Welfare-to-work in the UK Paul Convery Mike Stewart Centre for Economic and Social Inclusion, London

Social justice in Blair’s 2 nd term: main goals Economic Full employment across all regions Higher productivity Stable growth Social Sustainable neighbourhoods Eliminate child poverty by 2020 Family stability

New policies in a full employment economy  Not solving mass unemployment any longer  focus on harder to help populations  conditionality  aiming for retention and progression  employers: labour market blockages  geographical concentration

Strategy since 1997  bridge the gap between out-of-work and in-work incomes;  specific programmes to bring target groups of non- employed people closer to the labour market;  improve employability of non-working population to compete for work effectively;  concentrate on areas of high unemployment;  improve the effectiveness of Government agencies and subcontractors;  strengthening rights at work.

New Deals ( ) New Deal for Lone Parents (£110m) New Deal for Young People (£970m) New Deal 25+ (£220m) New Deal for Disabled People (£40m) New Deal for Partners (£20m) New Deal 50plus (£20m)

New Deal since ,500 entrants (of which 72% male; 12% disabled; 14% ethnic minority) Leavers 39% to sustained, unsubsidised jobs 11% transferred to other benefits 30% left for 'unknown reasons‘ 20% left to 'other known destinations'.

New Deal 25+ since ,600 entrants (of which 84% male, 21% disabled; 27% aged 50+) Leavers Sustained unsubsidised jobs: 15% Other benefits: 9% Other known destination: 5% Unknown destination: 7% Return to JSA: 40%

New Deal for Lone parents Attended initial interview: 212,490 Agreements to proceed to New Deal: 188,500 Total job entry: 77,140 (41% of agreements)

New Deals need to improve  Less than 40% of all entrants get sustained jobs (18- 24)  Only 15% get sustained jobs (25+)  ¼ of entrants get un-sustained employment  marked geographical variations in outcomes  least employable are being helped less  ethnic minority job entry – up to 40% lower than for white participants  27% of current participants are re-entrants (18-24)

Trends in benefit claims

Welfare to work: new priorities  higher performance;  a “flexible and efficient” system – “Jobcentre Plus”  harder to help: lone parents, sickness & disability benefit claimants, adult long term unemployed, ex- offenders, drug misusers  identification and intensive support, basic skills  retention and progression  focus on employer needs (specific and generic)  sectors – retail, construction, IT  promoting diversity  disadvantaged neighbourhoods

Transitional Work in the U.K. Mike Stewart C.E.S.I.

Origins 1979 ‘Labour isn’t working’ - 1million First recession of the 80’s - 3million Community Programme Wage plus community benefit No training and poor job outcomes Participants liked it

Origins Glasgow mid 80’s - massive long term structural unemployment Wise group Intermediate Labour Market Mainly 25+ and male Wage+training+support+jobsearch High job outcome rate 60%+

Developments to 1997 Wise group model Glasgow Works model Report-Regeneration Through Work Other industrial cities Liverpool, Nottingham, Manchester, Newcastle,Sheffield, Hull Franchising of the models

Developments post 1997 Employment Zones-Neighbourhood Match Social exclusion Neighbourhood renewal Health, Education,Crime, Environment Community jobs? March Transitional Employment

Current position research 5,500 jobs – 9,000 throughput per year Clustered in large industrial cities Average Gross cost per person £14,000 70% are % drop out rate Outcomes average c50% into jobs 90% in work longer then six months £1500 p.a. earnings higher then other programmes

Key Issues Cost - is it value for money? Is it make work or real work? Bottom up or top down? Sustaining job outcomes for the very hardest to reach. Employment of last resort? Does it work better then time limits?