, will be even more important to the Work Programme than before. DWP research has shown that private sector led provider organisations have very good local employer links, and have dedicated members of staff to manage their relationships with employers. But while employers provide the initial vital link between work preparation and real jobs, it is equally important that there is ongoing support for people when they get into a job. This is particularly important for people who have been out of the labour market for a long period of time. Ongoing in-work support is necessary to build emotional resilience and keep people in work for longer.
- Chris Grayling, Minister for Employment. Address to Welfare Providers, 2 June 2010
- Casebourne J, Davis S, Page R, Review of Action Teams for Jobs, Department for Work and Pensions Research Report No. 328, 2006. Hudson M, Phillips J, Ray K, Vegeris S, Davidson R, The Influence of Outcome-based Contracting on Provider-led Pathways to Work, Department for Work and Pensions Research Report No. 638, 2010
- Barnes H, Sissons P, Aston J, Dewson S, Stevens H, Williams C, Francis R, Employment and Support Allowance: Early implementation experiences of customers and staff, Department for Work and Pensions Research Report No. 631, 2010
- Employment and Support Allowance: Work Capability Assessment: Official Statistics, July 2010
- Support to incapacity benefits claimants through Pathways to Work, 13 September 2010
- Casebourne et al., op. cit.
For more information on this work, please contact Jim Hillage at IES.