Work and Pensions CommitteeWritten evidence submitted by London Borough of Newham

1. Executive Summary

1.1 The London Borough of Newham has, since 2007, provided a highly successful alternative state-funded welfare to work offer to its residents through Workplace, our local employment service. We have worked closely with Jobcentre Plus as a partner over a number of years.

1.2 However, we believe that there are fundamental structural problems in the design of JCP and that unemployed people and employers across the country would be better served by welfare to work services that are commissioned at an appropriately local level, building on local relationships with employers. We encourage the committee to look at the role of local authorities in future welfare to work policy.

1.3 Changes to JCP in recent years have negatively affected opportunities for partnership working, and the organisation is focussed on increasing benefit off-flow, rather than sustainable employment. We suggest that this should be an immediate area for attention.

2. Newham’s Approach and Lessons for National Policy

2.1 Newham is the second most deprived borough in the country, according to the Indices of Multiple Deprivation 2010, a situation that is much unchanged since Charles Booth’s poverty maps over a hundred years ago. It is also the youngest borough in the country, and one of the most diverse places on earth. One of the key challenges our residents face is worklessness. 13.2% of our residents are unemployed, compared with 9% in London as a whole.

2.2 Our response to entrenched social deprivation is to build the resilience of our residents, and work is key to our conception of economic resilience.

2.3 Our analysis in 2007 was that the existing welfare to work infrastructure was not working for our residents. That’s why we established Workplace, our local employment service. In each of the last two years Workplace helped over 5,000 residents into jobs. Our research has found that 75% of these residents are still in work after a year, compared with a 52% national benchmark established by CESI/Inclusion for six month sustainment.

2.4 We believe that Workplace’s business model offers valuable lessons for policymakers. It looks and feels more like a private sector jobs brokerage, offering bespoke support, including training and a personal advisor, to residents, and a matching and screening service, presenting only job-ready candidates, to employers.

2.5 Participation is voluntary, although over half of those supported into employment were previously long-term unemployed (out of work for more than 12 months). We work closely with a number of local partners, including JCP. Although we take around 20% of our referrals from JCP, we are not part of their conditionality arrangements. To ensure fairness for long-term residents Workplace only works with people who have lived in Newham for over a year.

2.6 Over five years of experience have shown us that what employers most want from welfare to work services is a careful screening and matching service with a single named point of contact, similar to the function that a recruitment agency provides to them. We combine this with a public service that focuses resources and training on the long-term unemployed—for example, the caseloads of our officers who work with people who are out of work for over a year are smaller than those working with the more job-ready clients.

2.7 We believe that the success of Workplace demonstrates that employment services are best delivered at a local level. Our engagement with local employers through economic regeneration work, including the planning process, enables us to actively pursue opportunities for local residents in a way that a national service cannot. Our positive offer of a matching and screening service also makes the service more effective at sourcing jobs. We believe that the relationships we build with employers are vital in creating placements that are sustainable for our residents, resulting in the higher sustainability rates stated above.

2.8 By acting as a hub co-locating a number of different services, including careers guidance, money and debt advice, IT support, training, and with links into council services, we are able to ensure residents do not experience a fragmented service. In addition, the separation of our employment support from the benefit system means that we are able to provide a universal service that does not result in stigma for its users.

2.9 We would therefore argue that the Government should consider the devolution of funding for employment services to a local or regional level.

3. JCP Employment Services

3.1 In an area with high unemployment and low skills our belief is that local jobseekers need significant support to compete in London’s highly competitive labour market but that this must be linked to employer engagement over vacancies to deliver what local business needs.

3.2 We are concerned that the result of the current national JCP approach, however, is to push significant numbers of job applications towards employers even where there is a poor skills match, which is the precise opposite of what employers, who simply don’t have the time to sift all of the applications, want to see, and harms the chances of unemployed people finding sustainable work. We believe this is driven by certain targets allocated to both advisors and jobseekers. The Universal Jobmatch website does nothing to counteract this problem, and may in fact worsen it.

3.3 With recent reductions in their resourcing the ability of JCP to engage in meaningful support with jobseekers has been reduced below the already-low level offered in the past. We understand that there is little capacity to offer the in-depth, individual support with job applications that people who are harder to help require in getting back into work. Whilst there may be a national argument for “cutting deadweight” costs by limiting support in the first months of a claim, we feel that in areas with higher unemployment like Newham, and given the rate of churn into and out of employment, help at the early stages of a claim remains necessary.

3.4 Cuts to their resources have also reduced the number of staff that JCP have been able to embed with Workplace, reducing our ability to work in partnership with the organisation.

3.5 Of the “Get Britain Working” measures, the Sector Based Work Academy, which has been delivered in Newham in partnership with the Council at Skills Place, has been broadly positive, operating on a similar basis of employer engagement and up-skilling to Workplace. There have been issues with referral to this scheme, with only an individual’s JCP personal advisor able to make referrals. Workplace also operates its own work experience scheme, “444”, which places residents in work experience roles for four hours a day, four days a week, for four weeks. Whilst in the past this scheme and other similar schemes had the support of JCP, through allowing residents to continue to receive benefit, this support has recently become less consistently reliable.

3.6 We are concerned that alongside reductions in resourcing there continues to be a national emphasis towards increasing off-flows from benefits, as opposed to moves into sustainable employment, which we believe negatively skews the incentives of the organisation. The anecdotal accounts we receive from our residents inform us that they view the customer experience at Jobcentre Plus as stigmatising and at times de-motivating, possibly as a result of this national emphasis.

3.7 Finally, because JCP contracts externally for much of the support services it does provide, our understanding from residents is that often that support is either offered to jobseekers too late, or is not taken up because of cold referrals.

23 May 2013

Prepared 27th January 2014