The Department for Work and Pensions (DWP)’s intention to introduce an employment support service for in-work claimants of Universal Credit (UC) holds the potential to be the most significant welfare reform since 1948. If this great potential is to be realised, the DWP needs to nurture teams of Jobcentre Work Coaches carefully. This will require learning on the job, which any reform of course requires, but is even more necessary here in that no one has presented us with evidence of such a reform being operated anywhere else in the world. Further, as any department only has a certain pool of talent to drive reform, an important part of the DWP’s welfare reform talent now needs to be directed at developing the full potential of this employment support service for people already in work.
The service will encourage working claimants to increase their earnings through taking on extra work or being paid more. Claimants will be required to take mandatory actions to these ends. While such support and requirements are common for out-of-work claimants, for in-work claimants this is a radical policy departure. The in-work service is potentially revolutionary, promising progress in breaking the cycle of people stuck in low pay, low prospects employment. We congratulate the Government for developing this innovation.
Given there is no comprehensive evidence on how to run an effective in-work service, the DWP will be learning as it develops this innovation. It is therefore right to start with a relatively small-scale scientific trial. The Department is piloting an in-work service led by Jobcentre Plus (JCP) which aims to support low-paid claimants of Universal Credit to increase their earnings to at least the equivalent of 35 hours per week at the National Living Wage, and ultimately become financially independent. It must help confront the structural or personal barriers in-work claimants face to taking on more work, such as a lack of access to childcare and limited opportunities to take on extra hours or new jobs. Employed people self-evidently do not lack the motivation to work and we would therefore expect the use of financial sanctions for in-work claimants to be on a different scale to those imposed on out-of-work claimants. A successful in-work service will also require partnership between JCP and employers to a degree not seen before. It is a very different kind of welfare.
JCP Work Coaches will be central to delivering a successful in-work service. Supporting in-work claimants will require Work Coaches to have additional and enhanced skills; in fact to become a new kind of public servant. Should the pilot be developed into a full national service, around one million working people will be subject to some form of in-work requirements. This will be resource-intensive at a time when DWP budgets are stretched.
While UK unemployment has fallen in recent years, underemployment, where employed people wish to work more hours, has remained stubbornly high. The UK’s productivity lags behind other major economies. This challenge is much broader than supporting the lowest paid part-time workers and is a clear case for extending it further up the earnings scale. If in-work progression is to be successful, and its great potential achieved, it will require broad and continuing political support.
Prepared 06 May 2016