House of Commons - Work and Pensions

Select Committee on Work and Pensions Third Report

THE GOVERNMENT'S EMPLOYMENT STRATEGY

IV. Engagement in the 'WorkFirst' agenda: the Balance Between Opportunity and Obligation

85. The Government's Green Paper on employment strategy set out important goals aimed at increasing employment levels among disadvantaged groups and those who are economically inactive. For people not claiming Jobseeker's Allowance - largely lone parents on Income Support and those claiming Incapacity Benefit or Income Support on ill-health grounds - the strategy has meant the enhancement and expansion of the New Deal for Lone Parents and the New Deal for Disabled People. Unlike the New Deals aimed at Jobseeker's Allowance clients, the programmes on offer are voluntary. Participation by those targeted is not high: statistics indicate that just over a quarter of lone parents on Income Support required to attend a meeting with a Personal Adviser went on to participate in a New Deal for Lone Parents initial interview;[74] whilst in the New Deal for Disabled People pilots (recently extended nationally) the number of people who participated in an initial interview was only seven per cent of those invited.[75] This is disappointing, because participation does appear to help people get into work. In the case of lone parents, for example, more than two-fifths of those who participated found jobs and a tenth moved into education and training.[76] In the New Deal for Disabled People pilots, 26 per cent of all participants had found work, and 21 per cent had started an education or training course.[77]

86. How can so-called 'inactive' groups be encouraged to participate in the work programmes on offer, and should the Government be seeking to enforce its "work first" message by threatening penalties, as it does for participants in New Deal for Young People (NDYP) and New Deal 25 Plus (ND25+)? On our study visit to the United States, we had the opportunity to observe the US welfare system - limited in the main to lone parents - where the "work first" ethos is reinforced by an absolute federal time limit of five years on claiming welfare (though many states have baulked at actually implementing this federal time limit), and where participation in welfare to work programmes is obligatory, with the imposition of sanctions (extending to "full family sanctions" - the loss of all benefit for the family) - in some states if the lone parent does not comply. We reject the options of time limits on benefits and requiring lone parents to work as a condition of receiving benefit.

87. When talking to programme organisers in the US - including those who had originally been wary of the introduction of the tougher sanctions regime - it was interesting how many saw the existence and credibility of sanctions, and the belief of claimants in the willingness to use them, as crucial, for conveying the message that work and self-sufficiency were important.[78] In practice, we found in the US that few sanctions were applied,[79] when they were, it was often a minor sanction as a 'wake-up call'. Even the five-year limit on claiming welfare was not being enforced in the states we visited (Pennsylvania, Oregon and Washington). Yet at the same time there had been reductions in the numbers of lone parents on welfare during the five years of the new policy. It was suggested to us that the more stringent welfare regime introduced in the US had concentrated the minds of policy makers, leading to substantial public investment in work development childcare programmes, and of families on welfare who realised that staying on welfare indefinitely was not an option. The success of sanctions was, in effect, that they changed behaviour without having to be used in practice to any large extent.

88. A similar view was expressed to us by Mr Leigh Lewis, Chief Executive of Jobcentre Plus, when asked to comment on the system of sanctions which currently applies to New Deal programmes in the UK. Both the New Deal for Young People and the New Deal 25 Plus aimed at Jobseeker's Allowance (JSA) clients, require those eligible to participate in one of the options on offer with an escalating range of sanctions for non-participation rising to the loss of benefit for 26 weeks after a third offence. Mr Lewis commented:

89. The table below shows the number of New Deal sanctions imposed between January and March 2002.[81]

New Deal Sanctions	Jan-Mar 2002
Total number sanctioned for leaving voluntarily or for misconduct	3,125
Number on options at end quarter	19,714
Sanctioned as % of option numbers *	15.4%
Employer option	5.0%
Full-time education & training option	9.1%
Voluntary sector option	18.6%
Environment Task Force	31.8%

* Number on options at end January 2002

For those on the employer option, the statistics appear to bear out Mr Lewis to the extent that the use of sanctions has been relatively light. This may be in the context, as pointed out by the TUC, that the employer option is the most popular.[82] The figures do bear out the concerns expressed to us by the TUC that sanctions run the risk of being used disproportionately against people on the NDYP's least popular and least effective options in getting people jobs. Thus on the voluntary sector option, over three times as many trainees faced sanctions compared with those on the employer option and on the environment task force option, six times as many trainees faced sanctions. Yet these are the options, the TUC point out, which are most likely to be entered by those who are the hardest to help and with the most disadvantage.[83] The conclusion reached by the TUC was that "reliance on benefit sanctions tends to lower the quality of active labour market programmes. Denying the consumers of these programmes the right of "exit"without any compensating "voice" rights removes the most effective pressure on providers to run programmes that actually succeed at moving people into employment."[84]

90. We have concluded that the Government is right in steering away from requiring mandatory participation in New Deal programmes for groups receiving 'inactive' benefits.[85] Nevertheless, given the Government's aim of reducing unemployment levels among disadvantaged groups, it is important that people claiming benefits other than JSA are made aware of the considerable positive help and support available to assist them to get work. In the Committee's recent report on the ONE pilot projects, we endorsed the Government's use of compulsory work-focussed interviews for all new claimants of working age, including lone parents and those claiming Incapacity Benefit, to enable people who have been disconnected from the labour market to learn through a face-to-face meeting of the active help available to support them in getting a job.[86]

91. However, there is still a need to ensure that existing claimants and those likely to be on benefit for some time are kept in touch at intervals with help that is available. Since April 2001, all lone parents making a claim for Income Support, and with a youngest child aged 5 years and three months or more, are required to participate in an annual meeting with a Personal Adviser designed to discuss support available to assist moving towards work. We accept the need for attendance at such meetings to be mandatory, essentially as a recognition that Jobcentre Plus staff often have to overcome a degree of fear and suspicion regarding the work agenda, which can make claimants unwilling to attend voluntarily. Once the claimant attends, it is up to the Adviser to persuade the lone parent that Jobcentre Plus has something useful to offer.

92. In the case of Incapacity Benefit recipients and sick or disabled people on Income Support, new rules require new and repeat claimants in the new Jobcentre Plus areas to undergo a work-focussed interview at least every 36 months. However, these rules do not apply to existing claimants.[87] This is against a background where 60 per cent of existing Incapacity Benefit recipients have been claiming benefit for over three years, and 44.5 per cent for five years or more.[88] Many will be too ill to work. But the evidence from Mr Ian Charlesworth of the Shaw Trust was that there are many disabled people who are capable of work, and who, with the right encouragement and support, could sustain employment, who are being 'written off' by the statutory services:

In his view, people with disabilities were constantly being given a negative message about their ability to work: "I hear teachers, social workers, doctors, medical staff, persuading people that they cannot work. Maybe the motives are not bad, but they are constantly giving the wrong message".[90]

93. Jobcentre Plus thus faces a significant challenge in reaching people classed as incapable of work and persuading them that they do have a future in the labour market. In our report on the lessons from the ONE Pilots for Jobcentre Plus, one of our serious concerns was the failure of Personal Advisers in the pilots to engage with Incapacity Benefit clients.[91] In reply, the Government promised that "Jobcentre Plus will give greater priority to, and incentives for, engaging with Incapacity Benefit customers".[92] Measures referred to included improving the operation of 'capability reports' currently being piloted; strengthening joint working between Personal Advisers and Job Brokers delivering the NDDP; and a new 'points' system weighted to give higher priority to placing Incapacity Benefit claimants into jobs. However, if Jobcentre Plus is to engage positively with Incapacity Benefit clients in promoting the support it can make available in moving them closer to the labour market, it must first have face-to-face contact with them. At present, for many disabled people, considerable anxiety is attached to discussions with Jobcentre Plus about work because of the fear of withdrawal of benefit on the grounds that they are capable of working. One of the key tasks of Personal Advisers at a work-focussed interview with a person claiming Incapacity Benefit has to be to reassure them that exploring work options, including the acquisition of new skills, will not immediately lead to losing benefit.

94. We recommend that almost everyone receiving benefit on the grounds of incapacity for work should be provided with a face-to-face work-focussed interview at least once a year, when barriers to work could be explored and strategies discussed to overcome them. Recipients would be required to attend these annual interviews although some (such as those with severe disabilities for whom attendance should remain voluntary) would be subject to waiver or deferral where the interview would not be of assistance to, or appropriate for, an individual. We recommend that such interviews should be confidential, and independent of the Jobcentre Plus benefits administration system so that a client's willingness to consider work should not be used to trigger a fresh personal capability assessment which might lead to the withdrawal of benefit.

95. Whereas numbers claiming Jobseeker's Allowance have declined in recent years, over the period May 1995 to November 2001 the proportion of the working age population on incapacity benefits rose from 7.4 per cent to 8.4 per cent.[93] Mr David Webster of Glasgow City Council pointed out that the UK has the highest rate of working age sickness of all 15 European Union countries.[94] We are convinced, having listened to the evidence of Mr Charlesworth of the Shaw Trust, that urgent and sympathetic action is needed by the Government to address worklessness among sick and disabled people, too many of whom feel "written off" by society despite their desire to work. Much more needs to be done pro-actively to engage with people on incapacity benefits concerning the possibility of working and to offer them the support and training necessary to get into the labour market.

96. As recommended above, we believe that the New Deal needs to be re-designed to be more flexible and adapted to the circumstances of the individual. The evidence suggests the New Deal has been a success where it has focussed on work (e.g. the work option in the New Deal for Young People), been organised around the needs of the client (the New Deal for Lone Parents), and where it has devolved responsibility to individuals (Employment Zones and the initial encouraging signs from the Action Teams). Drawing on our experience from the Netherlands and the US, we recommend re-designing the New Deals around three principles:

- Soft skills, work placements, job-specific training and active job search for others; and

- Intensive personal help ("re-habilitation" in the jargon) for those with the most significant barriers - e.g. drug abuse, ex-offenders.

97. These principles are already present in the various New Deals. Where they are not, that part of the New Deal has normally been less successful, for example, in the environment and voluntary work options of NDYP. They are also present in the new initiatives the Government is taking, such as StepUp and Progress2Work. We recommend that they should become the principles guiding the New Deal overall, with advisers given the budgets and powers to apply those principles according to the circumstances of their clients and their locality. National benefit entitlement rules would continue to apply and Jobcentre Plus offices would be held accountable through monitoring outcomes rather than as now through centrally set options and programme rules.

74 New Deal for Lone Parents statistics, March 2002, see www.dwp.gov.uk/asd/statistics. Back

75 Evaluation of the New Deal for Disabled People Personal Adviser pilot, DSS Research Report No 144. Back

76 New Deal for Lone Parents statistics, March 2002, see www.dwp.gov.uk/asd/statistics. Back

77 Evaluation of the New Deal for Disabled People Personal Adviser pilot, DSS Research Report No 144. Back

78 See US visit note, Annex 2. Back

79 See US visit note, Annex 2. Back

80 Q. 339. Back

81 Working Brief, July 2002. Back

82 TUC, Ev 83: a survey of 6000 participants of the New Deal for Young People found that nearly two thirds believed that the New Deal was very or fairly useful and nearly half were completely or very satisfied with their Personal Advisers. Back

83 TUC Ev 103. Back

84 TUC Ev 103. Back

85 By 'inactive' benefits, we mean benefits paid to people of working age where they are not required, as a condition of receiving benefit, actively to seek work. Back