Memorandum submitted by the Work Foundation
(ES 02)
1. Unemployment is at its lowest since the
1970s, employment has never been higher and yet there are people
and places that have persistently failed to benefit from the UK's
booming labour market. The "hardest to help" are now
a feature of the welfare to work policy debatean acknowledgement
that unemployment is proving a stubborn problem amongst certain
groups of people. Government policy has not moved rapidly towards
the view that this problem is also about particular geographical
locations, and ultimately, the combination of such places and
particular types of people.
2. Economically, it appears rational to
look at the big picturesafely stewarding the entire labour
market and hoping for gradual improvements amongst the most disadvantaged.
Politically, this is less attractive. Where communities continue
to feel sidelined from the UK labour market, the macro-economic
narrative may not win either the confidence or loyalty of its
voters. This is especially true for those areas of the country
and for those types of people who have apparently failed to recover
any sense of labour market prosperity since more recent downturns.
Such people and places are likely to be again the worst hit in
any current slowdown. This is because new job creation records
have been poor, new skills have been hard to come by and the infrastructure
that supports local labour markets have deteriorated. In this
sense any further erosion of the levels of economic activity in
such areas will, as in the past, be very difficult to replace
with new sources of job growth. In other more adaptive and resource
and infrastructure rich areas of the UK, the job creation records
are likely to remain high thus allowing a constant replacement
of job loss with new opportunities.
3. Up to now, welfare to work strategies
have been explicitly concerned with moving benefit claimants and
other economically inactive people towards participation in the
formal labour marketwhere they are able to work. In practice,
UK policymakers have assisted various types of people into various
types of employment. Nevertheless, the overriding presumption
is that formal, paid work is the best possible outcomeas
the mantra "work for those who can, security for those who
cannot" makes clear.
4. At best, this is a coherent and ambitious
policy response for addressing the needs of low skilled, disconnected
individuals at the edge of the modern labour market. At worst,
however, it is a one-dimensional approach that misses the needs
of particular types of individuals and particular communities.
For certain groups of people and certain communities in the UK
are still proving difficult to "attach" to sustainable
work in today's labour market. Their exclusion is an enduring
and perplexing problem in an economy that can boast the highest
levels of employment since the early 1970s.
5. The success of welfare to work policy
since the mid 1990s has allowed a closer examination of the barriers
that continue to hold back individuals and communities from accessing
work. It now seems clear that the emphasis on greater supply side
interventions and the process of matching people to vacancies
has so far had less success with individuals from ethnic minorities,
the low skilled, older people (especially men)[1],
those on incapacity benefit (ICB) and lone parents, as well as
for those communities where such people are disproportionately
concentrated. Although many of these groups have recently had
specially adapted versions of the New Deal programme constructed
for them, it is too soon to quantify their success.
6. At the same time, these groups are operating
in substantially different local labour market conditions, with
varying levels of local labour demand. [2]Dickens,
Gregg and Wadsworth, for example, point out that although regional
unemployment differentials are lower than for many years, they
do not capture the real patterns of geographical divergence:
7. "The proportion of working age men
not in work varies from 13 per cent to 26 per cent across the
ten standard regions. At county levels this spread nearly doubles
from 8 per cent to 31 per cent. At finer levels of disaggregation
this dispersion is greater still, highlighting the plight of many
coastal towns and the former coal mining districts alongside major
urban areas . . . by far the worst geographical concentrations
of joblessness are in our social housing estates." [3]
8. The analysis of local unemployment and
regional job vacancy rates usually relies on the imposition of
Travel to Work Areasgeographical hinterlands within which
people might normally be expected to look for employment. However,
there appear to be two drawbacks to this approach. First, there
are "Travel to Work" areas where local unemployment
is persistently high (see table 1) and second, the areas may be
unrealistic descriptions of potential travel habits, particularly
where social housing estates are involved.
Table 1
TRAVEL TO WORK AREAS WITH EMPLOYMENT RATES
BELOW 70 PER CENT BY REGION, 1990-2000
Wales19 areas
| | North West3 areas
| |
eg Merthyr | 61 per cent
| eg Liverpool | 62 per cent
|
Aberystwyth | 62 per cent |
Wirral & Chester | 68 per cent
|
Northern Ireland9 areas |
| Yorks & Humber5 areas |
|
eg Strabane | 46 per cent
| eg Whitby | 58 per cent
|
Enniskillen | 60 per cent |
Sheffield/Rotherham | |
Scotland14 areas |
| Devon & Cornwall7 areas |
|
eg East Ayrshire | 64 per cent
| eg Newquay | 61 per cent
|
Glasgow | 65 per cent | Penwith & Scilly Isles
| 66 per cent |
North East8 areas |
| Seaside3 areas | |
eg Hartlepool | 62 per cent
| eg Clacton | 60 per cent
|
Middlesborough | 63 per cent
| Gt. Yarmouth | 69 per cent
|
Source: IPPR (2001) (from LFS Local Area Database) [4]
| |
| |
| |
9. In these areas and for these people, the fabric of
community infrastructure has been severely eroded. There are fewer
affordable transport services, fewer locally-based public services,
fewer childcare places, poorer housing conditions, the greatest
levels of health inequality and the lowest rates of economic activity.
Government research suggests a strong connection between lack
of transport, social exclusion, narrow horizons and economic activity.
[5]In this sense, it may
be that the psychological definitions of mobility are very different
to that suggested by using the travel to work area analysis. In
fact, it is likely that within these figures and on social housing
estates in particular the employment rates will be very much lower
and the practical mobility of unemployed and inactive individuals
much more restricted:
"Since 1997, unemployment has been reduced
in every region of the UK. Nevertheless, masked behind this overall
picture of falling regional inequality are localised pockets of
high unemployment and high deprivation. Most of these areas are
in inner cities, but some are seaside towns or former colliery
areas. Nearly all such areas face multiple disadvantages with
not only high unemployment, but also low employment, large numbers
of people dependent on benefits and often poor housing, health
and transport."
Labour Party National Policy Document[6]
Table 2
EMPLOYMENT CHANGE IN 12 TOWNS AND CITIES 1984-91 (DEPARTMENT
OF THE ENVIRONMENT 1996)
City/town | Inner areaschange in number of jobs
(per cent)
| Outer areaschange in number of jobs
(per cent)
|
Preston | ¸8 | 14
|
Plymouth | ¸7 | 29
|
Nottingham | 2.5 | 4
|
Coventry | ¸5 | 6.5
|
Bristol | 6 | 2
|
Sheffield | ¸6 | 1
|
Newcastle | ¸7 | 9
|
Manchester | ¸6 | 41
|
Liverpool | ¸12 | ¸9
|
Leeds | 6 | 7
|
Birmingham | ¸7 | 10
|
London | ¸8 | ¸2.5
|
10. Table 2 shows clearly the extent of employment change
in major UK towns which reveals high levels of net indigenous
job loss. Work has fled the inner cities to outer urban or to
new areas and has simply left many people and communities behind.
All of this leaves us with a clear but multi-faceted problem.
We have high pockets of joblessness where mobility is restricted
and where public services are fragmented. Communities and individuals
are becoming more marginalised and overall levels of prosperity
are making the problem more visible. Here, social capital[7]
has declined and the community infrastructures that often underpin
successful economic activity are fragmented. Where there are too
few jobs[8] there are inadequate
mechanisms for supporting job and business creation.
11. There is also an important political dimension to
this problem. There may indeed be sufficient jobs in or within
relatively easy reach of the majority of the UK"s towns and
cities. However, the perception that certain parts of the country
have been left out of the current economic boom remains strong.
In the event of a downturn, then it will be these areas that are
likely to suffer first. This is the labour market element of the
"heartland" problem. Civil servants may not be convinced
of the economic analysis of local jobs gaps, but the political
pull is likely to be different.
12. For people in these placesespecially those
in the vulnerable groups identified above"work for
those who can, security for those who cannot" does not apply
very well. Conventional patterns of paid employment (even part
time) may not fit with their caring responsibilities, particular
disabilities, or skill setsparticularly if they have been
out of work for many years. [9]As
Figure 1 below showsa consideration of the types of client
that one provider is currently working with on New Dealmany
such people face severe barriers in moving into conventional labour
market participation.
Figure 1 IN SEARCH OF WORK IN GLASGOW
More Able: 10 per cent
Eligible but have a good work record and/or educational background
In with a Chance: 30-40 per cent
Young people with few skills and low expectations
Older people who have been made redundant, and who cannot get
back in
Needing Care and Work: 40-60 per cent
People with learning difficulties/family responsibilities/alcohol
problems/drug problems/
anti-social behaviour
Source: Sinclair and Westwood (forthcoming). [10]
13. What does this mean for welfare and work?
In this context, the dominance of single size solutions make
little sense. Accepting this argument has large ramifications
for both the "welfare" and the "work" parts
of the welfare to work project. On the welfare side, it follows
that national welfare to work programmes such as New Deal should
be devolved to provide far greater local flexibility and discretion
along the lines of the Employment Zone and Action Team models.
These issues have already been widely aired and debated. The argument
is that "welfare", in this sense, should be about understanding
and meeting individual needs through a broad range of welfare
interventions, rather than forcing everyone through the same process.
The recent Green Paper "Towards Full Employment in a Modern
Society" goes most, if not all of the way by setting out
a range of measures to concentrate resources on particular places
and particular groups. [11]
14. It also follows that instead of a one-size-fits-all
approach, employment policymakers should be looking to extend
the range of "work" outcomes available. While the Government
puts the virtues of "work" front and centre, it seems
to retain a very narrow view of what that work is.
15. There are, though, voices from within and around
government who are beginning to push a broader concept of work:
"The challenge, however, is to provide a
wider definition of what employment means. Social democrats have
traditionally equated participation with the paid labour market.
Yet there is non-paid work that should be considered legitimate.
Caring, informal education and volunteering all enhance individual
wellbeing and are good for society. An active welfare state designed
to encourage people into work should recognise this. In its second
term, New Labour has to broaden the scope of its "welfare
to work" policies." Peter Mandelson[12]
16. This could be seen as softening existing labour market
policy. This would be premature. Such "softening" should
provide a much broader trigger to sustainable economic activity
than current welfare to work policyand as such, provide
a much more effective intervention for disadvantaged individuals
and communities.
17. UK policy is actually further down the broad road
than first appears. Self-employment, supported by a generous employment
credit, is an option in the New Deals for over 25 and over 50s
and typically focused on local types of service activity. Support
for moving lone parents into jobs as registered childminders is
a principal part of the government's Neighbourhood Nurseries Initiative,
creating local jobs and addressing low levels of available childcare
places in deprived communities. Using money from the European
Social Fund, the New Opportunities Fund and the Department for
Education and Skills, the scheme is designed to deliver a massive
increase in childcare places and to create both jobs and infrastructure.
In addition, the Children's Fundworth £450 millionwhilst
addressing older children at risk of social exclusion, simultaneously
promotes and funds a variety of activities. According to the DFES
announcement, these activities might include:
mentoring programmes, eg mentors talking to young
people at risk about crime, drugs or sexual health issues, often
based at local youth centres;
parental education and supportthis could
be delivered through parenting courses run by the voluntary sector,
or support work in the home;
befriending, counselling or advice servicesincluding
drop-in centres run by health services or voluntary organisations,
or local groups where lone parents or step parents can support
each other; and
projects to provide structured out of school activitiesfor
example, building on successful projects in high crime areas for
the children most at risk of offending. [13]
18. Creative interventions of this nature not only deliver
outcomes for the individuals involved but also trigger others'
economic activity, through enhanced childcare provision and through
the multiplier effect of basic economic activity. The creation
of additional social or community enterprises via welfare to work
should become an important objective for triggering improved levels
of both individual and community economic activity.
19. Work by the Cabinet Office Performance and Innovation
Unit on non-activity among older people[14]
is useful to revisit here. The Unit's report makes a number of
trenchant suggestions to increase social participation and community
capital. These include:
Ensuring Employment Service and Benefits Agency
staff understand and promote benefit claimants' opportunities
to do volunteer work; and allow staff to make small advance payments
to claimants to cover volunteers' expenses.
"Introducing pilots to explore new ways of
recognising and rewarding volunteering activity." Options
include (i) paying small stipends to volunteers; (ii) promoting
Local Economic Trading Schemes (LETS) and disregarding LETS earnings
in Job Seekers' Allowance (JSA) /Incapacity Benefit (ICB) claims;
(iii) consider setting up a national "community exchange
bank" based on the time banks idea, to be promoted through
interested New Deal Partnerships. [15]
20. The report points out that:
"In an age of air miles and loyalty points, a scheme
that emphasised the mutual benefit, to oneself and the community,
that can arise from unpaid activities might start to unlock wasted
potential . . ."
21. The paper illuminates the limited extent of broad
work outcomes currently on offer. Those claiming Incapacity Benefit
can currently move not just into paid employment, but also into
varying amounts of training, therapeutic work or community volunteering.
The New Deal for Lone Parents offers participants a number of
options for combining work, education and childcare. However,
few ICB claimants are aware of the choices they have; and such
notions of constructive participation are strictly limited to
these two groups. [16]
22. The role of local government subsidy in fostering
community enterprise is also important. In the 1980s a city council
contract for insulating Glasgow homes allowed the Wise Group to
begin to develop its Intermediate Labour Market model. More recently
local government contracts for leisure have been increasingly
awarded to not for profit mutual organisations such as Greenwich
Leisure and Groundwork. Social enterprises are increasingly a
model which can allow the combination of service delivery[17]
with local job opportunity, particularly in local areas where
service disintegration has been matched by high levels of aggregate
job loss.
23. The success of the Intermediate Labour Market concept
has been reflected in official policy circles with the announcement
of a series of "Transitional Employment" pilot programmes.
24. We need to go further. The Government's whole employment
policy programme has been about extending labour market choice
through individual empowerment. While the primary aim of employment
policy remains reattachment to the conventional labour market,
there is a clear case for allowing a much larger set of people
to mix and matchto a rather greater degreedifferent
forms of economic and social activity.
25. This flexibility would apply not just to routes taken
towards formal employment, but also to final destinations. These
could be regular employment, a combination of formal and informal
activities, or in a few cases, predominantly the latter:
"After a period of unemployment, the state
should offer its help not in the form of hand-outs but through
the guarantee of work. This is no airy-fairy idea. It has been
the system in Sweden for 40 years. Once people have been unemployed
for a year (or six months if under 25) the ES will be obliged
to find them at least two offers of reasonable full time work
. . . in some cases especially where unemployment is high it may
be impossible to find enough jobs with regular employers. In such
cases temporary jobs will be provided through job creation projects
run by public authorities or voluntary bodies. There is socially
useful work crying out to be done . . ." Richard Layard[18]
26. Richard Layard, usually more identifiable with the
"stick" of New Deal, is clear that there is a role for
this kind of approach, especially if linked to a formal job guarantee.
In practical terms this might be linked to work such as childcareconsidered
to be in deficit in high unemployment communitieseducation
and volunteering (classroom assistance, playgroup/nursery work,
time bank activity etc). This may also provide another method
of New Deal option delivery in the form of an intermediate labour
market or transitional employment process. As Geoff Mulgan states:
"for (those) that have either never worked or lost touch
with the labour market the priority may be a period of structured
work experience that serves as a stepping stone into the mainstream
labour market." [19]
27. So how could we broaden work? The next two sections
explore some promising ways forward already in operation.
28. Intermediate Labour Markets (ILMs) are a growing
labour market phenomenon in the UK. According to a recent study
by the Joseph Rowntree Trust, [20]there
were 5,300 ILM places on 65 programmes in 1999. These programmes
involved approximately 9,000 people per year and are clustered
in the big cities and older industrial areas of the North, Midlands
and Scotland. Activities include environmental work, childcare,
town centre guides, IT services, sports and community work. The
majority of places are for 18-25-year olds.
29. They are the growing expression of the view that
the best way to prepare people for work is to recreate as real
a work experience as possibleand if possible, to make this
"socially useful" work. First coined by the Wise Group[21]
in 1990, the concept of the Intermediate Labour Market is the
notion that there is a market for paid labour intermediate between
unemployment and full employmentwork which also delivers
benefits to disadvantaged individuals and communities. The first
Wise Group ILM project started by upgrading poor quality insulation
in Council homes in Glasgowclearly work with a social purpose,
both for individuals refamiliarising themselves with work and
for the recipients of the work itself. They now offer training
programmes as diverse as landscaping, home security, childcare
and catering. The concept has three broad benefits in this context:
It links the long-term unemployed to their communities
and the local economy through the provision of useful products
and services;
If well managed it should have a life span beyond
the duration of any particular funding regime;
It adds to the supply of jobs particularly where
there are weak local opportunities. [22]
30. The Seacroft Partnership in Leeds is another highly
successful ILM. It involves inputs from Leeds City Council, the
East Leeds Family Learning Centre, the Employment Service and
a group of local employers led by Tesco. Seacroft is an area of
Leeds with a high percentage of social housing and high levels
of unemployment and benefit receipt. Crucially, the area is four
or five miles away from the bustling regenerated heart of the
City and there is very little travel to work in the city centre
from Seacroft residents.
31. When Tesco announced that they were to open one of
their flagship "Extra" stores in Seacroft with the creation
of approximately 450 jobs, they knew that the majority of its
staff were likely to come from within a mile of the store. The
resulting partnership involved training of up to a year with guaranteed
jobs at the end. Existing ILM programmes in Leeds were used as
the model. Participants on this programme engaged in learning
and socially useful work that was relevant to real employment
outcomes. When the store opened in November 2000, over 200 unemployed
local people many of whom have been out of work for more than
two years were amongst its staff after following the programme.
Recent evidence from the scheme suggests that up to 10 per cent
of these participants have now been promoted to more senior and
better paid jobs[23].
Since Seacroft, Tesco have opened two further regeneration storesin
Durham and Glasgow with plans for a fourth in Beckton well under
way.
32. Local Economic Trading Schemes, or "time banking",
also represent a growing phenomenon in UK cities. Essentially,
individuals exchange time for services within the community. This
means that participants earn credits for doing jobs or providing
services: an hour of your time entitles you to an hour of someone
else's time. Credits are deposited centrally in a bank and withdrawn
when the participants need help themselves.
33. Proponents make grand claims for time banking, arguing
that the system recast both conventional value norms and social
relations:
"An hour of anyone's time is worth time credit, regardless
of the service provided. The message this sends to the socially
excluded and people who would normally be passive recipients of
services, is that their time is valuable, and their everyday skills
such as raising children and helping neighbours are needed. While
the market economy does not value these, they comprise the "social
economy" of family and community, and are the very activities
which are needed for sustainable community development."
[24]
34. In practice, time banks work in a number of different
ways. A Health Centre in Rushey Green is using time money to galvanise
patient self-help and support groups. In Watford, older people
are revitalising local services like waste recycling, local transport
and homework clubs for children using time money to unlock time,
knowledge and expertise.
35. In a speech earlier last year the then employment
minister Tessa Jowell made the importance of this community activity
clear:
"Community activity, whether through time banks, volunteering
or just trading childcare favours has the potential to develop
people's ability to learn, earn and to play as full a part in
society as possible. Just as we have improved incentives for paid
work, we would now like to develop incentives for forms of unpaid
work. Benefits of this activity should be sustainable beyond the
payback of time. We would like to make it possible to preserve
learning and paid/unpaid work experience outcomes and where possible
link this to our wider employment policies." [25]
36. These examples illustrate two things. Firstly, that
"socially useful" work can form an important transition
between inactivity and the formal labour market; and secondly,
that such an approach can also have benefits for restoring social
fabric in deprived communities. A third benefit may also be the
ability to translate such work into social enterprise business
start-ups, such as the Neighbourhood Childcare Initiative's attempt
to increase the number of registered childminders in such communities.
37. It would seem logical then to target particular communities
and socio-economic groups with a broader approach to both welfare
to work and to work itself. Widening the types of "work"
activity in such areas and with such people should also attempt
to address deficiencies in community infrastructure.
38. Our key argument is this: not only should policymakers
encourage social capital-building through the benefits system,
but also that all of these activitiesjobsearch, training,
formal and informal activitycan develop employability and
move people towards independence. We should widen our ideas of
"work" to this end.
39. Eligible groups for broad work programmes[26]
might include older workers; lone parents and parents of children
under 11; those with caring duties; those with recurrent/degenerative
conditions; long term ICB recipients; and those on social housing
estates or in areas of low labour demand. There might be others
who would qualify on the basis of a severe shortage of skills,
or persistent substance abuse/behavioural problems.
40. So why not simply set up more ILMs or time banking
projects? This might seem the obvious response. However, we believe
something much more ambitious is required: putting broad work
into practice means incorporating broad work principles into the
benefit system as a whole not simply establishing new waves
of pilots for single groups.
41. The benefits of Intermediate Labour Markets are well
established. [27]By contrast,
recent research shows that in practice, the operation and dynamics
of UK time banking is more complex than proponents suggest. [28]Members
tend to be highly skilled and less than representative of the
possible client groups discussed in this paper. Moreover, time
banks in action often seem to reinforce, rather than transform,
individuals' confidence, motivation and skill sets. At worst,
UK time banking seems to exploit existing social capital rather
than generating new forms of it, and in practice deteriorates
into "the translation of unequal relations"the
most assertive people coming out on top.
42. Both ILMs and time bank projects also tend to be
small scale. As a whole, the UK ILM sector currently has around
5,300 places in 65 programmes, involving just 9,000 people a year.
[29]There are 300 or
so time banks in the UK, but average levels of activity are usually
lowas few as four hours a month, twelve "trades"
a year, with an average annual per capita turnover of just £70.
[30]
43. To deal effectively with the problems of people and
place we have outlinedparticularly the numbers of people
affectedit is clear that much larger and more transparent
mass mechanisms are required. The wisest policy would take the
most successful elements of time banking and ILMs and incorporate
this into the mainstream welfare state.
44. We suggest that a mainstream broad work programme
be set up for the groups outlined above. Essentially, people in
these categories should be allowed to "patch" jobsearch
with combinations of socially constructive activityfor
example, learning and training, volunteering, community work,
occasional employment or therapeutic activity. The aim would be
to have clients eventually combining some paid, formal work and
informal, socially constructive activity. The latter would combine
individual and social benefitbuilding self-confidence,
social and interpersonal skills, and developing community capital
and networks.
45. Doing broad work would operate something like this.
After an initial employability and contingency assessment, Jobcentre
Plus clients would draw up participation plans with their Advisers.
These plans would set out the mix of training, jobsearch and informal
activity matching individual needs best. The understanding would
be that some clients would be able to move more easily and quickly
into paid, formal work than others. In a few cases, paid formal
work might stay a long term goal.
46. Parallel investment in community infrastructure should
be considered concurrently. Capital funding from the New Opportunities
Fund, European Structural Funds and other regeneration monies
should be prioritised and harnessed to the same ends.
47. To make these programmes work, benefit regulations
will have to change. The 16 hour rule governs the maximum amount
of time claimants can spend while still receiving benefit payments
and being counted as available for work. This rule will need scrapping
or revising greatly upwards. Benefit earnings disregards govern
the amount of money claimants can earn on top of benefit before
the latter starts to be withdrawn. These, too, will need revising
substantially upwards. This will allow claimants to make practical
choices about combining different types of formal and informal
activityparticularly as they will be compensated for both.
48. Alone, allowing people do undertake socially desirable
work will not be enough. A broad work programme should actively
encourage it. One way of doing this would be to use the Personal
Job Account mechanism (currently deployed in Employment Zones)
to combine benefits, training and money and a State stipend for
informal activity. A smarter solution, however, is to use the
time bank mechanism, paying people for informal constructive activity
in time credits, which could then be cashed out in a number of
useful ways. The benefits of this approach are explored in the
next section.
49. There is a strong equity case for making these changes
to policythe intuitive appeal of extending choice. But
such changes also score on efficiency grounds. At the human scale,
placing people into a range of sustainable positions now prevents
fallback later, and demonstrably meets individual needs better.
There are also significant community social and economic benefits
from recasting work, not least the likelihood of increasing the
amounts of money and time that will "stick" to local
areas.
50. In doing so, policymakers can encourage and make
attractive all kinds of desirable activities that the market alone
will fail to provide. One option is to use time banks and time
credits to "pay" people for volunteering and other community
work. [31]These credits
could then be cashed out in several waysconverted into
hard cash to be placed in an ISA; converted into Attachment Account
or an Individual Learning Account with funds to be spent on learning
and employability; or spent locally on a range of other time-funded
services, or in select local shops and services. At the very least
these types of activity should be disregarded in current benefit
rules and seen as a productive method of moving people closer
to sustainable economic futures. Credits would be contingency-based.
Within these categories, they could operate more or less like
existing government credits.
51. These ideas for improving social and economic conditions
can potentially help rebuild the social fabric of a community,
and improve its infrastructure through a local multiplier effect.
This new approach would further stimulate attitude change about
regenerating communitiesseeing them as new markets and
places of economic potential, rather than no-go areas. As Grogan
and Proscio point out, inner-city areas in particular have inherent
vibrancy and energy that when properly tapped, can attract consumers
and companies in drovesa new experience to counter the
failing allure of suburban shopping centres. [32]The
renaissance of East London and other urban centres across the
UKLiverpool, Manchester, Newcastle, Glasgowstand
as strong examples.
52. Research from the Brookings Institute in the US suggests
that poor areas lose up to 70 per cent of local expenditure as
they lack the employment structure to "keep the money in".
This is compared to an average of approximately 37 per cent for
average neighbourhoods. Smart policymakers are already making
these links. The Rockefeller Foundation are increasingly offering
start up funding to LETS schemes in inner city areas and with
disadvantaged groups. The US has a range of state "incubation"
or assistance programmes. In Australia the 1995 Social Security
Act disregards LETS income in benefit calculations, and new benefits
claimants are encouraged to join such schemes at the beginning
of their claims.
53. As described so far, the broad work proposals say
little about some of the other barriers to finding and keeping
work outlined earlier. In particular, allowing people to combine
different types of activity on the way towards the regular labour
market, whilst valuable in itself, does not seem to go far in
meeting the very different needs of the client groups described.
54. In fact, broad work can meet these needs, by allowing
people to spend their time in several ways. Broad work does not
simply enhance individual employability by improving education,
skills and so on. Over time, it also provides practical help in
holding onto a job, or maintaining desired combinations of activity.
Time money, for example, gives additional access to childcare,
emergency transport, household maintenance and other everyday
needsall of which normally require not just money, but
time commitment:
People who get jobs often lose them because of breakdowns
in their fragile support systems. Their child gets sick and can't
be sent to a child care provider; the child care provider gets
sick. The car breaks down. An emergency comes up. And the person
has no money to secure the back-up help needed so absenteeism
and job loss follow. If there was a Time Dollar Temp Agency available,
they could use Time Dollars to secure the kind of support needed
(at a price they could afford) . . . [33]
55. The notion of mutual support at work here is underpinned
by the same kind of reciprocity that characterises the relationship
between individuals and the state in existing welfare to work
policy. This though is a more horizontal mutualismone that
is developed and strengthened at community level.
56. Multiple equity mechanisms of this kind are essentially
paying people to participate in a range of constructive activities.
In this regard, they are little different from the Participation
Income programmes suggested by Tony Atkinson[34],
and more recently revived by Carey Oppenheim. [35]
57. A participation income, as defined by Oppenheim,
is:
A flat rate benefit paid to adults who are "participating",
ie working, retired, unable to work through disability, caring
for dependants, volunteering or unemployed.
58. Two different arguments are at work here. The kernel
of the broad work idea is to widen the idea of "work"
to allow benefit recipients to undertake a wider range of work-like
activities than employment policy currently allows. This in turn
should help to close the gap between economic activity and unemployment
by increasing individuals' job readiness and motivation and by
further incentivising particular types of socially useful work.
Participation income proponents, meanwhile, argue that while people
may obtain non-monetary benefits from work, paid employment alone
does not capture an attractive idea of social inclusion. [36]Work
is central to social inclusion, but not identical to it. To achieve
a truly inclusive society, therefore, a wider set of activities
than just work needs to be valued, supported and encouraged.
59. In the end, both policies take different routes to
the same destination. As we have seen, putting broad work into
practice implies that some clients will do little formal paid
work, while the informal activity they do undertake is seen as
socially desirable. Scale and scope aside, therefore, broad work
and participation income schemes are very similar and have many
of the same advantages.
60. Potential problems:
Proponents of broad work and participation income programmes
have to deal with a range of possible objections, both technical
and political.
61. Not everyone will approve of a welfare-to-work system
that does not put formal paid work absolutely front and centre.
Conversely, broad work schemes could be seen as unjustified use
of state power; government prescribes some activities as more
deserving than others, rewarding some and penalising the rest.
This is more or less what happens already with the New Deal and
its famous "no fifth option". But in that case, the
rationale seems very clearpaid work is good, anything else
is bad. Traditional welfare to work is primarily an economic policy
programme, with some positive social spin-offs achieved through
people being in work, and through people becoming more employable.
62. In multiple equity schemes, the division between
the social and the economic, and thus between good and bad activities,
is not so clear. Furthermore, while a good economic outcome is
easy to quantify, good social outcomes are often more murky. It
would be easy to find activities on the margin, which could be
argued to build social/economic capital for some, but might still
be considered negative by others. Putnam[37]
makes the distinction between "bridging" and "bonding"
social capital, arguing that the latter can sometimes be socially
destructive. This might be seen in activity that would strengthen
a particular sector of community (eg a minority faith-based organisation
or venture) but would be rejected by others.
63. The only way over this objection is for policymakers
to set very clear programme aims. They need to state why some
activities are "constructive"ie they have clear
individual and community benefits, and score highly on building
social, economic and employment capital. At the same time, they
will also need to take a view about whether one or many social
capitals should be encouragedie are multiple equity schemes
about allowing pluralistic communities to flourish, or about guiding
people towards narrow prescribed social/economic norms?
64. These are the classic hard choices of legend. In
practice, allowing people to choose their own forms of equity
accrual towards greater economic self dependency may prove most
effectiveespecially in areas and with particular socio-economic
groups where policies like New Deal have had least effect. The
key is to angle the activity to ensure that genuine social participation/employability
benefits result. We should consider how a wider definition of
work can 'broaden the funnel' and allow more people to move from
benefit dependency to sustainable economic activity, or at the
very least to a practical combination of the two.
65. There are also more technical objections to the policies
suggested in this paper. Both Broad Work and Participation Income
schemes reduce replacement ratios by rewarding activities other
than paid work. This may have the effect of keeping some people
further out of the labour market than they would be now. Given
that sustainable paid employment is the best route to economic
self-sufficiency, multiple equity schemes may increase choice
but also dependency on state support.
66. Of course, this point could equally be made about
current and future government policies, which have vastly increased
the scope of in-work benefits. Whatever the outcome of this argument,
however, for a government which prioritises formal economic activity,
seeing paid employment and good works as broadly one of a kind
may not be politically acceptable. This suggests a desirability
hierarchy may evolve, with paid work at the top and good works
ranked somewhere below it. Depending on the position of informal
activity within the scheme, this could end up as little better
than the status quo. It is important that a strong case for non-formal
work is made.
67. Participation income schemes need to be funded by
raising average marginal tax rates. Depending on the benefit level
set, tax rises could decrease incentives to work for the broader
population. [38]The more
ambitious the programme, the bigger this obstacle becomes. Broad
work schemes do not face this problem as such, because they use
alternative currencies. However, multiple equity schemes that
allow people to cash their credits in a variety of ways do represent
a real spending commitment for government.
68. For both types of programme, as for means-tested
systems, administrative and monitoring costs could also be substantial.
69. Conclusion: re-framing the social contract
There are two distinct ways to understand broad work programmes.
At one level, they represent a pragmatic response to "hard
to help people and hard to help places"the needs of
many inactive people now being moved towards work through Jobcentre
Plus; and the labour market conditions of many deprived communities.
70. At another level, broad work is a far more radical
proposal. It aims to recastfor the betterthe current
balance of rights and responsibilities between citizen and State,
through a broader understanding of social inclusion through participation,
not just paid employment.
71. Intuitively, this is a powerful story with a powerful
extra attractionmuch of it is being actively considered
by those closest to power. As so often happens, genuinely new
policy ideas can be quickly assembled from existing fragments
of activity and thinking. Our argument is partly that we need
to finish the job of innovating in employment policy; partly that
we need to fit together the two key narratives of work and community.
72. We are not advocating an alternative to work. Rather,
we are considering how best to widen the definition of work, in
order to trigger greater levels of individual and community developmentand
conventional economic activity. Our focus is on developing approaches
to welfare to work that can best achieve this, for those individuals
and communities that are proving the hardest to help. Indeed,
we explicitly recognise that solutions for both problems can and
should be combined. Individual development promotes community
development and vice-versa. Deprived communities are dominated
by people with chaotic lifestyles. Part of this chaos is caused
by a lack of infrastructure amidst such communities.
73. Community re-investment and the need to create sustainable
work opportunities in deprived areas and for people with limited
mobility should go hand in hand. Multiple equity programmes enable
this connectivity by operating as a kind of employment support
network; participants can use their time equity to purchasing
ongoing domestic and other support services which will allow them
to keep the jobs they find.
74. Social equity programmes of this kind represent a
substantial re-framing of the current social contract. Under New
Labour, the welfare state is becoming increasingly orientated
towards work, and welfare to work mechanisms are more widely spread
across the system. Welfare to work sets out a relationship between
the individual and the State based on a series of rights and responsibilities.
Unrealistic demands on either side make the system unworkable.
75. The current difficulty with "work for those
who can, security for those who cannot" is that it offers
everyone the same deal. The state now expects a much wider, more
heterogeneous group to seek work. Given the diversity of people's
needs and the places in which they tend to live, it's both unfair
and inefficient to narrow their options by prioritising orthodox
paid employment. As Jobcentre Plus begins operations, and the
sheer range of client and circumstances becomes apparent, the
case for rethinking work will become ever clearer and more urgent.
76. It is vital to address the disabling tension between
two of the Government's most powerful policy themeson the
importance of community and the need for labour market reform.
The latter seems to involve matching supply and demand by all
means necessary, moving people to work regardless of the effect
this might have on the communities they leave behind. The former,
meanwhile, focuses on exactly those communities and how to strengthen
their social and economic fabric. Ensuring stable and attractive
placesencouraging people to stayis seen as central
to making this happen. In the best traditions of joined-up policymaking,
broad work programmes offer a neat way to connect the two. Work
and community can sit more comfortably togetherboth in
Whitehall and in Labour's heartlands.
Andy Westwood
Head of Policy Research
Max Nathan
Researcher
11 April 2002
1
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22
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38
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