Get Britain Working:

Employment Support Reform

Eamonn Davern Head Jobcentre Plus International Relations Gdansk January 25

th

2012

The problem

•most who come onto benefit leave quickly – over half within 3 months… • …but some get stuck and need more support to avoid long term unemployment Proposition… • it costs a lot to keep people on benefit – could we spend some of that to help people back to work?

The Work Programme

• Biggest of its kind the UK has ever seen • For those at risk of long term unemployment • 2.4 million expected referrals • Replacing much of the complex range of poor value existing provision • Flexibility, results focus, partnership working

How will the Work Programme be better?

• Longer to work with customers • Black box (but transparent, with safeguards) • Integrated – All JSA and ESA customers can access • More sophisticated payment model

Payment model

Payment (£) *Incentive payments Time on Programme (Weeks)

Universal Programme

Customer Groups

•

JSA customers aged 25+

•

JSA customers aged 18-24

•

JSA ex-IB

•

JSA seriously disadvantaged in the labour market

•

All ESA customers

•

ESA (income related) customers who are placed in the Work Related Activity Group Time for referral From 12 months From 9 months From 3 months From 3 months Voluntary at any time When customers are expected to be fit for work within 3 months

Differential pricing: Maximum payments £15,000 £14,000 £13,000 £12,000 £11,000 £10,000 £9,000 £8,000 £7,000 £6,000 £5,000 £4,000 £3,000 £2,000 £1,000 £0 £2,200 £1,200 £400

1. JSA 18-24

£2,800 £1,200 £5,000 £1,200 £5,000 £1,200 £2,300 £1,000 £4,700 £1,200 £400

2. JSA 25+

£400 £400 £400

3. JSA Ex-IB 4. JSA 5. ESA seriously disadvantaged volunteers

£600

6. ESA Flow

£9,600 £3,500 £600

7. ESA Ex-IB

Sustainment payments Job outcome payment Attachment fee

Avoid paying for ‘do nothing’ outcomes

• Some would find jobs without help • Will only pay for a job outcome for the unemployed after 6 months in work • Providers have to beat ‘do nothing’ outcomes to keep contracts

10. Paying for results out of benefit savings

Cohort of customers on benefit

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0 4 8 12

Saving from normal off-flow without intervention

16

Additional saving from Work Programme Remaining cost of paying benefits

Months 20 24 28 32 36

Prime providers

• At least 2 per contract package area • Will compete for market share • 7 year contract – long term relationships • Greatest ever freedom and financial incentives to succeed

In conclusion

• Real innovation • Powerful incentive to help people into work • With other welfare reforms real chance of success