Changed strategy; new perceptions Election in a watershed between 2 different approaches: –Measures designed to drive down wages –A strategy that aims to increase employment rates to reduce poverty But both approaches characterised by activation measures underpinned by threatened benefit penalties

3 elements to UK approach Improving employability Activation measures Tax and benefits reform - making work financially worthwhile

Changing claimant population JSA claimants: 1.0m Sick and disabled: 2.9m (0.8m want to work) Single parents: 0.9m (0.5m want to work)

Employment growth  Employment increasing by 330,000 per year Unemployment decreasing by 170,000 per year (ILO measures and JSA count) Economic inactivity decreasing

Current priorities –JSA claimants –younger long term unemployed –"Rights and responsibilities" intensified –Importance of the Personal Adviser –limited services for short term unemployed –intensive services for long term unemployed - increasing with duration –duration of unemployment as main identifier of need for intensive assistance

New priorities 25+ "New Deal" programme after 18 months unemployment initial work focussed interviews for all claimants to the social security system new agency combining PES and Benefits Agency more emphasis on non-JSA population

Benefit penalties Historic mutual obligations between State and Jobseeker Not systematically checked until 1986: Restart process, availability and actively seeking work tests 1990: "Stricter Benefit Regime" 1996: introduction of JSA Anti-fraud initiatives

Boosting confidence: are sanctions effective?  Do jobseekers understand the system of penalties?  Does a sanctions regime encourage purposeful activity?  Is sanctioning behaviour consistent (independent adjudication - moved back from the front line)  Customer resistance

New Deal 18-24, sanctions Sanctions by option: 1st quarter 2000, expressed as % of all participants during period (total sanctions = 5,029) –Employer option: 3% –Education and training: 9% –Voluntary sector: 13% –Environment task force: 28%

Boosting confidence: sustained job entry  Vacancy selection - better matching and screening  Employer, demand-led approach  Post placement services

Boosting confidence: higher quality PES services  more individualised service  more flexible service  improved use of information technology  change in the perception of the PES - improving market share  addressing barriers to employment