Select Committee on Work and Pensions Third Report

8  Lone Parents

222. Good progress has been made in recent years towards raising the employment rate of lone parents. Professor Jane Millar has explained that:

The introduction of the New Deal for Lone Parents (NDLP) as a national programme in 1998 represented an important change in UK policy towards lone parents […] NDLP was the first labour market programme specifically for lone parents […] lone parents could access their own support programme, one which aimed to offer them individual, tailor-made information and support […] Employment rates among lone parents rose from around 46% in 1997 to around 51% in 2001.[260]

However, this rise has slowed recently, which is discussed further below. This graph shows the current situation and projected future changes:[261]

Figure 4:

223. Lone parents are, as we have already noted, a very diverse group with complex needs. One Plus, an organisation providing training and support to lone parents, told us that the employability of an individual lone parent depended on several groups of key factors:

  • Personal Attributes: The knowledge and skills a Lone Parent possesses and his/her attitude;
  • Personal Circumstances: This includes issues such as transport, childcare and physical / mental health;
  • Structural: The economic, environmental and social context within which work is sought including issues of place, employment opportunities and inequality.[262]

224. Some of the challenges lone parents experience relate to their status as parents. As Lisa Harker's report explained, all parents share some common employment requirements - "a job that enables them to balance their work and caring responsibilities, access to childcare (if appropriate) and a sufficient income to lift their family out of poverty."[263] Lone parents face a particular challenge in balancing the demands of paid work with those of being the sole main carer of their children.

225. However, as Kate Green of the Child Poverty Action Group said, some also experience other barriers, such as a disability. She told the Committee that "we see a lot of lone parents who are also […] parents of disabled children, maybe disabled parents themselves or maybe carers."[264] The question of how policy should adapt to provide a more effective service to those with multiple disadvantages is examined in Chapter 3.

226. Just over half (56.5%) of lone parents are currently in employment.[265] The DWP has set an objective of increasing the employment rate for lone parents to 70% by 2010. This, it calculates, will mean getting an extra 300,000 lone parents into work.[266] Witnesses supported the objective of making it easier for lone parents to balance paid work with caring for their children. The Equal Opportunities Commission told us that:

"[n]o-one should feel obliged to give up their caring responsibilities in order go into paid work. Equally, no-one who wants to be in paid work should be kept out of employment by the absence of support for their caring responsibilities. Raising the employment rate will require greater investment in those support services."[267]

227. Chris Pond, Chief Executive of One Parent Families, told us that the target was a reflection of lone parents' own desire to work:

"I think it is an ambitious target. It is less ambitious than the target for lone parents themselves, 90% of whom tell us that if the circumstances were right, in other words if the affordable and quality childcare was available and if the right jobs were there and the right pay was there, they would like to work."[268]

228. DWP argued that important progress has been made in recent years:

"In 1997 the lone parent employment rate lagged behind those of many other countries. Since then there has been substantial progress: the employment rate of lone parents has risen by 11.3 percentage points to 56.6% (spring 2006) and the number of lone parents dependant on Income Support has fallen by over 200,000 to around three quarters of a million now."[269]

229. The rate of increase in lone parent employment appears to have slowed recently. According to Labour Force Survey figures, it is currently 56.5% and has not increased since Spring 2005.[270] Professor Paul Gregg argued that this was a facet of a generally slow labour market. He added that other data showed "continuous small gains over the last two or three years" although "nowhere near at the level or order of magnitude that would make a serious stab at a 70% target."[271]

230. There was general agreement among witnesses that further policy changes would be needed to reach 70%. The Centre for Economic and Social Inclusion (Inclusion) argued that:

"Reaching a 70% employment rate by 2010 looks difficult unless there is something to cause a change in trend. The more rapid increases from 2000 and again from 2004 can be attributed to the development of New Deal for Lone Parents and the introduction of Tax Credits. This would suggest that further improvements in programmes and incentives will be needed."[272]

231. Witnesses also argued that because the necessary policy changes would take time to implement and take effect, the 70% target was unlikely to be reached by 2010. One Parent Families argued that "there is very little time to allow any new proposals to bite." Professor Paul Gregg said:

"The level of step-change that is needed in order to produce it is huge […] We are virtually into 2007. The kind of changes that we need will take a year or two to get on the ground, to make them happen, and that does not leave enough time to get to 2010. We are really looking at playing a slightly longer game here. We really should be thinking about what comes after 2010."[273]

232. A range of policy measures are necessary to address the complex needs of lone parents attempting to move into and keep paid work. Some, such as measures to encourage the provision of suitable affordable childcare, are crucial but ones that we have not had the opportunity to look at in detail in this inquiry. The main focus here has been the services provided by Jobcentre Plus (or commissioned by DWP or others) which engage lone parents and help them to move towards paid work and, once in employment, to retain it. The evidence which will be discussed below suggested the need for a shift in policy - with, in particular, more efforts to engage disadvantaged lone parents in the NDLP and to improve sustainability of employment, and specific measures targeted at lone parents in London.

New Deal for Lone Parents

233. One Parent Families described the New Deal for Lone Parents (NDLP) as "the Government's main initiative to help lone parents into paid work." Participation is voluntary. One Parent Families explained that:

"NDLP has seen a steady increase in participation rates and in the subsequent number of participants getting jobs. Still in February 2006, only 63,370 lone parents 8 % out of a total population of 777,100 lone parent families on key benefits were participating in the programme."[274]

234. Professor Paul Gregg told the Committee that "the number of people actually coming on to the New Deal for Lone Parents has improved, but it is still relatively low compared with the stock. We have a simple lack of engagement."[275]

235. Witnesses also suggested that those who needed to engage may be "harder to help". Chris Pond of One Parent Families told us that progress "is getting more difficult because the groups that we are trying to help now are the hardest to reach. We all know that the further you get up the mountain, the thinner the oxygen gets, and we are now above the tree line in terms of this target." The groups who would need to be encouraged to work in order to meet the target, he said, included those with "lower levels of qualifications," the "less job ready," and "those who have been on benefits for longer … two-thirds […] [of lone parents on benefits] have been on benefits for two years."[276] One Parent Families also argued that most of the initiatives to date - such as the work search credit - "seemed designed to push those who are work ready over the tipping point into work."

236. As a response to this, the Single Parent Action Network (SPAN) recommended:

"stronger links and joined-up thinking between these voluntary providers, and statutory agencies such as Jobcentre Plus, Learning and Skills Council in order to consolidate the implementation of WRAP. Direct sustainable government funding is required to enable lone parent organisation to continue to deliver and expand these innovative services. At the very least, lone parent organisations should be enabled to develop quality assurance frameworks for the delivery of services for hard to reach lone parents by other independent providers."[277]

Work-focused interviews

237. Since April 2000, DWP has been rolling out a requirement for lone parents who are on Income Support (or claiming benefits at certain Jobcentre Plus offices) to attend compulsory work-focused interviews (WFIs).[278] In its January 2006 Welfare Reform Green Paper, the Government said that the success of work-focused interviews and the New Deal for Lone Parents had encouraged it to go further, increasing the frequency of work-focused interviews for certain groups.[279] From April 2007, the DWP will be "extending the Work Focused Interview intervention regime by introducing WFIs at six-monthly intervals for all claimants with a youngest child aged 13 or younger". DWP describes the purpose of these interviews as helping to ensure that lone parents are "aware of all the help available."[280]

238. One Parent Families acknowledged that WFIs play this role and stated that it had accepted "a limited amount of conditionality"[281] for this reason. However, it was unconvinced that the introduction of further WFIs would be effective. Chris Pond said:

"Frankly, compulsion is not going to buy you very much progress towards the target […] It could be counter-productive because one of the great successes of the New Deal for Lone Parents has been its voluntary nature, the fact that people feel they are engaging on a voluntary basis and they therefore engage more enthusiastically than they would if required. Most importantly we do not think, frankly, that Jobcentre Plus and the DWP can deliver on increased conditionality without undermining the quality of the provision that is already there [...] We are very, very anxious that the attempt to increase that conditionality is simply going to mean that the quality is going to fall further, the amount of help and support that lone parents are given is going to be reduced, and it will be more difficult to reach the employment target and not easier to do so."[282]

239. One Parent Families told us that the evidence of the effectiveness of compulsory WFIs was, in their view, doubtful:

"Academic evaluations of the evidence have found what, in our view, are relatively small impacts. Initial administrative data analysis found that the introduction of Work Focussed Interviews had no clear impact on the numbers of new or repeat Income Support claimants moving into work, and produced only a one percentage point increase in the number of stock claimants doing so.

Recently published analysis suggests a more positive effect. Analysing the extension of WFIs to lone parents with children aged under three in 2003, Knight and Thomas state that: 'At six months after the claim start, for the years immediately prior to the LPWFI extension, the rate of exit of this group of eligible lone parents was between 19 to 22 %. Accordingly, the LPWFI impact of 1.5 to 2 percentage points relative to the base exit amounted to a reasonable increase.'

However, this research was not able to separate out the effect of WFIs from the effect of additional schemes being piloted within the New Deal for Lone Parents. Perhaps more significantly, nor could it separate out their effect from the introduction of New Tax Credits, also in 2003."[283]

240. A 2003 report by the National Employment Panel also questioned the effectiveness of increased compulsory WFIs, concluding that they risked "becoming simply a 'box ticking' exercise for overburdened staff. Instead, we think it makes more sense to retain an element of discretion and to place greater focus on the content and quality of the interaction between Personal Adviser and lone parent."[284]

241. The Secretary of State for Work and Pensions has recently announced plans to encourage more lone parents to enter work. These will be considered in Chapter 11.

Work Related Activity Premium

242. In addition to the extension of work-focused interviews, the Government is piloting a new Work Related Activity Premium (WRAP) - so that lone parents are better off if they take serious steps towards preparing for work.[285] Paul Gregg described this as a "strategy to financially induce lone parents to engage in a successful service" and an idea that is "worth considering extensively."[286]

243. The WRAP is targeted, in particular, at lone parents with secondary school-aged children who, the Treasury argues, have a "responsibility to make a serious effort to return to work."[287] From April 2007, in pilot areas, lone parents whose youngest child is aged 11 or over will get an extra £20 per week on top of their benefits for a period of six months if they agree, with a Personal Adviser "to take the necessary steps to prepare themselves for entering and competing in the workplace." The "WRAP will be supported by the introduction of quarterly Work Focused Interviews (WFI) with a personal adviser where a plan of action is agreed that will help them make that step off benefits and into work."[288]

244. Organisations working with lone parents supported the introduction of the WRAP. One Parent Families welcomed "the recognition that there may be steps that lone parents need to take before they enter employment, and the idea of a progression route into work rather than a simple leap. We hope that the introduction of WRAP will enable NDLP to offer more to those furthest from the labour market whom it has traditionally served least well."[289] The Single Parent Action Network (SPAN) agreed.[290]

245. Both organisations, however, had concerns about the details of the proposals, questioning whether it should be targeted at lone parents with school age children, for example. One Parent Families argued that a relatively high proportion of lone parents with older children already do work - 66% for those with children aged 11-15 - suggesting that "those with older children who are not in work may face serious barriers and are not a 'quick win' group, and secondly, that "action directed at this group is unlikely to have a significant effect on the 70% target." One Parent Families explained that it understood that DWP were suggesting that, while lone parents with younger children would have to opt in to WRAP, those with children aged 11+ would have to opt out of the activity and the premium. It explained its concerns about this:

"We think that this firstly, will be incredibly resource intensive for Jobcentre Plus at a time when they are already struggling, and secondly, will send out the wrong message to lone parents. We know that lone parents worry about going to the Jobcentre, particularly that they will be forced to work when they do not feel ready. An 'opt out' policy, sold as something that is stepping up the pressure on lone parents will alienate those lone parents who are worried about work, and who could most benefit from work related activity."[291]

246. One Parent Families, SPAN and One Plus recommended that the WRAP should be available to all lone parents on a voluntary (opt in) basis.[292] SPAN recommended that the period for which the WRAP was payable should be extended to a year.[293] One Plus argued that this should be done in certain cases: "[p]ayment of the premium for six months is restrictive - reasons for lengthening it might include training courses which last longer than six months; where the lone parent has a learning disability or some other disability; where activity has been interrupted because of illness (in the lone parent or their child); or recurrent factors such as school holidays."[294]

247. Lisa Harker, in her report for the DWP on child poverty, was more open to the idea of introducing the WRAP on an opt-out basis, in conjunction with quarterly or six-monthly WFIs (which she described as a form of 'soft compulsion'):

"The premium potentially offers a way to incentivise efforts to prepare for a return to work without penalising those who are not ready to take a job. The pilots will determine the impact of offering a payment on an opt-out basis. On the basis of this evidence the Department should then look at whether a payment of this sort should be rolled out nationally - either on a voluntary or mandatory basis - to all lone parents with school-age children."[295]

Improving Engagement

248. We conclude that Jobcentre Plus needs to do more to successfully engage harder to reach lone parents. The further increase in the frequency of WFIs announced in the Pre-Budget Report 2006 may not be an effective use of Jobcentre Plus advisers' time and may undermine the quality of the provision that is already there, making it more difficult effectively to engage disadvantaged lone parents in preparing for paid work. We recommend that DWP monitor carefully the success of the implementation of this measure.

249. The Committee welcomes the introduction of the Work Related Activity Premium, which appears to be a sensible way of engaging lone parents to prepare for work. We have received evidence, however, that targeting it at lone parents with secondary school age children may not be the most effective use of the programme, and we conclude that the DWP should consider making it available to lone parents with children of all ages on an opt-in basis.

250. We recommend that, in its evaluation of the WRAP, the DWP should attempt to quantify the effectiveness of the quarterly work-focused interviews which accompany the WRAP payments. Particular attention should also be paid to whether the six months allowed is long enough to engage disadvantaged lone parents.

251. We conclude that it is essential to ensure good links between voluntary and community organisations and Jobcentre Plus and the Learning and Skills Council to help engage lone parents with Jobcentre Plus provision.

New Deal Plus for Lone Parents

252. Once lone parents are engaged, the New Deal for Lone Parents needs to provide a service to meet their varying and complex needs. One Parent Families argued that the New Deal Plus for Lone Parents, which has been operating in five areas of the country since Spring 2005, offers valuable additional support and should be rolled-out nationwide. New Deal Plus for Lone Parents offers, in addition to the normal provisions of the New Deal for Lone Parents:

253. One Parent Families stated that this "offers valuable additional support, and we believe that this should be rolled out across the country. Combined with the Work Related Activity Premium, this would represent an impressive package to help lone parents back to work."[297]

Transitions from Benefit to Work

254. During the Committee's visit to Glasgow, lone parents at the Rosemount Lifelong Learning Centre told us about the financial uncertainties involved in moving from out-of-work benefits into paid work. Difficulties included gaps in income while waiting for the first pay cheque, dealing with demands for increased repayments of debt, which may have been dormant while the lone parent was on benefit, and dealing with interruptions in income if they had to take time off, because a child was ill, for example. Kate Green of the Child Poverty Action Group told us that:

"The risk that lone parents feel they are taking as they move into employment or increase their hours is indeed borne out by the way in which the benefit system may interact and start to make that transition quite uneconomic. I think at the very least there is a need for incredibly good advice at that point about the financial implications of changing a working pattern and moving into paid employment, and that advice is often not entirely complete."[298]

She said that lone parents often preferred "poor but safe" benefits to the unpredictability of fluctuating earned income.

255. We asked Chris Pond of One Parent Families whether the DWP should consider continuing benefit payments for a short period after a lone parent enters work, to prevent short-term financial hardship. He told us:

"Certainly we need to look at ways of trying to provide that continuity because that period while lone parents are waiting for their first pay packet can be a very difficult period indeed. It will be a real disincentive to many lone parents to take that step, wondering how on earth they could make ends meet while they wait for the first pay packet to come in. So we do need to explore new ways of providing that rollover into employment."[299]

256. Lone Parents who have been on benefits for 26 weeks can at present receive a £250 job grant on entering employment, and payment of benefits can be extended for the first four weeks of employment in certain circumstances.[300] We recommend that Personal Advisers be given greater discretion over further benefit extensions.

257. The package of measures included in the New Deal Plus for Lone Parents - with its in-work emergency fund and ongoing support from a Jobcentre Plus adviser - has the potential to address some of these issues.

258. We recommend that the Government ensure that lone parents receive advice on their existing employment rights. The Committee welcomes the piloting, in the New Deal Plus for Lone Parents, of measures which offer increased support for lone parents preparing for and moving into paid work. We recommend that a commitment be made in the Comprehensive Spending Review to roll out the effective elements of this nationwide, either as New Deal Plus for Lone Parents or as part of a more flexible Building on the New Deal programme, as recommended in Chapter 3.

Lone Parents in London

259. Employment rates in London are lower than for the rest of the UK - the so-called "London effect."[301] The overall employment rate in London is 67%, compared to 72% in the country as a whole.[302] Part of this effect can be explained by the presence in London of high proportions of people with characteristics which are associated with labour market disadvantage. Pamela Meadows of the National Institute for Social and Economic Research told us that "inner London has a concentration of people who have characteristics which put them at a disadvantage in the labour market wherever they live."[303] Examples of these characteristics included:

"being of Bangladeshi origin […] [having low or no] qualifications, [not] speaking English as a first language or indeed speaking English at all. London has a higher proportion of first generation migrants generally in its population. There is always an issue with newcomers in that they do not have access to the same social networks as a means of finding jobs."[304]

260. Lone Parents seem to have particular problems in London. The London Child Poverty Commission found that parents in London had lower employment rates than in the rest of the UK:

"The employment rate for lone parents living in London (43%) is well below the rate for lone parents outside London (58%). Lone parents in both Inner and Outer London have very low employment rates (39% and 47%) relative to lone parents in the rest of the UK.

The employment rate for mothers living in couples living in London (60%) is well below the rate for couple mothers in the rest of the UK (73%). Within London, rates are very low for those living in Inner London, where less than half (48%) of all couple mothers are in work compared with two-thirds in Outer London."[305]

261. Declan Gaffney, a member of the London Child Poverty Commission, told us that the low employment rates in London compared to the rest of the UK were almost entirely explained by low employment among parents:

"The most striking thing about London, looking at worklessness compared with other parts of the UK, is once you take out full time students from the picture, which slightly distorts comparisons, and compare the employment rates of the rest of the UK parents account for all the difference. This is both lone parents and mothers in couples and fathers, all of whom have employment rates which are lower than parents in the rest of the UK. We found that people who do not have kids tend to have very similar employment rates to the rest of the country."[306]

262. Carey Oppenheim, Chair of the London Child Poverty Commission, explained that one of the differences between London and the rest of the country was the very low rates of part-time working. This, she said, "may be [caused by] a mixture of labour market, structural issues but also issues about incentives to work."[307] One Parent Families explained that part-time work was a preferred option for many lone parents, with nearly half of those in employment in spring 2004 working part-time.[308]

263. Evidence suggests that the New Deal for Lone Parents, like all New Deals and Jobcentre Plus as a whole, performs less well in London than elsewhere. A Treasury report published in March 2006 commented that:

"Given the greater concentration of groups with labour market disadvantages in London, labour market programmes in the capital might be expected to have more difficulty reaching the levels of effectiveness seen in the rest of the UK. There are indications that this is the case. The proportion of New Deal leavers in London who find work through the New Deal is significantly lower than the national average […] […] London's share of Job Entries through Jobcentre Plus is significantly lower than would be expected given London's share of the national benefit caseload. Again, this is reflected across all client groups."[309]

264. We asked Carey Oppenheim what she thought were the reasons for this poorer performance. She said, "It strikes me that it would be a combination of turnover within employment offices, Jobcentre Plus offices and other offices, coupled with a challenging population."[310]

265. Without a significant increase in the employment rate in London, the Government is unlikely to reach its existing targets on child poverty and lone parent employment, or to achieve the employment rate aspiration. Paul Gregg said that:

"London is the kind of place that, because of the failures we have had so far, we should be trying things such as the work-related activity premiums and the in-work credit more extensively than we are nationally. It should be a breaking ground for some of those ideas […] work incentives in London are weak for parents."[311]

266. Carey Oppenheim told us that the Cities Strategy might work well in London, because the "city pilots are an ideal way of being able to test greater cohesion and a more rounded service at the front line."[312] The Cities Strategy was discussed in Chapter 6. Pamela Meadows told us that early signs suggested that Employment Zones might be performing better for harder-to-reach groups, and that this might be because they were smaller in scale than Jobcentre Plus:

"The one thing we do know about measures to help people get back to work is that small interventions work better than large ones. That appears to be partly to do with the quality of the staff you are able to deploy when you are doing something new and innovative, as opposed to when you are doing something big, serving thousands if not hundreds of thousands of people. That is one of the issues around Jobcentre Plus in London. It is a big, impassable, rule-bound organisation that has to deliver things in a way which is equitable across the country, and it is quite difficult within that framework to offer the sort of flexible personalised service that you can do in the Employment Zones."[313]

267. Declan Gaffney agreed that services needed to be more flexible:

"There is probably nothing in particular about living in London that constitutes a unique barrier to employment. What we do have in London is very large numbers of people who are facing several different barriers which need to be negotiated at the same time for work to be a genuine possibility. It is pretty clear that the employment services as they are currently set up are not set up to address those barriers across the board."[314]

268. Kate Green of CPAG made an additional point: "The take-up of the childcare element of working tax credit is very low."[315]

269. We conclude that the performance of Jobcentre Plus and the New Deals in London will need to improve if the DWP is to have a chance of achieving its 70% lone parent employment target. Lone parents and other groups with low employment rates face particular barriers to work in London, including a lack of affordable childcare and high housing costs. We also recommend that the Government should examine the take-up rate of the childcare element of Working Tax Credit in London.

270. We will follow with interest the evaluation of Employment Zones, and the development of the Cities Strategy pilots in London. We recommend that the DWP also consider offering enhanced incentives to work to lone parents in London, and ask it to set out how it intends to improve its performance in helping lone parents in London overcome the particular difficulties they face. As we have already recommended, the DWP should move towards a more flexible menu of provision for all.

260   J.Millar, Meeting the 70 % target - policy gaps and options, in Thurley (ed), Working to Target: Can policies deliver paid work for seven in ten lone parents?, One Parent Families, 2003 Back

261   Department for Work and Pensions, Autumn Performance Report 2006, p 25 Back

262   Ev 279 Back

263   Department for Work and Pensions, Delivering on Child Poverty: What would it take?, Cm 6951, November 2006, p 17 Back

264   Q 70 Back

265   Department for Work and Pensions, Autumn Performance Report 2006, p 24 Back

266   Ev 244 Back

267   Ev 264 Back

268   Q 68 Back

269   Ev 246 Back

270   Department for Work and Pensions, Autumn Performance Report 2006, p 24 Back

271   Q 303 Back

272   Ev 313 Back

273   Q 305 Back

274   Ev 182 Back

275   Q 304 Back

276   Q 70 Back

277   Ev 166 Back

278   HM Treasury, Pre-Budget Report 2000, Cm 4917, November 2000, p 76; "New Deal for Lone Parents goes nation-wide," Department for Work and Pensions Press Release, 30 April 2001 Back

279   Department for Work and Pensions, A new deal for welfare: empowering people to work, p 54 Back

280   Ev 246 Back

281   Ev 185 Back

282   Q 79 Back

283   Ev 185-6 Back

284   National Employment Panel, Work, works: Final Report of the Steering Group on Lone Parents, April 2003, p 12  Back

285   HM Treasury, Budget 2006, HC 968, p 85 Back

286   Q 304 Back

287   HM Treasury, Budget 2006, HC 968, p 85 Back

288   "Next stage of help for lone parents to make the move off benefits and into work," Department for Work and Pensions Press Release, 12 October 2006 Back

289   Ev 184 Back

290   Ev 166-7 Back

291   Ev 184-5 Back

292   Ev 168, Ev 185, Ev 280 Back

293   Ev 185 Back

294   Ev 289 Back

295   Department for Work and Pensions, Delivering on Child Poverty: What would it take?, p 24 Back

296   Ev 184 Back

297   Ev 184 Back

298   Q 70 Back

299   Q 97 Back

300, Lone Parents. Back

301   See, for example, HM Treasury, Employment Opportunity for All: Analysing Employment Trends in London, p 30. Back

302   Ev 330 Back

303   Q 269 Back

304   Q 271 Back

305   London Child Poverty Commission, Monitoring child poverty in London, September 2006, pp 13-14 Back

306   Q 269 Back

307   Q 269 Back

308   Ev 179 Back

309   HM Treasury, Employment opportunity for all: Analysing labour market trends in London, pp 54-55 Back

310   Q 300 Back

311   Q 314 Back

312   Q 300 Back

313   Q 302 Back

314   Q 272 Back

315   Q 74 Back

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