Writing for PoliticsHome, Mark Hoban says the bottom line of the Government's work programme has to be the people.
No-one should underestimate the scale of the challenge of tackling long-term unemployment. Between 2008 and 2010, long term unemployment doubled and we know from past experience that it continues to increase long after a recession, scarring communities and hampering the health of the individuals affected.
That’s why when this Government came to office we launched the Work Programme. It’s the biggest back-to-work scheme the country has ever seen and it’s already helping hundreds of thousands of people who aspire to get a job and get on in life.
The Work Programme is different from any previous scheme. Its focus is not just those people on Jobseekers Allowance, but the hardest to help. Those people on sickness benefits for more than 15 years or come out of prison. In short, we wanted it to help those people who had been abandoned. Off the figures, out of sight and out mind.
We also wanted it to demonstrate value for money. Unlike previousschemes, which paid large amounts of money up front to private sector organisations regardless of whether they got people back to work, we pay providers dependent on results - when they get someone into work and make sure they stay there. We have put an end to providers cashing in by parking someone in a job for a few days and then losing interest, as so often happened in the past.
Today we’ve published the first detailed performance statistics on the scheme, and they show it is already making a difference.
So far, 56 per cent of those who started on the scheme in June 2011 have come off benefits, with 19 per cent spending at least three successive months off benefits. That’s important because the scheme is partly paid for in benefit savings.
What’s more, over 200,000 people have already been found some work, according to data published by the welfare to work industry body, the Employment Related Services Association (Ersa).
By July 2012, barely a year after the scheme began, 31,000 people had already stayed in work for long enough for our providers to claim an “outcome payment” - for keeping someone in work for six months, or three months in the case of the very hardest to help. The figures from ERSA show that there are many more outcomes payments in the offing as people work their way through the programme. We also know that because our validation checks are so robust - to ensure taxpayers’ money is protected – it is meaning claims are taking longer to submit and process than expected.
On top of this, although it’s radically different to previous schemes, and helping far more people - by July more than 800,000 had started on the scheme - the Work Programme is already proving better value for money for taxpayers. ERSA says that every job has so far cost the Government just over £2,000, compared to more than £7,000 per job on the Flexible New Deal run by the previous government.
Because it’s a two-year package of support, and many people have not been on the scheme long enough to have completed six months in work yet, it’s too early to judge success properly.
Since becoming Minister for Employment I have made it a priority to get around the country meeting as many providers and participants as possible. I’ve seen some great innovation, but today’s statistics also show there is a wide variety of performance among providers. That’s not a surprise, and it’s why we made competition such an important part of the scheme. In every area there are at least two providers, so from next year we’ll move more participants towards those who are delivering the best results. We have also now sent formal contract letters to providers with the lowest performance to make clear we expect improved performance.
Critics call for us to change course, but we won’t be doing that. Why would we? We’re getting people off benefits and into work and the scheme is already proving better value for money than the Flexible New Deal. And don’t be fooled by cries for a return to the previous government’s Future Jobs Fund. That created fixed-term placements, largely in the public sector, which had no prospect of lasting longer than six months. A report published last week showed half the participants were back on benefits as soon as each £6,500 placement finished and the Treasury may never recoup the costs. Why opt for that when we’re already offering 100,000 work experience places each year, costing £325 a time, which are shown to be effective at helping young people off benefits.
The bottom line is that the Work Programme is about people. It is about helping people who previously had been given up on by the welfare state and had themselves given up on the idea of ever working again.
It’s still early days for the Work Programme but I am determined we’ll help hundreds of thousands more people off benefits and into work over the coming years. Those trying to escape a life on long-term unemployment need our help, and as a country we can’t afford to ignore this untapped resource if we are to compete globally.