The Work Programme isn’t working


 

Bill Davies is a research assistant at IPPR North

Today, the first tranche of data on the government’s flagship welfare-to-work scheme, the Work Programme, were released by the Department for Work and Pensions to surprisingly little fanfare.

DWP-in-the-shadowsA glance at the DWP Press Department’s Twitter account showed the Department were out on the defensive before the data was released. Looking at the data, this is not a huge surprise. The headline figures show that from the 836,000 long-term unemployed who joined the programme, only 3.73% found work lasting 13 or more weeks (the measure of a job outcome).

Assessing raw programme figures is not without its share of risk, and being fair to the DWP, these figures depress actual performance. For instance the most recent attachments to the programme (May, June and July of this year) could not have registered a 13-week employment outcome. It is a statistical impossibility, and as a consequence those joining in the final three months should be removed from the data.

This is a large number of jobseekers to factor out (144,000), and once this is taken into account the figures come in at the higher rate of 4.5%. However, this is still 1% below the government’s minimum requirement of 5.5% for the programme’s first operating year – and is also below the 5% non-intervention ‘deadweight’ rate, the level at which participants would have found a job anyway.

The figures need to be put into context. The best estimator of how a programme will perform is to look at how similar programmes perform in similar circumstances. The key example is the Flexible New Deal, a programme introduced by the Labour government in 2009, but scrapped by the coalition in the summer of 2011 after then employment minister Chris Grayling (in November 2010) described it as “chronically mismanaged and fundamentally flawed”.

Nevertheless in all of its essentials, the Work Programme is identical to its precursor, the Flexible New Deal. Both are delivered by private and voluntary sector prime contractors who work with the long-term unemployed when they have been in receipt of the Jobseeker’s allowance for 12 months. (See Deacon and Patrick, 2012).

The cumulative proportion of participants to employment outcomes for the first 14 months of both programmes are shown in the graph below:

Work-Programme-v-Flexible-New-Deal-first-14-months-effectiveness
The graph shows the Flexible New Deal – which itself was introduced during part one of the double-dip recession – achieved better results; the cumulative proportion of job outcomes for the first 14 months using the same methodology was 12.4% against the Work Programme’s 4.5%.

Despite an apparent ‘slow start’, the Flexible New Deal appears to have more rapidly attached the unemployed to 13-week spells of employment than the Work Programme over their respective initial 14-month periods.

It should be noted, however, that over the 23-month life of the Flexible New Deal, contractors were assigned a national target of moving 55% of jobseekers into 13 weeks of employment, and only managed 18.4%. The more modest targets for Work Programme providers were a sensible step, but may, on the basis of the first 14 months, still be unattainable.

There are two important points to recognise in the debate about welfare-to-work:

First, the abandonment of one programme only to replace it with another near-identical ‘reform’ creates unnecessary disruption in the performance of programme providers and in the lives of jobseekers; the former find themselves having to establish a new network of contacts with local employers, and the latter who find themselves during transition periods passed from provider to Jobcentre Plus, and back to a new provider.

Reform for politics’ sake will not cure unemployment.

The second is that work-first is a type of active labour market policy that assigns responsibility for unemployment on deficiencies in the employment habits and experience of the unemployed themselves. In a labour market where even entry level vacancies are in short supply, the employment profiles of the unemployed are likely to worsen and their benefit claims will lengthen.

Work-first as a policy thus becomes self-defeating.

This assertion is not new; Jamie Peck’s seminal book on welfare-to-work stated in 2001:

“The purchase of the work-first policy package is weakest in precisely those areas where effective welfare-to-work programs are needed most: high unemployment areas.”

Pass it around Whitehall.

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  • LB

    So what’s the cost per job created?

    Ah yes, we don’t put a cost on it. After all, if people found how much we’ve spent, they would complain about the bill (with interest).

    However, since you’re bankrupt (4.7 trillion on the state pension alone), why not carry on spendign people’s pension money. It’s not that they are going to get a pension since you’ve bankrupted the UK along with all the other parties.

    Far better to not spend the money, and not tax those earning min wage.

  • Mark Patrick Norris

    Where the Councils pay Housing Benefit, Council Tax to the JOBSEEKER as the
    jobseeker he/she goes to his or her local Council Office to take a ticket
    and a safe seat and waits for his or her number to be shown Jobseeker he/she
    then proceed to the desk to be greeted by a civil servant is it housing
    benefit and council tax you would like to CLAIM?.. Said the civil servant

    Jobseeker said YES BOTH benefits.
    Civil servant said we’ve had a very easy SOFTWARE upgrade without
    shouldering the costs. This is when you surge forward and grow. I feel I am
    surging forward and growing at a pace that I have never experienced before
    said the civil servant as we can now offer you 4 benefits instead of two.
    Jobseeker said what are these new benefits that you can offer me?

    Civil servant said pension credits and job seekers allowance of £100 pw in
    return you work for your well fair road sweep removing chewing gum removing graffiti.Jobseeker said anything else?

    Civil servant said SHUT DOWN OF DWP shut down of all jobcentres shut down
    of all providers shut down of all call centers SHUT DOWN SHUT DOWN SHUT DOWN.
    Many Thanks
    Mark Patrick Norris
    http://www.markpatricknorris.net

  • treborc1

    Of course you have to have the jobs to offer, each time I go down the lady who see me, who is my disability adviser, just says come back in a month, and the simple fact if you walk into my job center all you get are people behind desks who have no time to even look at you, your given three jobs which are listed, you check on them from a free phone and the voice on the other end will say that job offer ended months ago.

    In my area we have twenty two jobs offers,most are short term for a six week period and will pay only commission, not a lot on offer.

  • Newsbot9

    Shame that the cost per job created is tracked, and you’re talking nonsense.

    And yes yes, you refuse to pay a pension, politician. Easier to trouser the cash and then rum.

    And that’s right, you want to raise the poverty premium and replace the low tax bill on minimum wage people with a larger one every time they have a health concern or have a kid or…

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