Reducing Poverty, Increasing Support

Issue date

04 Jun 2007

Reducing Poverty, Increasing Support: the TUC response to the Freud report

introduction and summary

On 5 March the Department for Work and Pensions published Reducing Dependency, Increasing Opportunity, an independent report into the future of labour market programmes the Department commissioned from Mr David Freud. This document presents the TUC's response.

In 1994 the TUC launched a major campaign to persuade all the political parties to make full employment the central objective of economic policy. At the time we were derided for our unrealistic and utopian ambitions; today all politicians claim the target as their own. We welcome their conversion, but they have yet to understand the need for a humane approach.

We have two simple messages: the vast majority of people excluded from the labour market are the victims of economic forces beyond their control, and decisions in which they had no voice; they are not lazy, swinging the lead or irresponsible.

They need support to get jobs, not penalties.

People facing multiple barriers to employment can be helped by a flexible and personalised public employment service; at all costs we should avoid policies that risk a socially divisive 'rush to the bottom'.

There is no need for privatisation or contracting out.

Unemployment has come down a great deal in the last decade, but there are still parts of the country where it is hard to find jobs and there are people facing extra obstacles to work who still find it difficult to get jobs, wherever they live. We need a strong and compassionate public employment service to help them.

This report argues in section 1 that unemployment, non-employment and poverty are interlinked social ills and the TUC entirely agrees with the Government that they should be a priority for public policy.

In section 2 we argue that the Government has a very successful employment record since 1997, but we would urge them to be cautious in approaching their aspiration for an eighty percent employment rate - this is a marathon, not a sprint and the correct timescale is the next 35 years, not the next 10.

In section 3 we argue that the New Deal has performed well, but it has been least successful in helping those furthest from employability. In our view the keys to helping the most disadvantaged clients are quick assessments of need, personalised services and a commitment to working with the claimant's attitudes and aspirations.

In section 4 we argue that there is no need to contract out Jobcentre Plus services; competition is unlikely to improve the quality of the service, value for money, innovation or choice for clients. It may have negative consequences for voluntary organisations that take part and there are special problems around contracting to faith organisations.

In section 5 we insist that claimants aren't the only people who should have to balance their rights and responsibilities: the Government and employers have responsibilities too. It would be wrong to require lone parents with older children to be available for employment - most lone parents with older children are already in employment in any case and the others often have genuine problems in combining employment and parenthood - such as having a disabled child or being disabled themselves.

Section one: poverty, social exclusion and employment

'He was a man who had had a very stable employment history, virtually no experience of unemployment and who believed that working gives people a sense of purpose. He finds unemployment 'demeaning', feels that people 'class you as a second class citizen' and thinks there is a 'stigma' attached to unemployment. But while these feelings are part of the cause of his depression, he finds his loss of status as a provider for the family very painful.

' ... his wife did worry a great deal:

''We're getting deeper and deeper into debt. I mean that hurts as well ... One week he'll go and tell them that we can't pay, the next week I'll go. There was a time I'd hide if anybody knocked on the door. And if I went to the door, I'd stand there shaking. But now I just stand there and face them and tell them we haven't got the money.'' [1]

1.1 Unemployment and poverty are disasters for families. We know that:

The proportion of unemployed men who develop a depressive illness can be as high as one in seven. [1] This can be exacerbated by the poverty that follows unemployment, which can isolate people with mental health problems; it can then be impossible to escape because discrimination and ignorance make it harder to get a job [2] and as time goes on and an unemployed person has still not got a job, so the depression can deepen, leading to worse isolation.
Unemployed people face higher rates of suicide, [3] illness and premature death, with excess mortality of over 20% after adjusting for social class. [4]
Couples hit by unemployment are more likely to separate and unemployed people are more likely to be divorced. [5] Indeed, unemployed people are 75% more likely than those in secure work to suffer from marriage break up. [6]
Children whose parents are unemployed or who have never worked are 13 times more likely than other children to die from injury or poisoning. [7]
Prisoners are far more likely than other people to have been unemployed [8] and persistent young offenders are more likely to be unemployed than those who have never offended or have stopped. [9]

1.2 Sometimes politicians and journalists assume that unemployment is yesterday's problem. Of course, there has been tremendous progress since the mid-1990s, but there are still parts of Britain where unemployment is high. In the 12 months from October 2005 to September 2006 the average unemployment rate for the UK was 5.4 percent, but there were twenty-five local authorities, with a total working age population of over 4 million (ten percent of the national total), where the unemployment rate was half as high again or higher:

Local authorities with high unemployment rates, 2005/6 [10]

Local authority	Unemployment Rate
Tower Hamlets	13.7%
Hackney	11.0%
Newham	10.8%
Barking and Dagenham	10.3%
Nottingham	9.8%
South Tyneside	9.6%
Birmingham	9.6%
Islington	9.6%
Westminster	9.4%
Lambeth	9.3%
Haringey	9.2%
Liverpool	9.0%
Southwark	9.0%
Waltham Forest	9.0%
Greenwich	8.9%
Merthyr Tydfil	8.9%
Leicester	8.7%
Camden	8.7%
Great Yarmouth	8.6%
Brent	8.5%
Hammersmith and Fulham	8.4%
Hartlepool	8.3%
Middlesbrough	8.3%
Ealing	8.2%
Thanet	8.1%

1.3 Of course, unemployment is not the same as not having a job: people can be workless because of temporary or long-term sickness, disability, because they are caring for frail elderly or disabled friends or relatives or have childcare responsibilities or because they are full-time students. We cannot assume that all the problems we have just linked to unemployment will apply to families who have no adults in work for one or more of these reasons. But it is likely that they will be poor.

1.4 Not having a job is a major cause of poverty, and this link is illustrated by the figures for child poverty, which show that children are far more likely to be poor when their parents do not have jobs:

Children's risk of poverty by economic status, 2005/6 [11]

	Poverty Rate
All adults in work	8%
At least one in work, but not all	28%
Workless households	60%

1.5 Children in workless households are more likely to be poor than any other group of children with a high probability of poverty (with the significant exception of families in receipt of Jobseeker's Allowance):

Children's risk of poverty by family/household characteristics [12]

	Risk of poverty
Receiving Jobseeker's Allowance	72%
Workless households	60%
Pakistani/Bangladeshi ethnic group	58%
Living in local authority housing	49%
Large family	40%
Lone parent family	35%
Living in Inner London	35%
All families	22%

1.6 What is more, poverty is linked to many different forms of social exclusion:

Just 32.6% of children eligible for free school meals achieve 5 GCSEs at grades A* to C, compared with 60.7% of those not qualifying. [13]
The infant mortality rate for babies whose fathers worked in semi-routine jobs is more than twice that for those where the fathers' socio-economic classification is 'large employers and higher managerial occupations.' [14]
People in the bottom fifth of the income distribution are more than twice as likely to live in homes in serious disrepair as people in the top fifth of the income distribution. [15]
People in the top two socio-economic groups travel more than twice as many kilometres each year as those in the bottom two. [16]

1.7 The conjunction of unemployment, worklessness, poverty and other forms of social exclusion is so remarkable that we can say that any serious attack on poverty and social exclusion will fail if it does not include employment policies. Unions agree with the Government that employment must be at the heart of anti-poverty policy [17] and have strongly supported the 'aspiration' of an employment rate of eighty percent.

1.8 This submission does not dispute the importance of employment. Unions were scarred by the mass unemployment of the 1980s and early 1990s; hundreds of thousands of our members lost their jobs, many never returned to employment. Through the TUC network of Unemployed Workers' Centres we know that, in cities across the UK, thousands of workers without jobs still try and fail to return to work. Some are counted as unemployed, others are long-term sick or disabled and excluded from the world of work by structural and direct discrimination. Stress and social exclusion are still a daily reality for unemployed people; for any worker unable to get a job, poverty is all too often the result.

1.9 While most union members are in work, they come from the same communities, often from the same families as the people who haven't got jobs. Many of the people who haven't got jobs used to be our members. That is why we insist that these are good people who have fallen on bad times - bad times that still exist in many parts of the country - and who were mugged by economic changes they cannot be blamed for.

1.10 People in Tyneside and Liverpool and Birmingham and Merthyr and Glasgow did not choose a life of idleness; their jobs were swept away by the de-industrialisation of the 1980s and 90s. When the number of unemployed people rises by more than a hundred thousand (as it did between March 2006 and March 2007 [18] ) this is not because that many people have suddenly become lazier, or decided that leisure now looks more attractive than work - their jobs were made redundant, or their employers closed or their temporary contracts ended and they were unable to get new jobs.

1.11 When interest rates rise and a manufacturing industry that now employs fewer than one worker in ten shrinks further there can be a genuine argument about whether that rise was good for the country; what cannot be argued is that the people who lose their jobs as a result should be blamed for their unemployment.

1.12 When non-employed people with health conditions and impairments living in former industrial heartlands look around them and decide that they are never going to get a job they are being realistic, not defrauding the taxpayer. When a lone parent decides that her disabled child needs her at home she is trying (often in difficult circumstances) to be a good mother, not opting for the easy life.

1.13 None of this is to deny that benefits for unemployed people should have eligibility conditions that require them to look for jobs, or that people sometimes need a prompt to change outdated habits and consider new opportunities. But it is an argument for a full employment policy that treats unemployed people as the victims not the villains of the story, that offers them support and does not threaten them with penalties.

1.14 In this response to the Freud report we will argue how best to offer that supportive approach. We will start, like Mr Freud, by looking at the UK's employment performance over the last ten years. Then we will consider his arguments around how best to support people who face particular disadvantages in the labour market, and ask whether contracting-out public employment services is the best way to do this. There are important questions that have not yet been answered about contracting out services to faith organisations, these are of increasing concern. Finally, we will look at Mr Freud's remarks on rights and responsibilities, especially as they affect lone parents; we believe they are harsh and unnecessary, and will explain why.

employment since 1997

2.1 We have noted at the start of this response that the TUC led the political world in insisting that full employment was a realistic objective. But, having led the way in calling for Governments to be ambitious, we would emphasis that ambition must be tempered by realism. Firstly, the current employment rate is high by international standards - no major economy currently has an employment rate of 80% or higher.

Employment rates, international comparisons [19]

Country	Employment rate (%)
Denmark	77.9
Netherlands	75.0
Sweden	73.2
USA	72.2
Canada	72.1
United Kingdom	71.5
Finland	70.8
Austria	70.6
Cyprus	70.4
Japan	69.7
Ireland	69.6
Estonia	68.1
Germany	67.9
Portugal	67.6
Latvia	67.4
Slovenia	66.0
Czech Republic	65.6
Spain	65.2
Luxembourg	63.6
Lithuania	63.5
France	63.0
Belgium	62.1
Greece	61.0
Romania	60.9
Slovak Republic	60.2
Bulgaria	59.8
Italy	58.5
Hungary	57.6
Poland	55.7
Malta	55.5

1.15 2.2 Secondly, the most striking features of UK employment rates are that by historical standards, they are quite high and their recent stability: they have been in the range 74 - 75% for more than seven years, which does not suggest that it will be easy to raise them:

UK employment rates, 1974 - 2007 [20]

Date	Employment rate (%)
Jan-Mar 1974	75.7
Jan-Mar 1975	75.6
Jan-Mar 1976	74.8
Jan-Mar 1977	74.3
Jan-Mar 1978	74.0
Jan-Mar 1979	74.1
Jan-Mar 1980	73.8
Jan-Mar 1981	71.5
Jan-Mar 1982	69.6
Jan-Mar 1983	68.0
Jan-Mar 1984	68.8
Jan-Mar 1985	69.7
Jan-Mar 1986	69.9
Jan-Mar 1987	70.3
Jan-Mar 1988	72.5
Jan-Mar 1989	74.4
Jan-Mar 1990	75.0
Jan-Mar 1991	73.8
Jan-Mar 1992	71.4
Jan-Mar 1993	70.3
Jan-Mar 1994	70.6
Jan-Mar 1995	71.1
Jan-Mar 1996	71.8
Jan-Mar 1997	72.6
Jan-Mar 1998	73.2
Jan-Mar 1999	73.8
Jan-Mar 2000	74.2
Jan-Mar 2001	74.6
Jan-Mar 2002	74.3
Jan-Mar 2003	74.6
Jan-Mar 2004	74.8
Jan-Mar 2005	74.9
Jan-Mar 2006	74.6
Apr-Jun 2006	74.6
Jul-Sep 2006	74.5
Oct-Dec 2006	74.5
Jan-Mar 2007	74.3

2.3 The TUC therefore believes that some caution is in order, and it would be unwise to base strategies on the assumption that an 80% employment target will be easily or quickly achieved. This does not mean that the objective is unrealistic - employment rates for women are historically high [21] and the trend has been rising for some years, which suggests that a government which maintained this progress and returned to previous male employment rates [22] might well achieve a significant increase overall.

2.4 This would take time: the last 5 points increase in the employment rate for women (from under 65%) took 18 years; and a similar increase in the male employment rate has not taken place for more than a generation.

2.5 One way to achieve results more quickly would be to concentrate efforts on increasing the employment rates of the most hard-to-help groups, where the Government has already had some success:

Employment rates of disadvantaged groups [23]

	1997	2006	Change
All	72.6%	74.4%	+ 1.8
Over 50s	64.7%	70.9%	+ 6.2
Ethnic minority people	56.2%	60.6%	+ 4.4
Lone parents	45.3%	56.6%	+ 11.3
Disabled people	38.1%	47.4%	+ 9.3
Lowest qualified	51.7%	49.4%	- 2.3

2.6 This is roughly the approach the Government has chosen to take, aiming at a one million cut in the number of people receiving benefits for incapacity, an increase in the lone parent employment rate to seventy percent and an increase in the number of older workers in the order of one million. [24] This will still be stretching - as we can see from the table above, an increase in lone parents' employment rate of 11.3 percentage points has taken ten years; an employment rate would require an increase of a further 13.4 points.

2.7 A higher employment rate will also require that extra attention be paid to regional employment. The overall employment rate can be misleading if one assumes that it reflects the same position across the country - regional differences are quite significant. While the UK's employment rate is 74.3 percent, in the nations and regions this figure varies from just under 70 percent in London to over 78 percent in the rest of the South East of England:

Employment levels and rates in the nations and regions [25]

Region	Employment level	Employment rate
South East	4,106,000	78.2%
South West	2,481,000	78.0%
East	2,744,000	77.4%
Scotland	2,530,000	76.6%
East Midlands	2,104,000	76.0%
UK	28,981,000	74.3%
West Midlands	2,502,000	72.7%
Yorkshire & the Humber	2,359,000	72.7%
North West	3,181,000	72.5%
Wales	1,347,000	71.7%
North East	1,161,000	70.9%
London	3,709,000	69.9%

2.8 If the UK employment rate rose to eighty percent through a uniform increase of 5.7 percentage points this would entail an employment rate of over 83 percent across the South of England except London, whilst London and the North East of England would still have employment rates in the mid seventies. There is a very strong risk that the economy would overheat in the South - which is after all where the highest paid workers are located - forcing the Bank of England to raise interest rates and bring the economic expansion to a halt. Indeed, past experience suggests that, without any changes in current policy, employment growth would not be uniform, but would be biased to the most successful areas, forcing this slowdown to take place even earlier.

2.9 A balanced advance towards an eighty percent employment rate will require an explicit policy of encouraging more growth in the nations and regions that currently have the lowest rates. Consider the shortfall if each region was achieve an employment rate of 80%:

An 80% employment rate in each region [26]

Region	Shortfall - numbers	Percentage increase needed
South West	64,000	2.0%
East	92,000	2.6%
South East	95,000	1.8%
East Midlands	111,000	4.0%
Scotland	112,000	3.4%
North East	149,000	9.1%
Wales	156,000	8.3%
Yorkshire & the Humber	237,000	7.3%
West Midlands	251,000	7.3%
North West	329,000	7.5%
London	536,000	10.1%

2.10 This gives an idea of the scale of the problem. It highlights the need for powerful regional policies and economic institutions and the sort of timescale that is realistic. A Government that tries to move 50,000 Londoners from non-employment to jobs every year for a decade is simply setting itself up to fail. But inflationary pressures and skills shortages would be fatal to a policy that wasn't biased towards regions with lower employment rates. In our report, The Eighty Percent Solution, we suggested a 35-year timescale, aiming at:

A million extra workers by 2015,
A further million by 2024, and
A third million by 2042. [27]

2.11 The first million is the most important, and the period up to 2015 will also require the most intensive activity. The first million would translate into roughly 140,000 people a year moved off benefits and into work, about 30,000 of them in London. This is challenging, but manageable, given the Government's commitment to extra investment in employment programmes, and the reasonable prospects for continuing economic stability.

2.12 Just as importantly, thinking about the problem over this more reasonable timescale should reduce the temptation to panic and fall back on hassling people into jobs. In the next section we look at the lessons of ten years' experience of the New Deal programmes, and what this suggests about the reforms that can achieve measured progress to an eighty percent employment rate.

Section three: welfare-to-work since 1997

the good news ...

3.1 What we know about the active labour market programmes introduced since 1997 is very encouraging, but there is a shortage of recent research on the subject. When the New Deals were introduced there were several important research programmes set up to evaluate them, but little has been published since 2003 and the data mostly dates to 2000 or earlier. These early evaluations were very positive, finding that the New Deal for young people reduced long-term youth unemployment by 45,000, and 100,000 young people a year were leaving unemployment earlier than they would have done otherwise.^[28] The New Deal for lone parents has been particularly successful - half a million lone parents have moved into employment through this programme, with job entries running at over 70,000 a year.

3.2 A recent Department for Work and Pensions review of research on the New Deal and other programmes [29] reinforces the picture given by the early studies: for the majority of participants NDYP is still very helpful - the proportion of participants who leave the programme for jobs - 46% - is higher than early figures; since the programme was introduced 'not only have the numbers of long-term unemployed 18-24 year olds fallen but the rate of decrease has been around three times that of unemployment as a whole.' [30]

... and the less good news

3.3 These programmes have, however, been most useful for those participants who were already closest to the labour market, and least effective in reaching those with extra problems. One report^[31] showed that the programme had been much more successful in rural areas, especially in the South, than in inner city areas. Churning, with people passing through the programme and back to benefit, was commonest in industrial cities in the North, such as Newcastle, Sheffield and Barnsley. In areas with high levels of unemployment personal advisers had been over-worked, lacked time to check the quality of the jobs they were directing young people to apply for, and, in these poor quality jobs, retention rates had been very low. A study of the attitudes of participants^[32] found that, while most participants thought the New Deal was very or fairly useful, members of disadvantaged groups were much less likely to be satisfied.

3.4 There have been similar findings for the other New Deal programmes:

NDLP participants living in deprived wards, teenage and older lone parents, those with ill health and disabled and ethnic minority lone parents were all less likely to get jobs. [33]
People aged over 50 and those with skills needs were less likely to be helped by the New Deal25+. [34]
New Deal 50+ participants aged over 60 or who had been unemployed for a long time were less likely to get jobs.^[35]

3.5 The DWP review also finds that disadvantaged participants gain less from the New Deal. While it is true that 'participants with multiple disadvantage gained benefit from the programme in terms of enhancements in their employability (skills, qualifications, work experience and so on)' it is also true that 'this was not always translated into employment entry and a job. The analysis pointed to the greatest impact for the disadvantaged coming through the FTET Option. The analysis also suggested that participants who were members of ethnic minority groups generally had a less favourable experience of the programme. They had a substantially lower likelihood of entering employment than white participants, once other characteristics were taken into account.' [36]

how to help the most disadvantaged

3.6 It is not true that the answers to all important problems are complicated; some are simple, but difficult. The answer to this problem is not easy, because it is not cheap, but it is not very complicated either. An active labour market programme that will be more helpful for people with extra disadvantages will have three distinctive qualities:

It will assess what is needed and deliver that help quickly.
That help will be personalised to the needs of the individual jobseeker.
The system will work with the grain of the participant's attitudes and aspirations.
To do this the programme will be flexible, allowing important decisions to be made as close as possible to the front line, with the maximum input from staff who know the jobseeker him or herself.

3.7 The review of the evidence on what works for older unemployed long-term unemployed people reveals the value of speedy action:

'Evaluation of ND25plus found that the job entry rates of early entrants to ND25plus exceed those of other customers despite the fact that early entry is conditional upon being at a disadvantage in the labour market. This suggests, or is not inconsistent with the view, that the sooner an intervention can be made the more effective it is likely to be.' [37]

3.8 Individualised support is important for members of disadvantaged groups, but this is not really a group issue. Obviously, the needs of different groups vary, but what is far more important is the fact that individuals have so many problems, and react so differently to programmes designed to help them. The individualisation need to help people in these circumstances is only possible in a programme with far more flexibility than we have at present, and only those personal advisers (and their supervisors) who are dealing directly with these claimants are likely to understand just what is needed. This is a lesson from Pathways to Work that it is important for us to learn:

'Ultimately what works lies in the ability of Job Broker services to identify the needs of customers, for them to be matched with an appropriate Job Broker service and with the right levels of support, and to maintain effective relations and communications with customers.' [38]

3.9 The recent evaluation of the Working Neighbourhoods pilots noted that the programme's key strengths that helped it to get 'a significant number of people into work' included: [39]

'the flexibility of the pilot - advisers have been able to take flexible, responsive approaches to working with customers to address entrenched barriers to labour market participation;
'the engagement of key local players - working in partnership has brought key benefits including a greater understanding of the worklessness 'problem' and mobilising a wide range of organisations and providers to meet the needs of customer groups;
'putting in place a wide range of provision to meet customer needs - using Community FDF monies to secure provision, particularly for customers normally outside of the remit of mainstream Jobcentre Plus services;
'testing different customer engagement strategies;
'the quality of staff teams - many pilots have benefited from enthusiastic, committed and effective managers and advisers.'

3.10 The What Works survey also noted the variety of issues facing partners of benefit claimants, and the implication that flexibility is important:

' ... many of the issues facing partners required a holistic approach to dealing with the needs of the household. Partners face a number of different, but often associated barriers to employment, including health issues and caring responsibilities. The extent to which this was appreciated by PAs and their ability to address these larger issues had an important bearing on outcomes.' [40]

3.11 This approach is most important when dealing with the most disadvantaged:

'A synthesis of evidence on flexible delivery concludes that the most disadvantaged can be helped into work if support is sufficiently tailored to their needs and circumstances. A review of Action Teams for Jobs has highlighted the importance of flexibility in responding to the needs of customers: of being able to deliver a tailored and client-centred approach with no set limit of financial support. Similarly, a study of 'inactive' beneficiaries of ESF projects found that there was more success where individually tailored support and guidance was offered, rather than from a 'one size fits all' approach.'^[41]

3.12 The evidence also points to the limitations of the 'work first' approach - the difficulty with expecting participants to take any job is that this approach does not lead to sustainable employment. [42] We know that there are five factors that determine how likely a participant is to complete their New Deal option:

The match between her/his aspirations and what is offered by the option;
Intervention by personal advisers when things go wrong;
The availability of help with personal issues or problems;
Awareness of sanctions;
Monitoring and scrutiny of providers, especially those who have been reported as having difficulties with placements.

3.13 We know that participant who completes their option is more likely to get a job out of the New Deal, and it is certain that someone who does not do so is not going to be helped into employment by the programme. A successful programme has to offer the help that is needed when it is needed, it has to be backed up by sanctions to show that the obligation to move into employment is a genuine one but at the same time to engage the participant's desire to make a success of the enterprise.

3.14 Individual support and local flexibility will require extra resources, but we should expect help for the most disadvantaged to be more expensive than help for those who can be reached through standard programmes. Without this extra support, the most disadvantaged participants could come to see NDYP as no more than a compulsory work experience programme. We know that the New Deal work experience options have the highest rate of sanctions and are the least popular, and would be horrified if we moved towards a programme in which, despite overall success, those participants who need the most help were required to take part in ineffective provision, and then faced sanctions for voting with their feet.

3.15 By this standard the TUC obviously agrees with some of the conclusions David Freud has enunciated. We agree on the need to concentrate resources on those clients who face the most severe barriers to employment, to support them with personalised packages of support that match their individual needs and the importance of flexibility in achieving this are all points the TUC has been arguing for the past ten years, so it very good news that they have appeared in a DWP-sponsored paper.

3.16 But the Freud model suffers from a fundamental flaw. Mr Freud proposes that Jobcentre Plus should keep the high volume end of the labour market business, with claimants coming to JCP for the first year; they would then be handed over to private and voluntary sector contractors who will concentrate on overcoming the individuals' barriers to work. This is simply too cumbersome - people facing significant labour market disadvantage are at risk of a very rapid reduction in their employability, so it is important to assess their needs and deliver services to them as quickly as possible. Waiting a year is precisely the wrong thing to do.

3.17 The obvious question is, if the Freud model fails to provide the mix of flexibility and speed that we need is there an alternative that combines them?

Building on New Deal

3.18 In 2004 the TUC gave strong support to A New Deal for All, [43] a National Employment Panel reported that reflected our emphasis on individualised and flexible support for disadvantaged clients, and which called for ' [a] programme ... based on a menu of activities and services which Personal Advisors may use to meet the specific needs of disadvantaged clients at different points in their employability development.' [44]

3.19 Shortly afterwards the same spirit could be observed in a Departmental report on Building on New Deal. Under BoND, as it has become known, more power was to be devolved to JCP managers and Personal Advisers to choose provision to meet local and individual needs. The reforms also aimed to increase the programme's flexibility, by enabling participants to access a wider range of modular provision tailored to suit their needs from a single New Deal programme catering for all client groups. Under BoND, JCP would attempt to identify disadvantaged clients much more quickly and offer them specialist support.

3.20 At first there was a widespread assumption that BOND was going to be expanded rapidly and a number of other Jobcentre Plus proposals were based on it, such as the DWP refugee employment strategy and the progress2work-plus programme for ex offenders, homeless people and drug and alcohol addicts. Unfortunately, after a great fanfare announcing the introduction of BoND, very little has been heard of it. The recent report on the Government's employment strategy by the House of Commons Work and Pensions Committee is very critical of the failure to introduce BoND as promised and calls on the Department to 'pilot BoND, or a programme based on the same principle.' [45]

3.21 The Government's response indicates that BoND has been a casualty of the cuts, and was sacrificed to pay for the national roll-out of Pathways to Work. Rather defensively, the response argues that the principles are embodied in the city strategy, [46] but this rather misses the point, which is to transform the way Jobcentre Plus meets the needs of disadvantaged clients, rather than to hand the work over to the private and voluntary sectors.

Section four: a contract on Jobcentre Plus

the Freud model

4.1 In his report, Mr Freud proposes that Jobcentre Plus should continue to provide benefit processing and labour market programme support to working age clients during their first year out of work. After that, the private and voluntary sectors should deliver services to remaining clients, who would tend to be those who need an individualised package of support.

4.2 Mr Freud recommends the use of 'prime contractors', who would be awarded long-term monopoly regional contracts. Funding of contractors would be on an outcome-related basis, with payments for moving clients off benefit, and for succeeding in keeping them in employment for 13, 26, 52, 104 and 156 weeks afterwards; there might also be payments for clients' pay progression and weighting to take account of complex needs. [47]

4.3 This model is designed to attract large investors, who will obviously expect a return on their outlay; hence the emphasis on large, regional contracts, monopoly providers and long-term contracts. The report argues that this model could still result in a saving for the Government because of savings over the life of the contract from a claimant's move into employment. Mr Freud estimates the public savings from a 'genuine transformation into long term work' for someone on Incapacity Benefit at around £62,000. [48]

4.4 It is interesting that Mr Freud does not see the high-volume end of Jobcentre Plus's business as offering many opportunities for contractors, and accepts that 'Jobcentre Plus deals efficiently and cost-effectively with the large number of customers that come through its door every day. This is where it adds the maximum amount of value and it is hard to see any reason why this successful model of delivery should be changed.' [49]

4.5 The Freud report presents four main arguments in favour of contracting-out services for more disadvantaged clients:

Firstly, competition will improve value for money;
Secondly, that it will drive up the quality of the service to disadvantaged clients;
Thirdly, introducing more providers will lead to more innovation;
And will mean, fourthly, that claimants will have a choice of provider.

4.6 Mr Freud also presents arguments in favour of his preferred funding model. Firstly he argues that contractors will bear more of the risk - they will have to invest in the strategies they choose to use to get disadvantaged claimants into, but only recoup that investment if their strategies actually work.

4.7 He also points to experience of outcome related funding in the New Deal for disabled people and Employment Zones, where he claims that 'an outcome-based approach can deliver significantly improved results for the hard to help.' [50]

4.8 It is worth noting at this point that Mr Freud accepts what would be the TUC's first argument in rebuttal, conceding that 'there is no conclusive evidence that the private sector outperforms the public sector on current programmes.' He prefers to rely on the assertion that 'there are clear potential gains from contesting services, bringing in innovation with a different skill set, and from the potential to engage with groups who are often beyond the reach of the welfare state.' [51] This appears to be purely a statement of ideological conviction.

concerns about the Freud model

is there a problem with Jobcentre Plus?

4.9 The TUC does not believe that JCP services have to be contracted out to provide the personalisation and flexibility needed to help disadvantaged clients. We have already mentioned the example of Building on New Deal, still our preferred option for future work.

4.10 In his response to last year's Capability Review of the DWP, Mr Leigh Lewis, the Permanent Secretary, announced that DWP plans to 'undertake a pilot programme, commencing later this year, to give front-line staff substantially greater discretion in dealing with their customers, whilst ensuring greater compliance with standard business procedures.' [52] This would also be a very good way forward.

4.11 We are not arguing in this response that there is no role for private and voluntary sector organisations in delivering employment programmes. The TUC has always believed that Jobcentre Plus can benefit from partnership with the voluntary sector in reaching hard-to-help groups, especially where these organisations have expertise with particular client groups.

4.12 This has already happened in the New Deal programmes, but the Freud proposals are another matter altogether - replacing a public private partnership in helping disadvantaged jobseekers with a system in which the public sector's only role is to hold the ring when private and voluntary sector providers are bidding for contracts.

4.13 Why exclude the public sector in this way when there is no evidence that it is not up to the task? As Steve Davis of Cardiff University has argued, 'wherever Jobcentre Plus staff have been allowed the same flexibilities and funding as private sector companies or charitable organisations they have been able to compete with, if not surpass, the performance of contractors.' [53]

4.14 Employment Zones, for instance, are often listed as outperforming the New Deal 25+ (mainly JCP) but the Freud report itself indicates that the two programmes achieve remarkably similar performances when measured in terms of cost per sustained job: [54]

Value for money, Employment Zones and New Deal 25+

Programme	Cost per sustained job
Employment Zone clients aged over 25	£5,110
New Deal 25+	£5,130

4.15 Another comparison can be found in the evaluation of the Action Teams for Jobs - which showed ATs run by Jobcentre Plus out-performing those with a Private Sector Lead:

'The 25 PSL teams as a whole only met 78 per cent of their job entry targets in year one of Phase 3 of Action Teams, compared to the 40 Jobcentre Plus teams, as a whole, who achieved 140 per cent of their job entry targets. PSL teams, as a whole, achieved 69 per cent of their outcomes from non-JSA customers, compared to Jobcentre Plus teams, as a whole, who achieved 76 per cent (again, exceeding the target of 70 per cent). PSL teams, as a whole, moved into work proportionately more clients who had only been out of work for a short time than Jobcentre Plus teams. They were also proportionately more likely to work with clients with just one of the target disadvantages than Jobcentre Plus teams, as a whole, were.' [55]

4.16 It is worth emphasising here the fact that commonplace stereotypes about an inefficient public sector are very wide of the mark when it comes to Jobcentre Plus. Last year, the Department's Capability Review was mixed overall, but very positive on the subject of delivery: 'The Department has a strong track record in delivery and some excellent practice in programme management and day-to-day, high-volume transactional customer service at the front line.' [56]

4.17 Furthermore, DWP productivity is high, with an official analysis concluding that:

'Productivity has increased in 2005/06, partly because of headcount reductions and other efficiency savings already made. Looking forward, DWP efficiency savings are expected to be met as the earlier investments bear fruit and because DWP is committed to achieving the full 30,000 headcount reduction, resulting in considerable productivity increases.' [57]

will competition provide higher quality?

4.18 The TUC fears that quality could be undermined by 'creaming' and 'parking' - concentrating support on those closest to employment and doing very little to help those with extra problems.

4.19 This has already happened in the Employment Zones, and at a time when there was far less pressure on budgets than there is now. The first evaluation of the Zones found that output-related funding (the regime advocated by the Freud Report) encouraged contractors to segment participants into 'job ready'; 'near job ready'; 'not job ready' and 'unemployable' categories. People in the latter group were only offered fortnightly interviews with a minimum of any additional help, referral to free services from voluntary organisations or encouraged to switch to other benefits. [58] More recent research has found that providers have stopped blatantly excluding less job-ready clients, but they do concentrate their efforts on those who are most enthusiastic . [59]

4.20 Another aspect of the same problem was revealed by the Government's evaluation of the multiple-provider Employment Zones, which found that when there were tight constraints on funding very disadvantaged clients could simply be too expensive to take on:

'Some providers operate a live and suspended caseload to manage this process. Providers are careful not to 'reject' a lone parent as this would affect their reputation with the wider lone parent client group. However, there is evidence to suggest that providers are more likely to target lone parents who are ready to work. This involves pursuing those clients who are considered good prospects to sign them up and then actively maintaining contact. A small number of lone parents we interviewed suggested that providers' interest in them waned relatively quickly. ... For their part, provider staff felt that their 'offer' was work-first and that there was little they could do when lone parents wanted to go into long-term training or faced substantial barriers.' [60]

4.21 This quotation illustrates just how important it is to consider the impact of competition in context; funding for labour market programmes is very tight, which means that there will be a great deal of pressure to cut out any fat from contracts. This could quickly produce a low-quality service:

If providers were encouraged to move people off benefits quickly, this could lead to claimants being treated unfairly or harshly.
Or to reliance on low paid insecure jobs with poor terms and conditions.
If this happened, the private sector's focus on the bottom line would leave claimants worse off than if they were dependant on organisations infused by the public sector ethos.

4.22 There are also concerns about the security of personal information. Many people are concerned that private businesses might treat information about clients as a business asset, selling it on to other organisations. However exaggerated this fear might be, many claimants will be reluctant to give personal information to a representative of a private company than to a public servant. While information about clients might become less secure, information about the performance of contracted-out services would become much more difficult to obtain once it was commercially sensitive, with an attendant loss of transparency and accountability.

will competition provide value for money?

4.23 The savings that will be produced by contracting-out are very theoretical. The savings will depend on whether the fiscal impact (benefits that no longer have to be paid, taxes that would otherwise not have been received) and the cost of providing the service have been calculated accurately. Otherwise the Treasury could end up paying far more than the service is really worth - and be locked in to large long-term contracts requiring this.

4.24 Mr Freud recognises that 'the costs of helping individuals move into work need to be understood.' [61] At present they aren't. This means that the Treasury can calculate the fiscal savings, but cannot work out whether it would be getting a good or bad deal from any given level of payments. The 'initial benchmark' will be based on how long different groups normally remain on benefits, but again this measures savings, not costs, and does not measure against how much the same result would cost from JCP.

will contracting-out promote innovation?

4.25The outcome-related funding system proposed by the Freud Report is actually likely to reduce the variety of provision. In a system where most funding comes from getting people into jobs, and very little is set aside to meet running costs, small organisations will not risk becoming involved. Large businesses, on the other hand, have the resources to balance this risk against the likelihood that the funding regime will meet these costs and provide a profit on top, but they will tend to prefer programmes that have been shown to work, and be unlikely to experiment. The first result of contracting-out could thus be a reduction in the number of partner organisations working with JCP, and less variety and originality in the services they provide.

4.26 A further worry is that contractors will regard information about what they do that works best as commercially sensitive - it will, after all, be competitive edge. There is also a danger that contractors will be reluctant to work in partnership with organisations they views as actual or potential competitors.

4.27 Mr Freud recognises these risks and says that his system would include transparent measures of performance 'in which information about successful strategies is publicly available' [62] so they can be reproduced. Furthermore, prime contractors will be 'required to work with local agencies and through any City Strategy consortia to ensure that the provision was responsive to local conditions and objectives.' [63] This may be the aim of the contract design, but contractors will find it worth their time to employ lawyers with the specific task of limiting such obligations as far as they can.

will contracting out promote choice for clients?

4.28 Although Mr Freud suggests that a choice of providers could be one of the advantages of contracting out services, later in his report he accepts that the prime contractor model will actually mean less choice for clients, who will at best be able to choose between sub-contractors 'where appropriate' [64] and the Department 'could' require contractors to offer this.

4.29 In the New Deal for young people we have already seen what this can lead to. Originally NDYP was promoted on the basis of offering unemployed young people a choice between four high-quality options but, famously, 'no fifth option' of benefits with no activity. In practice, our Unemployed Workers' Centres report, all too often New Deal participants are told that the full-time education and subsidised employment options are not 'appropriate' for them, and their only choice is amongst a limited number of work experience providers, often with a poor record of helping people into employment. This shrinking of choice tends to be commonest for the most disadvantaged claimants, and is one of the reasons why these groups have the worst experience of the programme.

the impact of contracting out on voluntary organisations

4.30 It has been suggested that small voluntary organisations could be involved in consortia led by the private sector organisations that are big enough to bid for the proposed regional contracts. This could well be a threat to their ethos and, in some cases, to their existence. Firstly, voluntary organisations that delivered formerly public services would come under the same budget pressures the public sector previously faced, some would have to make cuts or cross-subsidise from other sources of income. According to Dame Suzi Leather, the Chair of the Charities Commission, 88 percent of charities are ' failing to achieve full cost recovery for service delivery - statutory services or not - can we really sustain the belief that this can be in the best interests of charities, beneficiaries, or the sector as a whole?' [65]

4.31 Some voluntary sector organisations are rightly worried that bidding for contracted-out work would force them to become more 'business like', making them reluctant to criticise government policy and thus endangering their ethos. Organisations that used to develop new ideas and meet unmet needs could become so busy delivering these services that they would lose touch with their original raison d'etre and the client group they meant to serve. As Paul Farmer, chief executive of Mind put it:

'We welcome the recognition that the voluntary sector has an important role to play in helping people into employment, but our clients must always come first. Trust is one of the voluntary sector's unique selling points. We can't betray people by getting involved in compelling them into work before they are ready, or without the support they need.' [66]

4.32 We fear that charities and campaigning groups that decide to contract for work formerly done by Jobcentre Plus will find that they have to choose between their contracts and the trust of their clients.

issues around contracting out to faith organisations

4.33 Early in 2007, at a seminar on ' What role for faith groups in today's welfare state?', Jim Murphy MP, the Minister for Employment and Welfare Reform argued strongly for the involvement of religious organisations in a contracted-out system of welfare delivery:

'Put simply, I believe that there is not an entirely secular solution to achieve social cohesion in our communities. It can not be done without the partnership of all faith-based groups. A partnership based on mutual respect, tolerance and understanding; that draws on the values that unite us all - of whatever creed, colour or race. That looks for the positive influence of faith-based groups as forces for good within the community - helping people to overcome barriers to work and to make their contribution to the wider social good.

'Welfare provision is just one such area - and it is why I believe faith groups can play a pivotal role in delivering success in welfare reform over the next decade.' [67]

4.34 Around the world, one of the themes of twenty-first century social security has been the involvement of faith groups in privatisation. In Australia the Salvation Army and the Wesley Mission are important members of the Job Network. In the United States, the White House's Office of Faith-Based and Community Initiatives was established in 2001 to help these organizations to win contracts to provide federally funded welfare services. Mr Murphy's speech announced a similar, (but much smaller scale) initiative to work with faith groups.

4.35 The US is a particularly important example, in that country the Constitution bans the establishment of a state religion, and this puts important limitations on channeling public funds through faith groups - these funds cannot be used to pay for religious activities such as worship, prayer and evangelisation; the welfare services must be provided separately from religious activities and the faith groups must not discriminate on the grounds of religion when providing these services.

4.36 The British Humanist Association has pointed out that the UK already has experience of contracting out to faith organisations - in schools - and the results do not suggest that this has been an unambiguously good thing. In academy schools run by the Emmanuel School Foundation, children are taught in science lessons that the world was created in six days in the last 10,000 years [68] and the BHA has reported on both teachers and students being discriminated against on the grounds of non-belief. [69] Faith schools have discriminated against gay teachers, [70] against girls [71] and required pupils to carry a bible with them at all times. [72]

4.37 The experience of faith schools suggests that, without America's constitutional protections, there is a real risk that some faith organisations who contract for work with disadvantaged groups may cross the dividing line between that which is Caesar's and that which is God's. Many of their clients will be vulnerable people, afraid of offending the people on whose services they rely and often unsure of their rights. We are also concerned about the position of Jobcentre Plus staff who find themselves employed by faith groups once the service they work on has been contracted out.

4.38 We therefore think it is important that the Government should guarantee that public funds will not be used to promote specific religions or faith more generally, and that accounting will be transparent, so the public can check for themselves that their taxes have not been spent on subsidising religious activities or promoting religious doctrines or world views. Faith-based contractors should be barred from discriminating on religious or other grounds when awarding sub-contracts.

4.39 We call on the Government to guarantee that the rights of clients are protected:

Employment services should be provided in buildings that are not being used for worship or other religious activities.
Employment services should not discriminate against clients on the grounds of religion, belief, gender, sexuality, race, disability or age.
Faith-based employment services should not attempt to evangelise to their clients and contact details obtained through providing these services should not be provided to the religious outreach arm of the organisations concerned.

4.40 We also call on the Government to guarantee that the rights of workers are protected:

Faith-based providers should not be allowed to discriminate against new or transferred staff on religious or other grounds.
Faith-based providers should not ask staff unnecessary questions about their beliefs or other protected grounds.
Faith-based providers should not require staff to participate in worship or other religious activities.

Section five: rights and responsibilities

first principles

5.1 Early on in Reducing Dependency, Increasing Opportunity, Mr Freud includes a significant excerpt from William Beveridge's 1942 report:

'Beveridge's arguments still resonate today - to provide a national scheme of social insurance to tackle 'want' and at the same time to ensure that people could make the transition back into work as efficiently as possible. As the report put it:

'' Most men who have once gained the habit of work would rather work - in ways to which they are used - than be idle ... But getting work ... may involve a change of habits, doing something that is unfamiliar or leaving one's friends or making a painful effort of some other kind.'

'The state therefore had to 'save' the unemployed from the 'habituation to idleness' by ensuring that they sought and took up work. And for those unemployed for a certain period, they:

''should be required, as a condition of continued benefit to attend a work or training centre, such attendance being designed as a means of preventing habituation to idleness and as a means of improving capacity for earnings.''

'So, even in 1942, it was understood that it was not enough just to provide a safety net - the welfare state also had to support people back into work through an active labour market policy. The balance between active and passive policies has ebbed and flowed over the intervening sixty years.' [73]

unemployed people

5.2 That is not to say that claimants have no duties whatsoever. The recent 'what works' evaluation suggested that for adult long-term unemployed claimants, some level of mandatory activity is useful:

'Based on the evaluation of early versions of ND25plus, it would appear that advice alone is not sufficient to get many long-term, unemployed adults back into employment. Only when mandatory activities including work experience and training were introduced is there any evidence of a significant impact on job entry.' [74]

5.3 But equally, we know from research evidence that the vast majority of unemployed people desperately want jobs, which is another reason why the TUC opposes a punitive approach to unemployed people's benefits. Unemployed people should not be assumed to fraudulent or lazy. At the same time, the political sustainability of the benefits system depends on guaranteeing that it is robust against abuse by the small minority of work avoiders, and (as the quotation above suggests) mandatory requirements may sometimes be necessary to get claimants' attention. That is why the TUC has always accepted that benefits for unemployed people should require recipients to be available for work, and it is why we have accepted the case law that availability is 'not a passive condition'.

5.4 Furthermore, it is time that more consideration was given to a different set of responsibilities: the Government's responsibilities to unemployed people. Beveridge also said that 'the only satisfactory test of unemployment is an offer of work.' Beveridge assumed that one of the foundations of his plan (Assumption C) would be 'the abolition of mass unemployment and of unemployment prolonged year after year for the same individual', which he took to mean an unemployment rate of under 8.5 percent (currently it is 5.5 percent) and making 'unemployment of any individual for more than 26 weeks continuously a rare thing in normal times' [75] - in the UK 659,000 working age people have currently been unemployed for more than 6 months. [76] If we are going to quote what Beveridge said about work and training centres we should also remember what he said about the Government's duty to long-term unemployed people.

5.5 Nor should we forget that claimants are far from being the only people whose attitudes are important. Some of the hard to help groups face severe employer resistance to recruiting them, amounting to discrimination:

' ... employers were often cautious about employing NDDP customers. ... Moreover, vacancies to which disabled people are recruited tend to be restricted to positions requiring low level skills.' [77]

'Work with employers is an important element in a portfolio of policies to enhance employment rates of people from ethnic minorities, since discrimination is an additional problem some ethnic minority customers face in addition to barriers shared in common with other customers.' [78]

disabled people

5.6 For other non-employed people other considerations come into play. The TUC has campaigned vociferously for disabled people's equal rights to employment, and we do not believe that any disabled person should be assumed to be incapable of work. But no-one should be forced into a job that would make a chronic condition worse, or which would cause them unacceptable levels of pain, distress or fatigue. That is why unions have argued strongly that the new Employment and Support Allowance should not have JSA-style rules about availability for work.

lone parents

5.7 For lone parents the first consideration will be the best interests of their child. Local childcare may not be suitable, the child may be disabled or the lone parent her/himself may face difficulties in moving into employment. Many non-employed lone parents have multiple or complicated problems; as the evaluation of multiple-provider Employment Zones quoted in para 4.20 above indicates, lone parents often simply have 'too many problems to support with the available money.' [79] The TUC has therefore taken the view that it may be reasonable to require lone parents to attend an interview to discuss employment opportunities, but even this degree of compulsion must be handled carefully.

5.8 The Freud Report recommends that, from 2008, lone parents whose youngest child is aged over 12 should cease to be eligible for Income Support; they would have to switch to Jobseeker's Allowance instead. [80] The TUC supports the Government's objective of achieving a 70% employment rate for lone parents, but we do not think that this is the right way to go about doing this.

5.9 The first point to note is that this is a proposal that will affect comparatively few lone parents. Most working age lone parents have children under 11 - 82% according to the latest DWP data show. [81] Most lone parents with older children already have a paid job:

lone parent worklessness by age of youngest child [82]

Age of youngest dependent child	Proportion of households
0 - 4 years	64%
5 - 10 years	41%
11 - 15 years	29%
16 - 18 years	19%

5.10 Secondly, a tougher regime would be unfair to the large number of lone parents with older children who are affected by poor health and disability. 15% of lone mothers' health is 'not good', compared with 8% of mothers in couple families and 19% of children living in lone parent families have a 'long-standing health problem or disability', compared with 15% of children in lone parent families. [83]

5.11 The 'Harker Report' for the DWP noted that there would be grounds for extra conditionality for lone parents only if 'a stronger package of support for lone parents was in place and lone parents genuinely had access to affordable childcare and work that fits with their family commitments ... stronger forms of conditionality- along the lines already expected for Jobseeker's Allowance claimants - could undermine the success of the New Deal for Lone Parents which has been built on the basis of positive, supportive engagement with parents.' [84]

5.12 What would make a difference to lone parents' employment prospects? Lisa Harker suggested building on the Work-Related Activity Pilots, which offer lone parents an extra £20 a week for undertaking work-related activity, and suggested that this could be rolled-out nationally.

5.13 The most important measure, however, would to increase the availability of affordable childcare. One Parent Families says that they recently surveyed 1,000 lone parent families, and found that '71 per cent of non-working lone parents cited a lack of childcare or flexible working as a reason for not being in paid employment.' [85] The Harker report notes the very significant progress that has been made in extending childcare provision since 1997 but 'it is by no means clear that the ten-year childcare strategy will automatically deliver the kinds of changes necessary to meet the childcare needs of families in poverty, particularly the needs of certain groups such as children with disabilities.' [86]

Notes

[1] Men and Depression, Royal College of Psychiatrists, 2006.

[2] An Uphill Struggle, Focus on Mental Health, 2001.

[3] Suicide, Mental Health Foundation, 2000.

[4] The Interaction of Health Inequalities and Work Status and the Potential for Work and Occupational Health Services to Help Reduce Inequalities, Faculty of Occupational Medicine of the Royal College of Physicians, 2006.

[5] The Divorced and Who Divorces?, Kathleen Kiernan and Ganka Mueller, Centre for Analysis of Social Exclusion, CASEpaper 7, 1998, pp 21 & 35.

[6] Social Change and the Experience of. Unemployment. Duncan Gallie, Catherine Marsh and Carolyn Vogler (eds), Oxford, 1994.

[7] Reductions in child injury mortality in England & Wales: have the children of unemployed parents been excluded?, Phil Edwards, Judith Green, Ian Roberts and Suzanne Slater, London School of Hygiene & Tropical Medicine and Camden Primary Care Trust, 2006.

[8] 'Crime and Social Justice', Richard Garside, in Social Justice: Criminal Justice, Smith Institute, 2006.

[9] Understanding Offending Among Young People, Janet Jamieson, Gill McIvor and Cathy Murray, Social Work Research Findings No. 37, Scottish Executive, 1999.

[10] Economic & Labour Market Review, ONS, June 2007, table 6.02.

[11] Households Below Average Income (HBAI) 1994/95-2005/06 (Revised), DWP, 2007, table 4.5. UK figures. Poverty = having an income below 60% of the equivalised median; we follow the Government in using income before housing costs and benefits are taken into account when measuring poverty - the figures after they are taken into account are higher, but the pattern is the same.

[12] Households Below Average Income, table 4.5. Large family = four or more children.

[13] Social Trends 37, Abigail Self and Linda Zealey (eds), ONS, 2007, table 3.13 using DfES data for England for 2005/6.

[14] Social Trends 37, Abigail Self and Linda Zealey (eds), ONS, 2007, p 90, figures for babies born inside marriage in England and Wales in 2005.

[15] Social Trends 37, Abigail Self and Linda Zealey (eds), ONS, 2007, p 137, figures for England in 2004.

[16] Social Trends 37, Abigail Self and Linda Zealey (eds), ONS, 2007, fig. 12.2.

[17] 'Work is the best way out of poverty ... just getting people into a job is not enough; we need to help them stay in work and progress in employment to ensure a secure future for themselves and their children', Working for Children, DWP, March 2007, p 38. The TUC agrees, but would add that this needs to be supplemented with higher benefits and tax credits.

[18] 104,000, to be precise. Labour Market Statistics, May 2007, ONS, table 1.

[19] Labour Market Statistics, April 2007, ONS, table 19, most recent figures. The UK figure is different from the employment figure we usually see because the European figures are taken from Eurostat data, which define working age as 15 - 64; when the UK figure is calculated some people still at school and some retired women are therefore included in the denominator who would not be included in the usual ONS figures. The Canadian and Japanese figures are also based on working age being defined as 15 - 64, but the US figure is 16 - 64. In each case the figure is the most recent three-month period for which data are available.

[20] LFS historical data, UK, seasonally adjusted, taken from http://www.statistics.gov.uk/statbase/product.asp?vlnk=8292 on 24/05/2007 13:53.

[21] In the 1970s, the employment rate for women was usually in the 55 - 60 percent range, in the early 1980s it occasionally topped 60 percent, in the late 1980s it rose to 65 - 67 percent, where it remained in the early 1990s. In the late 1990s and during 2000 - 2003, it rose to r69 - 70 percent, where it is currently. LFS historical data, taken from http://www.statistics.gov.uk/statbase/product.asp?vlnk=8292 on 10/05/2007 12:30.

[22] For the three-month period Dec - Feb 2007, the male employment rate was 78.6 percent. Between Jan - Mar 1971 and May - July 1975 it was always over 90 percent; it never dropped below 80 percent till Jan - Mar 1982. LFS historical data, taken from http://www.statistics.gov.uk/statbase/product.asp?vlnk=8292 on 10/05/2007 12:30.

[23] Opportunity for All data, DWP, September 2006, downloaded from http://www.dwp.gov.uk/ofa/indicators/indicator-19.asp on 10/05/2007 12:53. GB data, first figure for disabled people is 1998, not 1997.

[24] Reducing Dependency, Increasing Opportunity, David Freud, DWP, 2007, p 47.

[25] Labour Market Statistics, ONS, May 2007, table 18 (1).

[26] Labour Market Statistics, ONS, May 2007, table 18 (1).

[27] The Eighty Percent Solution, TUC, 2005, p 19.

[28] Findings from the Macro Evaluation of the New Deal for Young People, Michael White and Rebecca Riley, DWP Research report 168, 2002.

[29] What works for whom? a review of evidence and meta-analysis for the Department for Work and Pensions, Chris Hasluck and Anne E. Green, Institute for Employment Research for DWP, Research Report 407, 2007.

[30] Ibid, para 3.4.

[31] The Geography of Workfare: Local Labour Markets and the New Deal, Peter Sunley and Ron Martin, Economic and Social Research Council, 2002.

[32] National Survey of Participants, A Bryson, G Knight and M White, PSI, ES report ESR44, March 2000.

[33] New Deal for Lone Parents: Second Synthesis Report of the National Evaluation, Martin Evans, Jill Eyre, Jane Millar and Sophie Sarre, Centre for Analysis of Social Policy, DWP report 163, 2003.

[34] Evaluation of New Deal 25 plus: Qualitative Interviews with ES Staff, Providers, Employers and Clients, Winterbotham M., Adams L. and A. Kuechel, DWP research report 127, 2002.

[35] Evaluation of the New Deal 50plus: Summary Report, John Atkinson, Insititute for Employment Studies, Employment Service report ES103, 2001.

[36] Op cit, para 3.4.

[37] Op cit, para 4.4.

[38] New Deal for Disabled People: An in-depth study of Job Broker service delivery, Lewis et al, DWP Research Report 246, 2005, p 9.

[39] Evaluation of the Working Neighbourhoods Pilot: final report, Dewson et al, DWP Research Report No 411, 2007, p 6.

[40] Hasluck and Green, para 7.4.

[41] Ibid, para 10.4.

[42] See the discussion in New Deal for Young People: the pathfinder options, Woodfield et al, SCPR for ES, 1999, para. 3.1.6. This is also a lesson from US research, see Staying in Work: thinking about a new policy agenda, Kellard et al, DfEE Research report 264, 2001, para 3.3.1.

[43] Available at http://www.nationalemploymentpanel.gov.uk/publications/nep/2004/ anewdealforall.pdf

[44] Ibid, p iv, emphasis in original.

[45] The Government's Employment Strategy, Work and Pensions Committee, 2007, para 77.

[46] Op cit, para 25.

[47] Op cit, p 69.

[48] Op cit, p 68. This is an interesting point for campaigners who for years have been trying to persuade the Treasury of the long-term benefits of investing in innovative employment programmes; in this context the savings being claimed have been estimated with an eye to setting the level of payments in the proposed contracts.

[49] Op cit, p 51.

[50] Op cit, p 6.

[51] Op cit, p 6.

[52] Capability Review of the Department for Work and Pensions, Cabinet Office, 2006, p 6.

[53] Third Sector Provision of Employment-Related Services, Steve Davis for PCS, 2006, p 6.

[54] Freud report, table 5.

[55] Review of Action Teams for Jobs, Jo Casebourne, Sara Davis and Rosie Page, Research Report 328, IES for DWP, 2006, p 4.

[56] Capability Review of the Department for Work and Pensions, Cabinet Office, 2006, p 17.

[57] An analysis of DWP productivity 1997/98 - 2007/08, DWP SPEAR project team: Strategic understanding of Productivity and Efficiency based on the Atkinson Review, downloaded from http://www.dwp.gov.uk/asd/asd5/summ2005-2006/355summ.pdf on 2/19/2007 7:54 PM.

[58] Qualitative Evaluation of Employment Zones: A Study of Local Delivery Agents and Area Case Studies¸ A Hirst et al, DWP, 2002, para 15.

[59] Evaluation of Single Provider Employment Zone: Extensions to Young People, Lone Parents and Early Entrants - Interim Report, Rita Griffiths and Gerwyn Jones, Research Report No 228, Insite Research and Consulting for DWP, 2005, p 27.

[60] Evaluation of Multiple Provider Employment Zones: early implementation issues, DWP Research Report No 310, A Hirst et al, 2006, para 3.3.3.

[61] Op cit, p 69.

[62] Op cit, p 61.

[63] Op cit, p 14.

[64] Op cit, p 64.

[65] Speech to the NCVO Annual Conference, 21-2-2007, downloaded from http://www.charity-commission.gov.uk/recent_changes/speech.asp on 24/05/2007 19:25.

[66] Welfare reform requires more carrots than sticks, Mind, 2007, press release downloaded from http://www.mind.org.uk/News+policy+and+campaigns/Press/AW2007-03-04Freu… on 24/05/2007 19:30.

[67] Speech by Jim Murphy MP at seminar on 'What role for faith groups in today's welfare state?', City of Manchester Stadium, 19th February 2007, downloaded from http://www.dwp.gov.uk/aboutus/2007/19-02-07.asp on 5/25/2007 10:14.

[68] Creationist Academies, Parliamentary Briefing, BHA, 2004, downloaded from http://www.humanism.org.uk/site/cms/contentviewarticle.asp?article=1687… on 25/05/2007 10:53.

[69] See, for instance, the 2005 BHA Parliamentary briefing on the Equality Bill, available at http://www.humanism.org.uk/uploadedFiles/cms/store//Campaigns/article_P…

[70] Faith Schools in the News, Jan - June 2005, BHA, downloaded from http://www.humanism.org.uk/site/cms/contentViewArticle.asp?article=1959 on 25/05/2007 11:03.

[71] News and comment on minority religious schools, and from minority faiths, BHA, 2004, downloaded from http://www.humanism.org.uk/site/cms/contentviewarticle.asp?article=1971 on 25/05/2007 11:06.

[72] A Better Way Forward, BHA, 2002, p 34.

[73] Op cit, p 11.

[74] Hasluck and Green, para 4.4.

[75] Social Insurance and Allied Services, HMSO, 1942, para 440.

[76] Labour Market Statistics, May 2007, table 9 (1).

[77] Ibid, para 8.4.

[78] Ibid, para 9.4.

[79] Hirst et al, p 5.

[80] Op cit, p 98.

[81] Calculated from Work and Pensions Longitudinal Survey data for August 2006.

[82] UK data for Spring 2004; 'Workless households: results from the spring 2004 LFS,' Annette Walling, Labour Market Trends, November 2004, table 3.

[83] Families and Children in Britain: Findings from the 2002 Families and Children Study (FACS), Barnes et al, DWP Research Report 206, March 2004.

[84] Delivering on Child Poverty: what would it take?, Lisa Harker for DWP, 2006, pp 23 - 4.

[85] Lone Parents and Employment Conditionality: key facts, One Parent Families, 2007, p 1.

[86] Op cit, p 31.

[1] Thirty Families: their living standards in unemployment, Jane Ritchie, DSS, 1990, pp 53-4.

Stay Updated

Want to hear about our latest news and blogs?
Sign up now to get it straight to your inbox

Join a union