House of Commons - Public Accounts

Select Committee on Public Accounts Tenth Report

2 THE IMPACT OF LABOUR MARKET PROGRAMMES TO ASSIST OLDER PEOPLE

8. 7. In intervening in the labour market, the Department seeks to strike a balance between offering people early help and not assisting those who would find work anyway.[8] Jobcentre Plus and its contractors deliver programmes to improve the employability of working age people, including those aged over 50. These include New Deal programmes to help jobseekers into work through information, advice and support, and Work Based Learning for Adults, the Government's main training programme for adults.

9. 8. New Deal 50 Plus is the Government's main employment initiative to help return to work people aged 50 and over who have been without a job for six months or more.[9] The programme is voluntary and has three main elements: access to a Personal Adviser, who provides one-to-one guidance about finding work, an in-work financial incentive and an in-work training grant. By September 2004, the programme had helped an estimated 158,000 older people into work at a cost of £250 million.

10. 9. Compared with other New Deal programmes, performance data for this programme is limited, and a full economic evaluation of its effectiveness in increasing employment among older people has not been undertaken. The Department said that it had focused its evaluation efforts on what makes the programme work and what people thought of the programme.[10] Consequently, it has limited knowledge of how many might have found work anyway, without the programme's assistance.[11] The Department accepted that awareness of the New Deal 50 Plus was low, believing this was probably due to its voluntary nature. Increased emphasis is being given to this client group.[12]

11. 10. In 2003, the in-work financial incentive under New Deal 50 Plus changed from an Employment Credit to a payment made as part of the Working Tax Credit. The Employment Credit had been paid directly to the individual and was highly visible, whereas the Tax Credit is made in arrears by an adjustment to pay packets and based on household not individual income. Data on the take up of the Tax Credit is not available because secondary legislation has not yet been introduced to allow the Department for Work and Pensions access to this data for the purpose of evaluating employment programmes. However, anecdotal evidence suggests that this change has had a detrimental effect on participation in the programme.[13]

12. 11. Local labour markets and the skills needs of local employers vary across the country. The barriers to employment faced by older people also differ from one individual to the next. However, Jobcentre Plus staff, customers and third parties interviewed for the National Audit Office's Report all felt that services for older people, in particular New Deal 50 Plus, were still too inflexible to meet the needs of all customers.[14] Specifically cited were the lack of access to help under New Deal 50 Plus until customers have been out of work, and in receipt of a qualifying benefit, for at least six months, and the lack of sufficient opportunity or resources to refer customers to specialist providers to address specific needs. In recognition of these differences, Jobcentre Plus is moving towards more varied provision of local services. The Department believes that proposals set out in Building on New Deal, which will be piloted from 2005, should help address these issues.[15] Under the proposals, advisers will be able to choose from a range of services such as job-search assistance, help to improve motivation or employability skills, and skills training appropriate to the needs of the local labour market. Services will be available immediately to everyone on benefits, except those on Jobseeker's Allowance, who generally will be not eligible for the first six months of a claim. There will be local discretion to offer help earlier. Figure 4 summarises some of the key elements of support that older people say they require.

Figure 4: To help them find and remain in work many over-50s say they need:

13. 12. Since 1979, the number of working age people on incapacity benefits has nearly quadrupled and currently some 1.3 million people aged between 50 and 64 are on these benefits. The Department argued this growth was part of an international trend in advanced societies. Around 90% of people on the benefit expect to return to work, but currently almost half of claimants have been on the benefit for at least five years. Around 85% of the increase occurred before the mid-1990s, and, since then annual inflows have fallen by around 30% and growth in numbers has slowed significantly.[16] The Department attributed this to a tightening of the 'gateway' to the benefit from the mid-1990s.[17] However, the figure for those claiming incapacity benefits is still around twice as high as in the late 1980s, at a time when the general health of the nation has improved, underlining the importance of a proactive approach to helping those who are capable of work back into a job. We are alarmed by this very serious situation. There has not been, nor on current trends does there seem likely to be, any significant fall in the number claiming incapacity benefit.

14. 13. The Department recognise that in the past little support had been provided to help people on these benefits to return to work and attempts to reduce the stock of claimants had had limited success.[18] The Department also consider that the name Incapacity Benefit is too negative and is a by-product of a system that has focused too much on what people cannot do, rather than what they can.[19] For those with the most severe conditions, work is often unlikely to be possible. For others, however, the Department considers work is possible with the right support and encouragement.[20] Since our hearing, it has announced proposals to reform Incapacity Benefit, distinguishing between those with potentially more manageable conditions and those with the most severe health conditions or impairments.[21]

15. 14. To try to identify new ways of helping people off incapacity benefits, the Department are currently trialling "Pathways to work" pilots in a number of Jobcentre Plus districts. Measures include: Personal Adviser support with a new work-focused interview regime, a return-to-work Credit and access to rehabilitation services provided jointly by the NHS and Jobcentre Plus. The Department reports that preliminary evidence from the pilots is encouraging but it will not complete its evaluation of the pilots until 2006. Currently, the Department has not secured the resources to roll out the pilots right across the organisation, even if they are successful.[22]

16. 15. The Department acknowledges that although it has had success in helping disadvantaged groups into employment, some of this may be due to placing those easiest to help.[23] Many of those left have multiple disadvantages and are furthest away from finding work. Jobcentre Plus has top level targets for placing people into work that reflect the priority attached to helping different client groups into work. The targets are intended to acknowledge the extra effort involved in helping clients requiring more support to find work. However, Jobcentre Plus has no top level targets to measure improvements in the employability of those people who have made progress but not found work, although it does have a number of key management indicators in this area. Creating a way of measuring progression may not be simple, but a number of models exist in the United Kingdom, the United States, and Europe from which a system could be drawn.[24]

17. 16. Personal Advisers are available through all New Deal programmes and Pathways to Work pilots. They assess the needs of disadvantaged clients, provide advice, and where possible guide them into work. Jobcentre Plus currently employs around 10,000 Personal Advisers.[25] The Department for Work and Pensions - which employs staff in a wide range of activities[26] - is currently undertaking a major job restructuring exercise to reduce the number of staff by 30,000 by 2008. Although at the time of the Committee hearing, the Department had not finalised its plans, which will bring its overall staff numbers to 100,000, it did expect the number of Personal Advisers to be around the same number following the exercise, which was designed to lead, for example, to better processing of benefits and streamlining of overheads.[27]

18. 17. The National Audit Office found that, at local level, Jobcentre Plus and the Learning and Skills Council often have different objectives and priorities, even though they both provide services for older people with the common aim of improving employability.[28] They also often contract independently and in different ways, with the same local service providers, which is wasteful. Closer working is underway with the development of local co-ordinated service delivery plans by Jobcentre Plus offices and local Learning and Skills Councils, and the establishment of a joint working group at official level to take forward contracting issues.[29]

8 Qq 2-3 Back

9 C&AG's Report, paras 2.14-2.20 Back

10 Q 18 Back

11 C&AG's Report, paras 2.15-2.19; Qq 17-19 Back

12 Q 55 Back

13 C&AG's Report, paras 2.19-2.20 and Figure 22; Qq 33-35 Back

14 C&AG's Report, paras 3.22-3.27 Back

15 Q 4 Back

16 C&AG's Report, paras 1.6, 2.26-2.27 and Figure 15; Qq 6, 118-119 Back

17 Q 119 Back

18 Qq 5, 75; C&AG's Report, para 2.27 Back

19 Qq 193-194, 204 Back