1.Jobcentre Plus (JCP) is a core part of support provided by the Department for Work and Pensions (DWP/The Department) for jobseekers in receipt of unemployment benefits and Universal Credit (UC). It provides employment advice and uses knowledge of local labour markets to match unemployed claimants to suitable job vacancies. It is also responsible for applying conditionality to the receipt of benefits. JCP currently serves around 700,000 unemployed claimants through its network of 713 Jobcentres in geographical districts across England, Scotland and Wales. In Northern Ireland, similar services are delivered through the network of Jobs and Benefit Offices.
2.JCP’s services sit alongside contracted-out welfare-to-work provision, whereby private and third-sector organisations are responsible for providing employment support to some individuals. Such provision has been a feature of employment support in Great Britain since the 1990s. Since 2011, the Work Programme has been the main such programme. Specialist provision for disabled people is also available through the much smaller Work Choice scheme. A range of further, smaller schemes are commissioned locally: for example, through Local Authorities. The Welsh Government commissions some of its own programmes, and provision to devolve welfare-to-work to the Scottish Government is contained in the Scotland Act 2016. Provision is also devolved in Northern Ireland.
3.Reducing the welfare bill and getting people into employment remains a key priority for the Government. In many respects, however, the labour market now is very different from when the current welfare-to-work arrangements were established in 2010–11. The number of people claiming unemployment related benefits halved between 2010 and 2016 (see Figure 1). Yet an increasing proportion of the unemployed have been so for an extended period: the proportion of claimants who have been on Jobseekers Allowance (JSA) for six months or more is three times higher in 2016 than before the 2008–09 economic recession. A total of 15% of JSA claims lasted more than two years in 2016, compared with 4 to 6% before 2008 (see Figure 2).
Figure 1: Trend in unemployment-related benefit caseload in England, Wales and Scotland, January 2001 to February 2016
The number of people claiming JSA increased by a third within six months of the 2008–09 recession starting, and started to fall in 2013.
Figure 2: Long-term claims as a share of total JSA claims (excluding Universal Credit) in England, Wales and Scotland
The proportion of long-term JSA claimants is three times higher today than before the 2008–09 recession.
4.The Government has also pledged to halve the disability employment gap by 2020 (see Figure 3). At current rates of employment this will involve helping around 1.5 million disabled people into work, and improving the rate of employment for people with disabilities a much faster rate than for the general population.
Figure 3: Disability employment gap, 1999–2015:
Source: Resolution Foundation Analysis of the Labour Force Survey.
5.While the Work Programme is performing generally as well as the programmes it replaced, a large majority of participants—almost 70%—spend up to two years on the programme without finding a job, at which point they return to JCP. In most cases, this would mean JSA claimants had also spent between nine and twelve months receiving support from JCP only, prior to referral to the Work Programme. The Work Programme has also worked better for some claimant groups than others. Outcomes are particularly poor for ill or disabled Employment and Support Allowance (ESA) claimants, who can be mandated to the Programme if they are in the Work-Related Activity Group (deemed closer to employment than those in the alternative Support Group). While around one in four JSA claimants obtain a job after referral to the Work Programme, the same can only be said of one in seven new ESA claimants and one in sixteen in the ESA ‘Other’ category, which includes former Incapacity Benefit claimants. In contrast, the much smaller, specialist provider-led Work Choice achieves much better results. 59% of individuals referred to it in 2014–15 moved into sustained employment.
6.The 2015 Spending Review announced resources and programmes designed to increase employment:
7.These changes take place alongside the introduction of UC, which is merging six working-age benefits—including the income-related elements of the two main unemployment benefits, JSA and ESA—into a single payment. UC will also affect the way JCP delivers its services. It is intended to be a mainly online application process, supported by job-searching and job-matching on an online-based vacancy system, Universal Jobmatch. UC will be paid to both working and non-working claimants. It will include an in-work progression service, through which JCP will support low-paid claimants to take steps to increase their earnings to at least the equivalent of 35 hours per week at the National Living Wage. A full JCP-led in-work progression service could apply to around one million working people.
8.The scaling down of contracted provision and the shift to UC will therefore alter the caseload of people that JCP is expected to support, and the sorts of provision that it is required to make. Many claimants who would have been referred to contracted-out provision will instead be supported “in house”. This will include higher proportions of individuals with health conditions and disabilities, and people who are long-term unemployed.
9.Allied to wider economic trends, JCP has performed well in recent years in supporting claimants who are closer to the labour market into work. It is, in part, a victim of its own success, as to further reduce unemployment, it must now focus on ensuring that it has measures in place that can offer equally effective support to a caseload of claimants with much more varied, complex and substantial barriers to work.
10.JCP faces a significantly different context since our predecessor Committee reported on The role of Jobcentre Plus in the reformed welfare system in 2014. In our inquiry we here aimed to identify potential barriers to JCP’s success in meeting its new challenge of providing high quality, effective employment support to a complex caseload of claimants in house, and to recommend how it should overcome these. Within this framework we also sought to identify how the Department can better understand what works in supporting these claimants into work. We are grateful to everyone who has contributed to this inquiry. In the text our conclusions are set out in bold, and our recommendations, which require a Government response, are set out in bold italic.
1 This includes the number of people claiming JSA or Universal Credit principally for the reason of being unemployed.
2 National Audit Office ()
3 Gardiner, L. and Gaffney, D., , Resolution Foundation June 2016, p.19. This number assumes that there will be a corresponding growth in the non-disabled employment rate, according to forecasts from the ONS.
4 Gardiner, L. and Gaffney, D., , Resolution Foundation June 2016, p.18
5 Work and Pensions Committee, , Session 2015–16, HC 363, para 87. Note: the 70% figure refers to all participant groups in Work Programme.
6 DWP, , December 2012, p.6
7 DWP, , June 2016
8 DWP, , May 2016
9 HM Treasury, , Cm 9162, November 2015, para 1.129
10 HM Treasury, , Cm 9162, November 2015, para 1.129
11 Work and Pensions Committee, , Session 2015–16, HC 549, May 2016, para 3
12 Work and Pensions Committee, , Session 2013–14, HC 479, January 2014
7 November 2016