Select Committee on Work and Pensions Written Evidence


Memorandum submitted by Reed in Partnership

INTRODUCTION AND EXECUTIVE SUMMARY

  Reed in Partnership is a Public Limited Company dedicated to the ideals of Social Inclusion and helping to regenerate the most disadvantaged communities in the UK We have been at the forefront of welfare-to-work in the UK since our inception in 1998, when we became the first private sector led company to deliver New Deal. Since then, we have operated large-scale programmes and targeted local initiatives across the UK We work with Jobcentre Plus, local authorities, Learning and Skills Councils and over 200 local and national partners in the voluntary, public and private sectors. Our mission is to become the partner of choice for developing people and their communities. We welcome this opportunity to provide a written response to the Select Committee inquiry into the reform of incapacity benefits and Pathways to Work.

  Key points in our submission are:

    —    Pathways to Work remains unproven as a best value solution for assisting the flow of new IB recipients back into employment.

    —    The Pathways to Work approach could be part of a package of solutions capable of assisting IB clients from within the stock of longer term IB recipients.

    —    There is no "benefit" to being incapacitated and we welcome any approach that changes the name of the allowance to something that focuses recipients upon getting better and back to work. We believe that greater numbers have the potential to fulfil productive lives than either the current system or indeed potentially the future system anticipates.

    —    The independent sector (both private and voluntary) has not been sufficiently engaged in the pilots resulting in inadequate testing of best value and innovation relative to assisting the client group.

    —    Given current financial limitations we do not believe that Pathways to Work should be rolled out nationally; and that a Pathways focused on sections of the stock of IB clients should remain focused on the 30 Districts with the highest levels of IB claimant.

    —    Solutions based around the Action Team model can deliver significant outcomes for IB clients at a cost significantly lower than the Pathways to Work model.

  We have endeavoured to answer all points raised for response in the inquiry either based on our knowledge of delivery or from our interpretation of available research.

  On reviewing our written evidence, if we can further assist the Committee with their inquiry we would welcome the opportunity to give oral evidence.

REFORMS OF INCAPACITY BENEFIT

What lessons can be learned from Pathways to Work pilots in shaping the direction of the reform of incapacity benefits

  The Pathways to Work pilots are still in their infancy and preliminary research is confined to a small sample. At present, it is difficult to come to any concrete conclusions about the success of Pathways to Work. Using initial research material from the Pathways to Work pilots and from our own experiences in delivering Welfare to Work contracts across the UK where we have specific experience in engaging IB recipients through delivering two Working Neighbourhood Pilots (Gorbals and Tower Hamlets) and 12 Action Team for Jobs contracts. We believe that:

    —    Initial results show that the majority of clients currently being engaged through Pathways are closer to the labour market and more likely to possess the desire to work and the pre-requisite skills set needed to adjust to a working environment.

    —    Research by DWP also illustrated, via a sample of participants in the IB pilots, "little evidence that the pilot was changing negative attitudes towards work among some IB recipients".

    —    A Pathways to Work "type" approach needs to engage long-term IB recipients rather than focusing on the flow on to IB with whom more cost effective solutions can be deployed. Over the last seven years IB has risen only by 200,000 (from May 1998-July 2005).[27] We therefore know that the majority of IB recipients have been in receipt of IB for over seven years and it is with sections of this group that Pathways would add greater value.

  Therefore the main lesson that can be learned from Pathways to Work pilots in shaping the direction of the reform of IB is that a work focused approach to assisting recipients overcome their barriers and achieve enhanced health (as well as wealth) benefits through returning to work must lie at the heart of the reforms. At this stage however there are significant question marks over issues relating to the targeted client group and the related value for money to the public purse of the Pathways approach when compared to other Welfare to Work initiatives that can address the issues of assisting IB claimants back into employment.

What are the Implications of DWP's proposals for the new structure of incapacity benefits? Do they address the complications inherent in the existing incapacity benefit system? Is a dual benefit the right approach? Could it be improved?

  It is our view that any changes to the new structure of Incapacity Benefit should be kept as simple as possible. We believe that there is indeed a need for a dual benefit approach that ensures continued assistance for those who quite simply will never be able to work. We strongly support the ethos of Jobcentre Plus that emphasises work for those who can and support for those who cannot. Where we may differ is in the fact that we genuinely believe that if you focus on an individuals creative talents rather than exclusively on their barriers far more people are capable of work than the current—and potentially the future—proposals for Incapacity Benefit recognise.

  We welcome any approach that simply changes the name of the benefit for the vast majority as quite simply there is no "benefit" to being incapacitated and any approach that emphasises that recipients are on a "Rehabilitation Allowance" is a positive step forward in reinforcing the fact that we believe people can get better and fulfil productive lives.

  If we are to ensure that as many people are given the opportunity to re-enter employment and make positive life changes over time then the dual system should initially ensure that only the 10% of IB claimants on Severe Disablement Allowance are placed on the new Incapacity Benefit with all others initially placed on to the "Rehabilitation Allowance". It is essential thereafter to ensure that the process of placing people on to Rehabilitation Allowance is as simple and transparent as possible and does not result in some of the current process issues around the way in which IB is calculated and awarded and the inherent inefficiencies that exist in that process.

Will the reforms help to improve incentives for sick and disabled people?

  The overall emphasis of the reforms will generally help clients wishing to be engaged and looking for support and assistance in re-entering the labour market. However, simply changing the type of "allowance" paid to recipients will in itself not be enough. Minor adaptations to the range of existing welfare to work provision can, in conjunction with the benefit reforms, greatly improve the prospects and incentives for sick and disabled people.

  The initial remit for Pathways is to introduce IB reforms to new claimants only. This will exclude the majority long-term IB recipients therefore the effectiveness of Pathways could be limited in the short-term. We are concerned about this on two levels.

  Firstly we believe that for new claimants there are far more cost effective ways of assisting them to overcome their issues and re-enter the labour market. Over the past year we have focused greater energy on to addressing the needs of IB claimants through our Action Team contracts and during this period have increased the number engaged and re-entering employment by 100%. We are convinced that the Action Team approach for all new claimants will deliver far greater and more cost effective results than Pathways to Work. The Action Team approach delivers intensive outreach combined with close links to community organisations, has strong employer links and intensive personal adviser support for participants. This approach works for IB claimant participants at a cost to the public purse of around £2,000 per placement as opposed to the more expensive Pathways option that at very best estimates exceeds £3,000 per placement, with some anecdotal evidence of significantly higher cost per placement via Pathways.

  We do however, believe that the Pathways to Work approach has the potential to deliver positive outcomes for some clients among the longer term IB recipient group and it is this group that Pathways to Work should focus on.

   For those seeking help back in to work the financial package of assistance designed to encourage re-entry to the labour market is welcomed. The Return to Work Credit will allow clients the opportunity to make the long-term transition from benefits to employment. In addition, the Advisers Discretionary Fund, available to Personal Advisers will help to alleviate initial financial costs by assisting with interview costs and short job focussed training. Our one concern with this approach is the likelihood of participants returning to some form of benefit at the end of the one-year period during which they receive the Return to Work Credit. It is our view that this financial resource could be utilised more effectively if it were available in a more flexible manner, in particular in assisting participants to overcome debt issues that often exist during the transition from worklessness to work. Greater flexibility in the use of this resource would enable more tailored solutions for the individual.

  Our experience of working with economically inactive clients (primarily those in receipt of IB in the Gorbals and Tower Hamlets) has shown that financial incentives alone are not sufficient to empower and enable people to re-enter the labour market. Our research and experience has shown that the one to one support and interventions our Occupational Psychologist and Personal Advisers provide is of equal importance.

Is it possible to distinguish between those who are able to return to work and those who cannot?

  Yes, as previously stated our concern is that too often people are assumed not capable of work when they are both capable and willing, if their barriers are addressed and their positive talents are developed. Our experience in delivering a diverse portfolio of Welfare to Work Initiatives across the UK has clearly shown that it is possible to differentiate between clients who are able to return to the labour market, those who cannot, and those who are not yet ready to do so—but can start the journey towards employment.

  Reed in Partnership has developed an employability needs questionnaire designed by our lead in house Occupational Psychologist (OP), David Carew. The employability template is based upon a framework successfully developed by the Finnish government. The employability questionnaire equips our Personal Advisers (PA) with the methodology needed to make informed decisions about the barriers clients face and perceive. The questionnaire combined with OP and PA support enables clients to identify and overcome barriers far more quickly than traditional interventions and can ensure that our teams are working effectively with those who can work, those who need additional support and indeed to recognise those who cannot work.

  Many clients we encounter often feel disenfranchised by the present system for a variety of different reasons. The most predominant one being a mistrust of mainstream agencies that is normally confounded by a bad experience, suspicion of motive and general stigmatisation.

  Our engagement activity is underpinned by a process, which involves one to one interventions and personal support to develop soft skills that enhance the client's employability. Our OP works in tandem with a designated Personal Adviser to prepare a Personal Development Plan that incorporates the support mechanisms and specialist assistance the client needs to commence the journey back in to the labour market. The one to one OP interventions include elements of Cognitive Behavioural Therapy to determine the client's own personal barriers. This support will be continuous and dependent upon the clients own circumstances.

What are the Implications of the Reforms on Levels of Fraud and Error?

  Simplification of the current system will reduce fraud and error although it is to early to say if the proposed system will effectively achieve this.

Will the Reforms Address the Main Areas of Concern with the Current System?

  At present the system is generally perceived as bureaucratic, cumbersome and time consuming. The new system will need to address this perception. The reforms should help to introduce an employability framework that will help differentiate those who can work from those who cannot.

  The new reforms will need to introduce a decision-making process that is efficient and straightforward. The proposed "holding benefit" awarded until the client satisfies the criteria, in the Personal Capability Assessment Test, is expected to normally occur within a 12 week time period. After speaking to our network of health practitioners in the voluntary sector we feel this timescale would be very ambitious and concerns lie within the decision making process. In our experience, providing the correct diagnosis in the first instance is crucial. Our belief is that the decision making process could be more inclusive of wider healthcare professionals.

  However if the vast majority of new claimants are placed on to a "Rehabilitation Allowance" with a mandatory work focused activity programme much of the previous bureaucracy can be overcome.

THE FUTURE ROLLOUT OF PATHWAYS TO WORK

How Successful have the Pathways to Work Pilots been? Does the Current Design need to be Adapted for National Rollout?

  Firstly it is our view that Pathways to Work should not be rolled out nationally. All evidence shows that there is a clear geography of unemployment based around IB in the UK and it is our view that Pathways to Work Resources should be focused on those areas of greatest need, and primarily amongst the stock of IB claimants.

  It is clear that where sufficient jobs exist in a local economy that levels of IB recipients is very low (ie Hampshire, Berks, Suffolk and Surrey all have IB claimant levels at or below 2.5% of working age population), yet in the old industrial heartlands, almost exclusively in the North East, North West, Yorkshire and Humber, Wales and Scotland lie the top 30 Districts with IB levels ranging from 11.9% to 20.5% of the working age population. We are convinced that Pathways to Work activity should focus on these areas to ensure the most effective use of resources from the public purse. Incorporating Pathways to Work elements such as Condition Management Programmes into Building on New Deal (BoND) type activity in other areas of the UK would ensure that lead provider organisations tailor solutions to meet the needs of individuals on a "Rehabilitation Allowance", who should be eligible for participation in BoND type programmes.

  Figures released by DWP from the Destination of Benefit Leavers showed that the national Incapacity Benefit Return to Work figures was 52% compared to 56% for Pathways to Work areas. This initial evidence shows a small marginal increase of 4% in the overall rate of employment through Pathways. It is difficult to gauge therefore whether the main aspects of Pathways to Work have made the difference or whether simply the mandating of clients and pre vocational/motivational support provided in addition to or via NDDP Job brokers etc are responsible for the improvements.

What are the Implications of a Rollout of Pathways to Work on a new System of Incapacity Benefit?

  We are convinced that a new system of incapacity benefit and work focused provision such as Pathways to Work are inextricably linked, however we are not yet convinced that Pathways is or indeed should be the only answer to the work focused element of reform. We remain convinced that Pathways has a role to play, however this should be in addition to mandatory and voluntary programmes for new recipients and the stock of IB claimants based around the Action Team model of engagement with OP support. Given the current financial constraints on government spending we do not believe that it is possible to roll out Pathways to Work nationally as the only work focused proposition for claimants of the new system of incapacity benefit.

  We believe that the private and voluntary sector can play a pivotal role in the delivery of Pathways by helping to facilitate a number of services on behalf of Jobcentre Plus and use our established network of partners to increase the overall performance delivery but more importantly the independent sector can deliver more cost effective solutions beyond Pathways for the client group.

THE EXPERIENCE OF SICK AND DISABLED PEOPLE

Including: the Experience of Those who have Taken part in Different Aspects of the Pathways to Work Pilots; Barriers in Accessing Support Offered Through Pathways; Awareness of the Support Available; and Views on Further Reform

  It is regrettable that the independent sector (both voluntary and private) has not been more directly involved in the delivery of Pathways to Work pilots and it is therefore difficult for us to comment. Additionally the research samples we have seen so far are too small to make any formal conclusions and are subject to widescale variations often dependent on localised conditions.

  Using the research undertaken so far, we have noted a number of preliminary findings that should be emphasised to the Select Committee:

    (i)  People's views and experiences were influenced by their initial orientation to work. A number of sub-groups were identified one group that was highly motivated, another group wanted to work but sometime in the future while a third group did not view work as desirable or possible.

    (ii)  Clients welcomed the financial advice, Condition Management Programme and the identification of further provision, including employment brokerage as very helpful. Again it should be noted that the level of service varied considerably and highlighted the disparities in training across different regions.

    (iii)  In many respects the provision format was very rigid and many clients felt that other services should be amalgamated in to the support packages on offer. This included access to self-help groups and the need to change employer attitudes with regards to the stigmatisms associated with IB recipients.

    (iv)  The most significant finding was "there was little evidence that the pilot was changing negative attitudes towards work among some incapacity benefit recipients."

Are People with Different Disabilities and Health Conditions, in both Pilot and Non-Pilot Areas, Given Appropriate Support by Jobcentre Plus? Is there a Tendency to Help Those Perceived as Closer to the Labour Market?

  Within the pilot areas there is evidence from research conducted to date that some Advisers are using their discretionary powers to exempt clients that they believe are too difficult to deal with from the programme, thereby focusing their effort on those closer to the labour market in order to achieve their targets. Through mainstream national programmes such as NDDP, clients with disabilities and health problems do have access to provision. In effect however, the current funding regimes mean that often NDDP job brokers are only equipped to deal with clients who are close to the labour market and are unable to provide the specialist services required to help clients back on the journey towards sustainable employment. Overall therefore it is our view that Pathways to Work could be better utilised in addressing the needs of those further from the labour market and that more attention should be devoted to this group to ensure that whilst placing those closest to employment into sustainable work the ground is being prepared to enable those slightly further away to maximise the opportunity of employment in the future.

How will the Reforms Help Those who are not Able, or not yet Ready, to Work?

  Without appropriate work focused intervention programmes it is as yet unclear how the reforms will help those who are not yet ready for work.

SUPPORT FOR THE SICK AND DISABLED PEOPLE TO MOVE BACK IN TO WORK

Can the Reformed Systems Support Those with Variable and Manageable Medical Conditions, or Those who are Able to Work Part-Time? Are Those with Mental Health Difficulties Adequately Supported?

  The reformed systems has the potential to support those with variable and manageable medical conditions but this is dependent upon a number of factors:

    (i)  Effective training for IB Advisers that highlights the barriers the vast majority of IB clients suffer from. The use of effective diagnostic tools to aid in identifying the underlying causes of the clients barriers.

    (ii)  Greater methodology has to be introduced to properly diagnose barriers and problems, so that the initial prognosis is correct. Often clients on IB are diagnosed with a symptom of an underlying problem rather than the problem itself.

    (iii)  Partnership arrangements with the health sector, and healthcare professionals, needs to be clarified and realigned, especially with regards to the role of GP's. No standard cohesive referral system is in place to regulate this process and in general the role of the health sector and health professionals is ambiguous.

  Our experience of engaging clients in receipt of IB clearly shows that there is a lack of understanding with regards to permitted work, permitted earnings and return to work credits. The level of knowledge within Jobcentre Plus will vary considerable and will be dependent upon the individual's knowledge and experience. Mental health is only now becoming a recognised barrier to returning to work. Treatment is very difficult to access through mainstream NHS provision and as such a greater emphasis needs to be placed upon integrated working between work focused programmes and front line health care professionals. Some employment programmes have been adept at addressing the needs of clients with mental health problems however much more could be done to ensure that health professionals are able to recognise the benefits of working with employment programmes as standard practice.

Does the Condition Management Programme Provide the Right Level of Support?

  Again we believe it is too early to be certain with regards to the Pathways Pilots. There is some anecdotal evidence that the Condition Management Programme (CMT) is not meeting individual needs and is based purely on what is available within the established process. More research is required into the impact to date of CMT and the steps required to improve the benefits of this approach.

INVOLVEMENT OF HEALTH CARE PROFESSIONALS

Has Pathways Successfully Worked with Healthcare Professionals, Including GP's, Particularly in Rehabilitation Initiatives such as the Condition Management Programme? How can Healthcare Professionals be Further Engaged in the Reform Programme of the Incapacity Benefits System?

  The objective of Pathways is to successfully integrate service provision across the Welfare to Work and healthcare sector. Traditionally these sectors have had distinct strategic objectives. Our experience of engaging health professionals through our Working Neighbourhood Pilots in Tower Hamlets and the Gorbals has demonstrated the need for more mutual understanding between the different sectors and agencies. It is clear that there are excellent examples of effective working between the sectors however recent quotes from the BMA have indicated a reluctance to fully engage in this process for fear of compromising the patient/doctor relationship and also due to an anticipated increased workload. More effort is required to demonstrate the benefits to the health system of work-focused programmes for current IB recipients without expecting increased activity on their part at this time.

JOBCENTRE PLUS RESOURCES

Is Jobcentre Plus Sufficiently Resourced to Deliver the Pathways Pilots, both in Terms of Staffing and Finances? Are they Equipped to deal with a Reform Programme for Incapacity Benefit?

  Jobcentre Plus has demonstrated its ability to resource the initial pilots however we do not believe that it has either sufficient staffing or financial resources to implement the programme on a national basis. It is our view that Jobcentre Plus is only capable—at most—of dealing with Work Focused Interviews (WFI) and referrals to partner organisations within a reformed programme for Incapacity Benefit and that it should not be expected to deal with anything more than this given current/ future resource limitations. Best value results will be delivered through contracting with a range of providers in the independent (voluntary and private) sector. Indeed the independent sector has the capability to deliver on the WFI element of the programme thereby ensuring more effective use of Jobcentre Plus resources.

What has been the Effect of the Efficiencies Agenda?

  The efficiencies agenda has resulted in a scenario where it is virtually impossible to deliver Pathways to Work in house on a national basis, without having a dramatic negative impact on other policy priorities. We are convinced however that this agenda offers the potential for all those involved in Welfare to Work programmes to work smarter in order to deliver success for the clients we all aim to help, rather than simply throw money at a solution which may not always be appropriate.

EXISTING EMPLOYMENT INITIATIVES

What has been the Effect of the Pathways Pilots on Existing Programmes and Support, such as the New Deal for Disabled People and Work Based-Learning for Adults?

  Some of the early research has shown these programmes to be competing for the same client group rather than maximising the synergies that potentially exist to take people from where they currently are towards sustainable employment. It is critical that pathways is targeted at the right client group and that it maximises the synergies of more cost effective programmes in helping place current IB clients back into employment where employment is the most appropriate solution for the individual.

How do Personal Advisors work in Collaboration with Other Jobcentre Plus Staff such as Disability Employment Advisers and Job Brokers?

  From the initial pilots it is difficult to make an informed judgement about this. Further research on a larger scale is needed to come to a informed opinion. Initial findings would again suggest that local variations exist and will be dependent on the existing relationships and synergies. Anecdotally, the pilot in East Renfrewshire has shown some friction between Jobcentre Plus Advisers and NDDP job brokers. This could be resolved if more clarification and guidance, stipulating the role of voluntary and private sector was given.

THE ROLE OF THE PRIVATE AND VOLUNTARY SECTORS

Have the Private Sector and Voluntary Sectors been Successfully Involved in the Pathways Pilots? How can they be Further Involved in the Reform of Incapacity Benefits?

  Although the Chancellors Budget clearly stated that the voluntary and private sector would play an integral role in the delivery of Pathways, this has clearly not been the case to date. Within the independent sector there exists sufficient capacity for the sector to conduct the Work Focused Interview elements of Pathways. Additionally significant benefits could be gained by greater involvement of the private and voluntary sectors to compare value for money outcomes and bring greater innovation to the development of solutions for the client group.

  As things stand, a clearer definition of what the role of the private and voluntary sector entails is required. In addition, a clear framework needs to be formulated to specify how each sector would interact with each other and work in partnership to achieve the communal goals outlined by the Government. At present, partnerships are defined at a local level and fit in to the existing framework of provision and the current political landscape. All indications are that the bulk of resources are being utilised either in house at Jobcentre Plus or via the NHS, with the voluntary and private sector contributing purely on the fringes. We are convinced that this is a missed opportunity in terms of delivering enhanced sustainable outcomes for the participants.

  The private sector can be an important component in this process by delivering provision and brokering employment. For many clients, the major obstacle to employment is mental health. This predominantly concerns low levels of self-esteem and confidence. Reed in Partnership already delivers a comprehensive package of support to clients participating in all of our 12 Action Team for Jobs located across the UK. Our experiences in London, Liverpool, Middlesbrough, Doncaster and Glasgow show that using intensive capacity building one to one interventions can make a positive difference, eventually leading to lifestyle stabilisation and progression to employment.

  Evidence gathered through New Deal indicates that Jobcentre Plus Advisers do not have sufficient time or autonomy to make the interventions required to progress clients towards the labour market.

  As previously referred to, we are convinced that mandatory or voluntary programmes for new referrals on to a revised IB, based around the principles of Action Team programmes can deliver better value outcomes for a significant number of participants—without the need for the more expensive Pathways approach.

LOCAL LABOUR MARKETS

What Type of Jobs are Participants of Pathways Moving into? Are they Receiving Appropriate In-Work Support to Enhance Job Retention?

  Our own understanding of the Pathways to Work pilots has shown that clients participating on Pathways are accessing employment opportunities in a diverse range of sectors. This will be dependent upon the economic mix of the local area and the flexibility of working practices they adopt.

  In-work support varies considerably and is dependent upon a number of local variables including local provision and the calibre of Jobcentre Plus Advisers. Initial research has shown that both these variables vary considerably across regions, although more research is needed to fully substantiate this.

Are Local Labour Markets Able to Provide the Jobs Needed?

  As things currently stand, in the long term the answer is no. However, in the short to medium term the answer is clearly yes.

  As previously mentioned where employment opportunities are greatest, predominantly in the South East, IB levels are at their lowest.

  Our experience of working with IB clients in the North and Scotland has shown that there is still significant scope to work with large numbers of IB clients to help them gain sustainable employment purely by focusing on overcoming their barriers and building their potential to gain employment amongst existing vacancies over the next five year period. However, in the longer term if we are to achieve IB levels in the North, Wales and Scotland more comparable with those in the South then it is essential that greater effort be focused on creating new employment opportunities in these areas.

  It is imperative therefore that wider government policy focuses on delivering new employment in these locations in parallel with a continued focus on preparing IB clients for existing employment opportunities.

What is the Experience of Employers?

  In our experience employers are not concerned where their supply of labour originates from. The most important factor is they are equipped with the necessary skills and personal attributes to carry out the job effectively or indeed simply the ability to be trained to do so. Within certain sectors this criteria can be very simple and basic. Pre-requisite skills and attributes include presentation, positive attitude, ability to do the work and/or willingness to learn and reliability. Reliance on those businesses with a greater sense of corporate social responsibility may have enabled the pilots to get off to a good start in terms of positive outcomes however as a mainstream solution it is imperative that any programme working with IB recipients enables them to be ready for work when the walk through the employers door.

Chris Melvin

30 September2005



27   DWP Report 1998. Back


 
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