Matthew Oakley @ PXeconomics matthew.oakley@policyexchange.org.uk 10/07/13

1. Matthew Oakley@PXeconomicsmatthew.oakley@policyexchange.org.uk10/07/13 Parking the hardest to help: short and long-term solutions

2. Welfare reform and the coalition • Plenty of action – but lots still to come. • UC roll-out and how it fits with Work Programme and Jobcentre Plus • On-line claims • Financial capability • Local Support Services Framework • Overall seems that plenty of leg-work on benefits and conditionality has been done – but support still not caught up. So whatmight future of employment support look like??

3. Overview - Jobcentre Plus • JCP is effective at processing large numbers of claimants quickly and cheaply. • Key issues: • How support is determined • How success is measured • Resources are low • Means that overall, JCP is poor at identifying and targeting help at the most at risk or providing a personalised service. • Criticism of the system – not of JCP management or advisors

4. How level of support is determined • The support and advice for unemployed general determined by length of benefit claim and type of benefits being claimed. • Claimants judged to need most support sent to Work Programme – but are these really the people that need most support? • Overall, some of those furthest from labour market have to wait up to a year to get the help they need. By this time disadvantages have deepened, motivation has been sapped and significant new barriers to work will have arisen.

5. How success is measured: 75% off benefit in 6 months?

6. Overall - JCP • Little personalisation of support • Targeting the wrong thing – which means that outcomes not as good as headline stats would imply and cant compare with Work Programme • Significant cost and social implications • Improvements are happening...BUT will they ever be enough? What about the Work Programme

7. Headlines • Performance getting significantly better (as expected) • Variation across groups concerning • Contracts also squeezing out smaller players from supply chain?

8. Not surprising • Every person going on to Work Programme has failed to find a job with previous support. Always going to be difficult

9. Parking a problem? • Politically and socially yes - Economically, no. • Simply targeting resources in a way that will help the maximum number of people into work. This means that it will occur: • Across payment groups; and • Within payment groups. • But once that is accepted, need to do something more for those who are in that group.

10. Problems with current system of support for jobseekers • Little identification of need / personalisation • Some will be left without support for extended periods of time • Problems with how it fits with the wider welfare reforms going through – Particularly UC • Are some people “too hard to help”? What’s the alternative?

11. Personalisation / segmentation from start of a claim • Australian style Jobseeker Classification Instrument

12. Need to go further than Australia • Greater data gathering from the claimant.At present, advisers at Job Centre Plus know little more than a claimant’s basic details (e.g. ATOS ex-IB data). Pool other resources (e.g. access to other govt. data (NHS, police, justice system, etc.) • Greater use of profiling data. Information services, marketing and credit rating firms all gather large quantities of information on their In the same way, use of credit agency criteria, mortgage assessment tools and other data analysis techniques can be used to identify which clients are at most risk of long-term joblessness. • Allow personal advisers more power to identify at risk claimants.The available evidence suggests that personal advisers are better able to assess a claimants’ likelihood of long term unemployment the more experienced they are and the more time they spend with the client.

13. What this means in practice • Creating a smaller, ‘one stop shop’ centre, CommunityLink. That provides gateway to government services and, for jobseekers, includes initial (day one) assessment made. Jobcentre Plus retains essential role in employment services. • For the claimant: • Claimants needing little intervention would have standard JCP offer • Claimants who require support would be sent to private/ third sector providers.

14. What this means in practice For Work Programme providers • Contact payments would then be based on segmentation model • More difficult someone is to help – the greater the contract payment • To ensure fit with Universal Credit - contract payments based on earnings, rather than employment

15. But parking of some claimants will still be inevitable… • Segmentation model will never be perfect (and if it was, politics of increasing money in Work Programme are difficult). • Some claimants are never going to be economic under PBR. • Two years might be too little time. Suggests that we need a different programme to run alongside Work Programme • Referral from Providers • Different payment structure (upfront) • Longer time • Opportunity to bring in social enterprise / ILMs • Opportunity for post-Work Programme support

16. Entry points to the Route2Work for the hardest to help

17. Summary • Reform needed to: • Personalise employment support • Make sure support given as early as possible • Provide support to those groups currently unprofitable • Align employment support with Universal Credit • Remaining questions: • Joined up welfare • “Too hard to help”

18. Our next stages of work • Work Programme 2.0 • Social networks: what people/points of contact influence peoples attitudes to work? • Joining up welfare across Whitehall Contact me: matthew.oakley@policyexchange.org.uk Previous reports: www.policyexchange.org.uk/welfarereform

19. Payment group 3 referrals to Work Programme as % of claimant count