1

“Active Labour Market Policies in the UK – What lessons can be learned from

the British Experience?”

Helen Bache

UK Department for Work and Pensions

CICERO FOUNDATION

PARIS, 23 FEBRUARY 2006

2

WHAT HAVE WE DONE?

3

Employment Rate

62

64

66

68

70

72

74

76

78

Perc

enta

ge o

f Wor

king

Age

Pop

ulat

ion

(%)

4

Comparing the UK with the EU:

UK EU

Employment Rate 71.6% 63.3%

Men 77.8% 70.9%

Women 65.6% 55.7%

Older 56.2% 41.0%

Unemployment Rate 4.7% 9%

Women 4.2% 10.2%

Youth 12.1% 18.7%

Long Term 1.0% 4.1%

Source: Employment in Europe 2005, Eurostat

5

Wider International Comparison

Source: OECD

0

10

20

30

40

50

60

70

80

Pe

rce

nta

ge

Em

plo

ye

d

0

2

4

6

8

10

12

Pe

rce

nta

ge

Un

em

plo

ye

d

Employment 2004 Unemployment 2004

6

HOW HAVE WE DONE IT?

7

Success in the labour market is built on solid foundations

• Macroeconomic Stability

• Flexibility and diversity

• Making work pay

• Active Labour Market Policies– Jobcentre Plus – New Deals

8

Macroeconomic stability

• Macroeconomic stability is the platform from which countries can achieve high levels of employment.

• The new macroeconomic framework introduced since 1997 has delivered stability and growth in the UK – creating the right kind of environment for employment to flourish.

• A stable economy is necessary for high levels of employment, but not sufficient.

9

Flexibility and diversity

United Kingdom

0%

10%

20%

30%

40%

50%

60%

0 20-24 36 40 44

Germany

0%

10%

20%

30%

40%

50%

60%

0 20-24 36 40 44

France

0%

10%

20%

30%

40%

50%

60%

0 20-24 36 40 44Italy

0%

10%

20%

30%

40%

50%

60%

0 20-24 36 40 44

11 % work40 hours

29% work40 hours

11% work39 hours

39% work40 hours

10

Part Time Workers

8%

74%

2%

16%

Could Not Find a Full Time Job Did Not Want a Full Time Job

Ill or Disabled Student or at School

11

Making work pay

• Work incentives are important to make it worthwhile for individuals to participate in the labour market, particularly for those on low incomes.

• The Government strategy to make work pay is designed to tackle the unemployment trap and the poverty trap.

• Reforms to income tax and National Insurance Contributions and the introduction of the National Minimum Wage and tax credits improve incentives to work for low income households.

12

Active Labour Market Policies

• Jobseeker’s Allowance– Rights & Responsibility agenda– Assisted job search– Increased help as duration increases

• New Deal– Ends long term unemployment– Gateway to training/retraining– No other option

13

Modern Jobcentre Plus services

Self-service and face to face advice brought together

14

RESULTS

• Around 60% of unemployment benefit claimants leave the register within 3 months

• Around 80% leave within 6 months

• Around 90% leave within 9 months

• Around 95% leave within a year

15

Jobseekers Allowance Caseload Over 1 Year

0

100

200

300

400

500

600

700

1997

1998

1999

2000

2001

2002

2003

2004

2005 De

c

Aged 18-24 on JSA over 1 yr

All Ages on JSA over 1 yr

16

MAIN SUCCESSES

17

Key success factors

• Jobcentre Plus – single point of delivery for benefits and help into work

• Compulsory work focussed interviews and specially trained advisers

• Something for something – rights and responsibilities

18

Future challenges

• Our 5 year strategy, published earlier this year, set out our long-term aspiration to increase our employment rate to 80%.

• If we are to meet our aspiration of an 80% employment rate, we would need to increase the number of people in employment by around 2.5 million.

• 5 year strategy and Green Paper are available on our website at www.dwp.gov.uk

19

ANY QUESTIONS?