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Welfare-to-work in the UK

Paul Convery

Mike StewartCentre for Economic and Social Inclusion, London

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Social justice in Blair’s 2nd term: main goals

Economic• Full employment across all regions• Higher productivity• Stable growth

Social• Sustainable neighbourhoods• Eliminate child poverty by 2020• Family stability

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June 7th 2001 UK General Election

0% 20% 40% 60% 80%

Labour

Conservative

Liberal

Others

Votes

Seats

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Turnout at UK General Elections(1945-2001)

55%60%65%70%75%80%85%90%

1945

50 51 55 59 64 66 70 74-1

74-2

79 83 87 92 97 2001

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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

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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.

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New Deals (1997-2001)

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)

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New Deal 18-24 since 1998

628,500 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'.

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New Deal 25+ since 1998

358,600 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%

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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)

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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)

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Trends in benefit claims May 1997 May 2000 Reduction in the

number of people claiming

Jobseeker’s Allowance

1.56m 1.07m 490,000 32%

Incapacity Benefit 2.37m 2.26m 110,000 5%

Housing Benefit 4.64m 4.03m 610,000 13%

Lone Parents on Income Support

1.01m 0.91m 100,000 10%

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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

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Transitional Work in the U.K.

Mike Stewart

C.E.S.I.

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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

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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%+

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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

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Developments post 1997

• Employment Zones-Neighbourhood Match

• Social exclusion

• Neighbourhood renewal

• Health, Education,Crime, Environment

• Community jobs?

• March 2001 - Transitional Employment

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Current position - 2000 research

• 5,500 jobs – 9,000 throughput per year• Clustered in large industrial cities• Average Gross cost per person £14,000• 70% are 18-24• 20-30% drop out rate • Outcomes average c50% into jobs• 90% in work longer then six months • £1500 p.a. earnings higher then other programmes

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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?