Select Committee on Work and Pensions Fourth Report


52. NDDP was rolled out nationally from July 2001 and is the main employment programme open to people on incapacity benefits.[43] It is voluntary and participants can opt for a 'gateway interview' or those who are keen to seek work can access a network of job brokers from the public, private or voluntary sectors to help them into work. Since July 2001 around 28,000 people have joined NDDP and 6,000 have found a job.

53. One of the main criticisms of NDDP is that is it severely under resourced and that the budget does not reflect the size of the task to be achieved. There are less than a million JSA claimants and around 850,000 lone parents on benefit, compared with 2.7 million incapacity benefits claimants. The total budget for NDDP from 1997­2002 was £45 million compared with £139 million for NDLP, £486 million for ND25+ and £1,347 million for NDYP. The planned spend for 2002­3 is £58 million for NDDP, £142 million for NDLP, £303 million for ND25+ and £354 million for NDYP.[44]

54. The funding for New Deal for Disabled People is not in proportion to the numbers of people targetted and does not reflect the level of support required by participants. The Committee agrees with evidence from a range of organisations calling for an increase in the funding allocation of NDDP in relation to the other New Deal programmes.

Encouraging participation

55. As with any voluntary employment programme, the key to success is getting people involved in the first place. The NDDP Personal Adviser pilots only managed to achieve a 3 per cent success rate in terms of getting people to take up the offer of a Personal Adviser interview.[45] On a more positive note, the job entry rate for NDDP is good - more than a fifth of those who have joined NDDP have moved into work.

56. The TUC argue that ignorance is an obstacle to participation in NDDP, which, it says, must be more widely publicised.[46] The Shaw Trust also criticises the Government for not allocating a large enough budget for marketing, particularly in light of the fact that NDDP is a voluntary scheme.

57. Getting inactive people to participate in a non­compulsory work programme can be problematic. We believe that a payment at the beginning of a contract with New Deal for Disabled People job brokers should be made to assist with local marketing. We believe New Deal for Disabled People should remain voluntary.

Distance from the labour market and skills development

   58. The Wise Group's experience as NDDP job brokers suggests that voluntary self­referral customers are highly motivated but may still have significant support needs. The Wise Group also believes that there is a substantial number of disabled people who are not coming forward but who might be more able to work. These people would benefit from sustained work­based intervention to increase skills and self­confidence and to put them back in touch with the labour market. Joanne Hindle of UnumProvident[47] reinforced this point and argued that those who have been on benefit for several years and were out of touch with the labour market need a more creative approach to get them back into work than those who were coming onto IB after being in the workforce.

59. The under-resourcing of NDDP is complicated by the fact that many disabled people are a considerable distance from the labour market and require intense and prolonged support before they are 'job ready'. This leads to what RNID called "creaming", whereby job brokers choose to help those closest to the labour market as they are cheaper to support. This reinforces the finding in the NDDP evaluation that outcome related funding leads to a focus on clients who are perceived as being easier to help into work.[48] Papworth Trust[49] also argue that the pool of eligible and work-ready disabled people is much smaller than originally expected, which means that job brokers need to expend more resources on helping those further from the labour market.

60. More attention should be given to encouraging people with disabilities to consider self-employment as the most appropriate and flexible route back into work. This may be the best solution for someone with a variable health condition or with mental health problems.

61. The Committee recommends that more resources should be channelled into helping those disabled people who are further from the labour market by the use of 'soft skills' enhancement and helping those with greater support needs. In our report on the ONE pilots and in the Employment Strategy report, the Committee recommended that the Government should review the use of targets dependent on job outcomes and develop targets based upon 'distance travelled'. We are pleased that these recommendations have been taken on board and look forward to hearing how these measures will be implemented.

NDDP funding structure

   62. There are currently 60 job brokers delivering NDDP. Job brokers are paid on a job outcomes basis with a further focus on sustained employment. Contractors receive a small payment (£100) for each client registered, a payment of up to 50 per cent of the total amount payable when the client starts work and the remaining total if the client remains in work for more than six months. The latter two payments can be up to several thousand pounds.

   63. There is strong criticism, particularly from the voluntary sector organisations who are delivering NDDP, that the funding mechanism for NDDP contractors is flawed and potentially damaging to the contracted organisations as it places a significant amount of financial risk onto providers. Organisations such as Scope, Papworth Trust and the Shaw Trust argue that the payment structure has placed a large financial burden on contractors. As Mr Hawkins of Scope said, "The provider of service is taking a very large risk, simply because of the nature of the funding. You get very little for meeting people, working out what they want, and trying to provide that support; you get approximately half of your money when they get a job, and you get the other half when they still have that job six months later, which can be problematical. So you are taking all the risk, doing all of the work, and if it does not, for the best of reasons, work out, you have no money." This results in providers excluding disabled people with more challenging support needs in order to keep down costs and reduce the risk of the person not finding work. Alternatively, providers provide the additional support at their own cost.

64. NDDP is criticised for predominantly helping those who are closest to the labour market. Ms Simkiss of the RNIB said "I think this raises the issue again of how we can support the people who need the most intensive help. They are going to cost more money, and at the moment NDDP does not really meet their needs because it is so output-focussed in terms of funding."

   65. Papworth Trust also criticises the funding structure for reducing the payment by 50 per cent when people enter part-time work. They point out that those entering part-time work still require the same level of support and that part-time work may actually be more viable for disabled people moving into work. This highlights the point that, for many disabled people, a move into part-time work may be as far as they get along the work continuum. Papworth Trust therefore suggests increasing the payment for entering part-time work to 75 per cent.[50]

   66. The Committee recommends three changes to the funding structure of NDDP. First, the initial payment at registration of clients should be increased from £100 to £500 in acknowledgement of the costs of work preparation. Second, the funding structure which penalises contractors when clients move into part-time rather than full-time work should be reformed to recognise that finding, and retaining, part-time work is a big achievement for many disabled people, which involves just as great an amount of resourcing by the broker as moving them into full-time work. Third, we believe Jobcentre Plus offices should have a discretionary budget to provide rehabilitation services for claimants who have been on incapacity-related benefits, or economically inactive through illness or disability but not claiming benefits. This would not be funded according to job outcomes. We recommend that this approach be piloted in the areas of the country with high Incapacity Benefit levels, in particular those which suffered economic dislocation from the closure of mining and shipbuilding businesses, as highlighted in paragraphs 20 and 21.

Private and voluntary sector involvement

67. Written and oral evidence generally agreed that employment projects should be focussed on individual needs. However, there is still a need for more specialised support from disability-specific organisations, particularly those in the voluntary sector.

68. The Committee heard evidence from some organisations calling for the separation of benefits administration from employment initiatives ­ essentially reverting back to the pre­Jobcentre Plus model. The Shaw Trust believed that it is off­putting for disabled people to talk about benefits in the same environment as employment. Having listened to their arguments, the Committee believes that the Jobcentre Plus model is the most effective administrative format and that any separation would be a step backwards.

43   Department for Work and Pensions, Pathways to Work: Helping people into employment, CM 5690, November 2002, page 21 Back

44   HC Deb, 9 December 2002, col 140w Back

45   Julia Loumidis et al (2001)Evaluation of the New Deal for Disabled People Personal Adviser Service Pilot, DWP Research Report No 144, Leeds: CDS Back

46   Ev 114, paras 8.4 - 8.6 Back

47   Q 114 Back

48   Julia Loumidis et al (2001) op cit Back

49   Appendix 33 Back

50   Appendix 32, para 4.6 Back

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