Select Committee on Work and Pensions Eighth Report


3  Improving the employment rate of disadvantaged groups

15. As we acknowledged in our report on the Government's Employment Strategy, "the DWP's 80% [employment rate] aim is a challenging one."[19] The In work, better off Green Paper sets out the Government's plans which include:

a)  engaging more lone parents in the labour market;

b)  increasing the numbers of people from ethnic minorities in work; and

c)   building upon Pathways to Work and increasing the employment rate among disabled people.

Lone parents

16. The Green Paper sets out the case for introducing more work 'conditionality' for lone parents:

"The Harker report maintained that if a strong package of support was in place for lone parents, including guaranteed access to affordable and suitable childcare and work that fitted with family commitments, there would be grounds for 'strengthening lone parents' responsibility to look for work as the logical next step'. The Freud report also considered that the time was right for a move in this direction. Similarly, the Organisation for Economic Co-operation and Development (OECD) has recommended that, with the right support in place, the UK should consider further extending work tests for lone parents. Indeed, the UK is rare amongst the OCED countries in having a specific benefit for lone parents with no worksearch conditionality attached. Most countries have moved, or are moving, towards tougher work obligations on lone parents."[20]

17. In our Employment Strategy report, we found a consensus among witnesses that there would need to be further development of policies aimed at engaging lone parents in the labour market if the target of moving 70% of lone parents into work was to be reached. The Centre for Economic and Social Inclusion (Inclusion) argued:

"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."[21]

18. The Government had already announced that it considered as "the right direction of travel" David Freud's proposal that, from 2008, lone parents with a youngest child aged 12 or over should no longer be entitled to claim Income Support solely on the grounds of being a lone parent.[22] The Green Paper extends this requirement, reasoning:

"on its own, this will only affect around one in seven lone parents on benefit. Correspondingly, the impact on child poverty, while important, will be small. We therefore also propose that this age should be brought down to a youngest child of seven years old from October 2010. Over time, this will affect nearly 40% of lone parents currently on Income Support. By October 2010 the aspiration is that all schools in England will be extended schools providing a range of activities between 8am and 6pm on weekdays for 48 weeks of the year."[23]

19. This policy change was met by strong criticism from the voluntary sector. Chris Pond, Chief Executive of One Parent Families / Gingerbread said:

"Most single parents are already working and those who are not either want to, but can't find affordable childcare or a job that fits with school hours, or have very good reasons for deciding that their children need a parent at home to guide them for a time.

"One quarter are caring for a disabled child. Children of all ages can need a parent at home for a period, especially in the aftermath of divorce or separation. A punitive approach would only impact badly on youngsters in one parent families - many of whom have already lost one parent - while alienating work-ready lone parents from the voluntary New Deal scheme which is doubling parents' chances of finding work. It is extremely worrying that the Government is imposing new requirements on parents without detailing any additional form of support. The Government has repeatedly emphasised that parents know best when it comes to making choices about how to combine work and family life."[24]

20. A 2003 report by the National Employment Panel questioned the effectiveness of the increased use of compulsory Work Focussed Interviews (WFIs), concluding that they risked "becoming simply a 'box ticking' exercise for overburdened staff." Instead, the NEP concluded, "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."[25]

21. The Committee concluded in its Employment Strategy Report:

"We recommend that any changes to the system of benefits for lone parents take account of the fact that paid work may not be the best option for a lone parent, even if they have children of secondary school age. There may be a range of reasons why a lone parent does not wish to work. We recommend that the DWP concentrate its efforts on providing better support for the majority of lone parents who do want to work, as discussed in the chapter on lone parents above.

We recommend that the Government continue to improve the provision of suitable, affordable childcare in all areas, which will be essential in order to improve the ability of lone parents to enter and keep paid work."[26]

22. Questioned about the rationale behind extending conditionality to lone parents whose youngest child is aged seven or over, the Minister told us:

"We have to think about how we engage with a larger number of lone parents in order to support them into work. Part of the way to do that is to think about reducing it incrementally to a lower age. There is the international evidence that we are out of kilter with a lot of support programmes around lone parents and the point at which conditionality is part of that support, but also, in terms of our ambitions to tackle child poverty and meet our full-employment provision, we will not really do that unless we have policies which are about engagement in a much more upfront way whilst recognising that with that conditionality there comes a responsibility on us to recognise how we support [lone parents]."[27]

23. Given that increases in the scope of conditionality are being considered, it is worrying that recent figures show that the number of sanctions applied to lone parents who fail to attend a work focused interview has increased, with 40,300 lone parents sanctioned in 2005-06: [28]

Lone parent work focused interview (WFI) benefit sanctions
Year WFI was first booked Number of WFIs booked Number of sanctions applied Percentage of booked WFIs sanctioned
April 2002-March 2003 338,8005,600 1.7
April 2003-March 2004 603,10014,300 2.4
April 2004-March 2005 770,10031,800 4.1
April 2005-March 2006 908,30040,300 4.4
Note:
Data exclude quarterly WFIs which were introduced nationally from October 2005 for lone parents whose youngest child is aged 14 and over as this administrative data are not yet available for analysis.
Source:
Labour Market Service evaluation databases.

24. We feel that the Government has yet to prove that increasing conditionality for lone parents is the best way to help them to get back into the labour market. We therefore recommend that DWP sets out the evidence base for its proposals, demonstrating the significantly positive impact this policy will have on the lone parent employment rate and on lone parents themselves, and explaining on what grounds the age of seven has been chosen.

25. In 2005-06 40,300 lone parents were sanctioned for not attending a work focused interview (WFI). We are concerned that so many lone parents are failing to attend, particularly when conditionality is only attached to attending the WFI rather than on finding employment. We recommend that the Government undertakes close analysis of why such high numbers of lone parents are prepared to face sanctions rather than attend a work focused interview.

MAKING WORK PAY

26. The In work, better off Green Paper sets out the Government's aim of ensuring that lone parents are financially better off in work:

"And we want to make work pay. We do not wish to repeat the US experience, where welfare reform resulted in many lone parents moving into work, but remaining mired in poverty. We want to support lone parents into employment that reduces poverty for them and for their children as much as possible. In Australia, for example, reforms introduced in 2006 mean that parents with a youngest child over six are only obliged to accept an offer of employment which makes them financially better off than on benefit. We are attracted to this idea. We would like to be able to make clear to lone parents 0that the job vacancies that they are offered through Jobcentre Plus will indeed make them, and their children, better off. Also, in addition to the tax credit system which is there to try to ensure that work pays, we will consider the experience of the In-Work Credit pilots to determine what role such direct financial incentives can play."[29]

27. In order to ensure that lone parents will be better off in work, a valuable tool is the Better Off Calculation, which is undertaken by Jobcentre Plus to determine the income a person needs to be financially better off working than they would be on benefits. DWP research has shown that a Better Off Calculation (BOC) can provide the necessary incentive to encourage lone parents among others into the labour market:

"Discussing better-off calculations with advisers or working out financial projections

at home led some to discover that they could afford to work fewer hours, which

would suit their condition or their family circumstances better. Some realised that

they could take lower paid jobs which would suit them rather than searching longer

for the higher paid work they had previously thought they needed to meet living

expenses."[30]

28. Despite the positive impact the calculation can have on the incentive to work, the national target for the delivery of BOCs is just 20%.[31] The Secretary of State emphasised the need for more lone parents to receive them:

Michael Jabez Foster: "Would you have an ambition or perhaps a requirement that this better-off interview takes place when we are discussing plans for single parents in every case?

Mr Hain: "Yes, certainly that would be the objective and that has become increasingly so in recent times, and I would want to see it as an essential part of the interview because if people do not know that they are going to be better off, what is the incentive to work?"[32]

29. We welcome the DWP's emphasis on ensuring that lone parents going back to work are better off than they were on benefits. It is not right - and it is ultimately unsustainable - to push people off benefits but leave them mired in poverty. However, to translate this laudable aim into reality lone parents must know how much they need to earn to ensure that they are better off in employment. If the Government is to follow the Australian model where lone parents are only obliged to accept an offer of employment which makes them financially better off working, the number of Better-Off Calculations conducted must be increased and DWP must make the necessary resources available to Jobcentre Plus for this.

LONE PARENTS WITH DISABLED CHILDREN

30. The measures proposed in the Green Paper are intended to support all lone parents including those whose children are disabled. The employment rates for parents with disabled children are astonishingly low. Every Disabled Child Matters reported that only 16% of mothers of disabled children work, compared to over 60% of mothers generally.[33]

31. Following the publication of David Freud's report in March 2007 the Disability Rights Commission (DRC) warned that lone parents with disabled children would need extra help to take up work. The DRC identified a lack of affordable childcare and after school activities for disabled children as key concerns.[34]

32. In September 2006, Every Disabled Child Matters highlighted the growth in evidence to suggest that lone parents with disabled children face particular barriers to returning to work because they cannot access appropriate childcare:

"There are a number of reasons for this failure [including]:

  • a lack of inspection of the supply of childcare places for disabled children
  • no funding stream to increase the volume of childcare for disabled children
  • a lack of coordination between the national and local childcare strategies with other legislation and initiatives aimed at supporting disabled children and their families

[…] Parents of disabled children report that some professionals act as if it would suit 'the system' better if they remained at home as carers of their children. In this way parents attend hospital appointments at times that suit the professionals."[35]

33. DRC chairman Sir Bert Massie said:

"The general flow of traffic in these proposals is on the right track: to reach the most disadvantaged and build incentives for private and voluntary agencies to support them into work. But before extending conditions for lone parents receiving benefit we have to be confident that all support is and will be provided to make work a palpable reality for them." [36]

34. He warned that without support lone parents will continue to "occupy the lonely planet of exclusion, poverty and distance from work because of continuing failures to ensure a sound platform for their participation".[37]

35. The Green Paper seeks views on how conditionality might affect lone parents with disabled children but there is no evidence that the impact of the proposals on this group has been assessed.

36. DWP's own research has shown that current interventions aimed at supporting lone parents with disabled children into work may not be having sufficient impact. Its report The lone parents pilots: A qualitative evaluation of Quarterly Work Focused Interviews (12+), Work Search Premium and In Work Credit, found:

"Broadly, customers' attitudes towards the Quarterly Work Focused Interviews differed for those who had subsequently entered work, who were mostly positive, and those who had not, who were more negative […] Those who were negative tended to be less receptive towards the idea of working and/or to have more severe barriers, such as a disabled child. Nonetheless, the majority expressed a desire to work and many felt that their needs were not addressed. They referred to repetitive and unconstructive meetings and sometimes to advisers who were unsympathetic and did not respond to their needs."[38]

37. We were told by Adam Sharples, Director General, Work, Welfare and Equality Group, DWP, that lone parents of severely disabled children may be able to stay on Income Support, as if their child receives the higher level (care) component of Disability Living Allowance, they can qualify for Carer's Allowance and thus not have to move onto Jobseeker's Allowance.[39] However, for those lone parents with disabled children who do not qualify for Carer's Allowance, the situation is less clear. Contact a Family raised their concerns that these lone parents may be disadvantaged by the Green Paper's proposals. Director of External Affairs Jill Harrison said:

"there will be families who will not qualify for DLA but whose circumstances mean that they need to be exempted from the requirement to work and we will be calling on Ministers and officials to recognise this in their final proposals."[40]

38. The Green Paper does not explore how the Government's proposals will impact upon lone parents with disabled children but does seek views on this as part of the consultation process. We urge the Government to assess fully the impact of increased conditionality on lone parents with disabled children and ensure that appropriate and flexible employment support and opportunities are developed for them.

Ethnic minority groups

39. The disadvantages faced by some ethnic minority groups have been acknowledged in previous research and policy reviews. Research by the Joseph Rowntree Foundation highlighted some of the issues faced by ethnic minority groups in the UK labour market, looking at the relative positions of ethnic groups between 1991 and 2001. It reported that:

"Employment rates increased most for Black African, Pakistani and Bangladeshi men, largely due to improvements in their educational attainment. However, substantial employment gaps remain for Black African, Black Caribbean, Pakistani and Bangladeshi men. Women from ethnic minority backgrounds did not close the employment gap with white women to the same extent as ethnic minority men and the employment rates of Pakistani and Bangladeshi women remain very low, at less than 30%."[41]

40. Given the academic and political consensus on this issue, we are disappointed that the Green Paper did not attempt to set out a coherent strategy to tackle the disproportionately low employment rate of ethnic minorities. It states:

"We […] need to tailor new approaches in the localities where ethnic minorities live, including through the Deprived Areas Fund and the City Strategy. We have learnt a lot about outreach and support from both talking to ethnic minority people themselves through our research, and through a range of innovative programmes including Jobcentre Plus outreach programmes, the 'Fair Cities' pilots which link training to job opportunities in Bradford, Birmingham and Brent, and other local pilots run through the private and voluntary sectors. We also want to absorb the lessons from these programmes in our plans to integrate employment and skills provision."[42]

41. We welcome the assurance that local employment strategies will target ethnic minorities but it is crucial that local programmes are able to duplicate the successes of the DWP's discontinued Ethnic Minority Outreach project. In our report on the Government's Employment Strategy we said that:

"Evidence suggests that the Ethnic Minority Outreach programme was working well at improving employment opportunities for people from ethnic minorities, using small local organisations. Since this is to be replaced by the Deprived Areas Fund, we will want to see evidence that organisations contracted to administer the Deprived Areas Fund are working with small local groups to reach the same clientele as the Ethnic Minority Outreach programme did. It is important that the focus on offering employment services to people from ethnic minorities should not be lost, either in Cities Strategy areas or other areas."[43]

42. We pressed the Minister on this recommendation and she told us:

"What I want to look at is how we make sure, whether it is people from ethnic minority communities, particularly those who are most distant from the opportunities we think are present, whether it is others, that we find a way that the contract can have rigour and be paid on outcomes and is mindful of those particular needs in those communities."[44]

43. We urge the Government to ensure that local employment strategies include appropriate support for those from ethnic minorities who are not in work to access labour market opportunities, ensure that work is done with local employers to achieve this, and include specific targets for achieving this objective. It is important that the successes of the Ethnic Minority Outreach Programme are sustained in broader local strategies.

Disabled people

44. The focus of the Green Paper is on jobseekers and lone parents. We accept that the previous welfare reform Green Paper, published in 2006 (and on which we reported in our Incapacity Benefits and Pathways to Work inquiry) set out the Government's proposals for employment support for sick and disabled people.[45] We emphasise, however, the fact that disabled people are not only generally more likely to be out of work, but they are also more likely to leave work and, once out of work, they are less likely to move back into employment than non-disabled people and other groups.[46]

45. We asked the Minister what the Government is doing to address the specific challenges that disabled people, particularly those with mental health difficulties, may face in work and she told us:

"There is some work between DWP and the Department of Health on health and wellbeing and there are various employer/stakeholder forums - I have attended a few - to talk about this issue around occupational health, how better partnerships can support people. There is a Treasury review into issues around those who have mental health conditions but who work too. That is an area which we need to explore about where DWP as a department plays a role but other departments play a role in that too."[47]

46. We agree with the Minister that the DWP needs to explore ways to assist disabled people, particularly those with mental health difficulties, to find and sustain work. We agree that local partnership working is vital and ask DWP to clarify its role and responsibilities in brokering local relationships, and set out which Department is taking the lead in the various cross-government initiatives which are underway.



19   Third Report of Session 2006-07, para 16 Back

20   DWP, Cm 7130, July 2007, p 43 Back

21   Third Report of Session 2006-07, para 230 Back

22   Working for Children - Child Poverty Strategy, March 2007 Back

23   DWP, Cm 7130, July 2007, p 44 Back

24   One Parent Families / Gingerbread press release, July 2007 Back

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

26   Third Report of Session 2005-07, para 345 Back

27   Q 22 Back

28   HC Deb, 19 April 2007, col 784W Back

29   DWP, Cm 7130, July 2007, p 45 Back

30   DWP, Pathways to Work from Incapacity Benefits: A study of experience and use of Return to Work Credit, Research Report 353, May 2006 Back

31   Government Response to the Work and Pensions Committee's Seventh Report of Session 2006-07, published as the Committee's Third Special Report, HC 1054, para 21 Back

32   Oral evidence taken before the Committee on 25 July 2007, HC (2006-07) 940-I, Q 25 Back

33   Every Disabled Child Matters, Between a rock and a hard place, September 2006 Back

34   Taken from the DRC press release responding to Freud, March 2007 Back

35   Every Disabled Child Matters, Between a rock and a hard place, September 2006 Back

36   Taken from the DRC press release responding to Freud, March 2007 Back

37   As above Back

38   DWP, Research Report 423, 2007, p 23 Back

39   Q 26 Back

40   Every Disabled Child Matters Press Release, 19 July 2007 Back

41   Joseph Rowntree Foundation, Ethnic Minorities in the labour market: dynamics and diversity, April 2007 Back

42   DWP, Cm 7130, July 2007, p 51  Back

43   Third Report of Session 2006-07, HC 63, para 281 Back

44   Q 31 Back

45   DWP, A New Deal for Welfare: empowering people to work, Cm 6730, January 2006 Back

46   Fairness and Freedom: The Final Report of the Equalities Review, February 2007 Back

47   Q 9 Back


 
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