1. Re-thinking Welfare to Work Steve Fothergill National Director, Industrial Communities Alliance Professor, CRESR, Sheffield Hallam University

2. WHAT’S GONE WRONG? (1) Blind to weak local economies Welfare-to-work is based on assumption that if claimants can be encouraged to look for work, they’ll find work Welfare reform is based on assumption that claimants need to be incentivised to look for work The reality in older industrial Britain: – Too few jobs to go around – Successful jobseekers find work at expense of other local jobseekers – Vast majority have always been better off in work – Worklessness is the result of years of job destruction

3. Out-of-work benefit claimant rate

4. WHAT’S GONE WRONG? (2) A Work Programme that’s barely working For JSA claimants the Work Programme is on target! – But official target is that only 36% find sustained employment – So 64% don’t…….. Performing as well as predecessors! – But not that much better, if at all – And not sufficiently well to justify the hype Nearly 50 per cent of providers consider the Work Programme ‘very ineffective’ or ‘somewhat ineffective’

5. WHAT’S GONE WRONG? (3) Failing the sick and disabled Incapacity claimants – these days on ESA – make up the big numbers in older industrial Britain The Work Programme is letting them down – Only around 6 per cent of ESA claimants who have shifted over from IB find sustained work after two years – Only 11 per cent of new ESA claimants find sustained work – DWP targets have not been hit in every region “The Work Programme funding model is set up to offer a minimal service and poor outcomes for participants who claim ESA” (CESI)

6. WHAT’S GONE WRONG? (4) All stick and no carrot Little investment in skills and training, or in health management – mostly seen as ‘too expensive’ Polish your CV! Practice your interview technique! Send off more job applications! And if you don’t, you’ll be sanctioned – Benefit sanctions now running far ahead of level under Labour – Not far short of a million a year Work Programme participants are almost twice as likely to receive a benefits sanction as to secure a job outcome

7. WHAT’S GONE WRONG? (5) Squeeze, and squeeze again Welfare reform is generally hitting the same people who are being failed by welfare-to-work – Housing Benefit cuts in the private rented sector – ‘Bedroom Tax’ – New medical tests – Means-testing of ESA – Council Tax Benefit cuts – Reductions to DLA – mostly still in pipeline – Below inflation up-rating This is a vendetta against the most disadvantaged in society

8. Decentralisation: more of the same? The new consensus? – Devolve welfare-to-work commissioning to LEPs, city regions, devolved administrations More sensitivity to local circumstances and local players, but: – Same old supply-side assumptions? – Same failure to invest in skills and health? – New faces, same claimant experience? Shifting responsibility from Whitehall won’t work unless there is also a radical shift in what is expected and delivered

9. A better way forward 1. Grow the local economy where jobs are hard to find – Rebalance towards industry and the regions – Spend some of £1bn a year that goes on Work Programme on local economic development instead 2. Re-focus welfare-to-work on skills and health – Less leaning hard on the unemployed, more investment in their employability 3. Introduce a targeted job creation programme – More routes back into work – Build on the positive experience of the Future Jobs Fund 4. Rein in compulsion, work by consent