Work Not Workfare

Issue date

06 Nov 2007

Work Not Workfare:

the TUC response to In Work, Better Off

October 2007

Section 1: Introduction

1.1 This document presents the TUC response to In Work, Better Off: next steps to full employment, the Green Paper published by the Department for Work and Pensions in July. In this paper we make six points:

Unions share the objectives of eliminating child poverty and raising the employment rate. The TUC is an active member of the End Child Poverty campaign, and called for full employment as the main objective of economic policy in 1994, at a time when most politicians and commentators regarded this as wildly unrealistic.
We agree that the Government has significant achievements to its credit, and we are keen to help make a success of Local Employment Partnerships and the Jobs Pledge.
The TUC has argued for a more flexible New Deal since the programme was designed. We have consistently argued for greater personalisation of the service to participants and devolution of decision-making.
Jobcentre Plus already works effectively with private and voluntary sector providers, especially at a local level. There is no need to contract-out services en masse, it 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.
It is not fair to withdraw Income Support eligibility from lone parents with older children. Forcing them to claim Jobseeker's Allowance instead will mean that they will have to show that they are actively seeking employment. A large number of the people who will be affected have disabled children, or are disabled themselves or face other obstacles to employment; it is therefore likely that the change of benefits will lead to an increase in unfair suspensions of benefit. The TUC does not accept that promises of access to childcare - which may or may not be realised - should be used to justify new responsibilities, which definitely will be imposed on claimants.

1.2 The TUC is particularly concerned that the Green Paper may signal the introduction of workfare. We would be fundamentally opposed to compulsory unpaid work experience for extended periods in jobs that would otherwise be taken by workers paid the rate for the job. This would exploit claimants, unfairly discriminate against companies not benefiting from such free labour and undercut the pay and conditions of existing workers.

Section 2: Government achievements

2.1 The TUC agrees with the Green Paper's assessment of the record of the past ten years. The Government has achieved a great deal in labour market policy, creating Jobcentre Plus; launching the New Deal programmes and Pathways to Work; introducing tax credits which are much more generous than the social security benefits they replaced; increasing childcare provision and establishing the minimum wage. There are now 2.6m more people in work than in 1997, the numbers on incapacity benefits are now falling and the number of children in workless households is down by 440,000. As a result, the number of children living in poverty has fallen from 3.4 to 2.8 million.

2.2 The UK's employment rate is high by international standards:

Employment rates in fifteen European countries [1]

Country	Employment rate (%)
Denmark	76.7
Netherlands	75.0
Sweden	72.7
United Kingdom	70.9
Austria	70.3
Ireland	68.5
Germany	68.4
Finland	68.3
Portugal	67.4
Spain	65.8
Luxembourg	63.6
France	62.9
Belgium	61.7
Greece	60.8
Italy	57.9

2.3 What is more, this high employment rate has been maintained steadily for a remarkably long time:

UK employment rates, 1997 - 2007 [2]

Year	Quarter	Employment Rate (%)
1997	Q1	72.6
	Q2	72.9
	Q3	72.9
	Q4	73.1
1998	Q1	73.2
	Q2	73.3
	Q3	73.5
	Q4	73.7
1999	Q1	73.8
	Q2	73.9
	Q3	74.1
	Q4	74.2
2000	Q1	74.2
	Q2	74.4
	Q3	74.6
	Q4	74.4
2001	Q1	74.6
	Q2	74.5
	Q3	74.4
	Q4	74.4
2002	Q1	74.3
	Q2	74.5
	Q3	74.4
	Q4	74.7
2003	Q1	74.6
	Q2	74.8
	Q3	74.6
	Q4	74.6
2004	Q1	74.8
	Q2	74.7
	Q3	74.7
	Q4	74.9
2005	Q1	74.9
	Q2	74.7
	Q3	74.8
	Q4	74.5
2006	Q1	74.6
	Q2	74.6
	Q3	74.5
	Q4	74.5
2007	Q1	74.3
	Q2	74.4

2.4 Just as importantly, the gap in employment rates between disadvantaged groups and the rest of the population has been shrinking - people at the bottom of the jobs ladder have gained most from the growth in employment:

Employment rates of disadvantaged groups [3]

	1997	2006	Change (percentage points)
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

2.5 The striking exception to this achievement is people with low/no qualifications, whose employment rate has fallen. This strongly suggests that the Government is right to insist on links between the welfare-to-work and training agendas.

Section 3: Local employment partnerships and the jobs pledge

3.1 The Government has an 'ambition' of an 80% employment rate. Their strategy for achieving this has five elements:

Moving people from economic inactivity to work, especially claimants who have been out of work for a long time.
Helping people from minority ethnic groups.
Concentrating on the cities with low employment rates, especially London.
Making sure people have the skills they need.
Work with employers.

3.2 The key policy in this strategy will be Local Employment Partnerships [4] that will offer a 'Jobs Pledge.' The Government aims to sign up large private and public sector employers to offer jobs to people with a labour market disadvantage, including lone parents and people on incapacity benefits (the Green Paper claims that this Pledge will produce a quarter of a million jobs for disadvantaged jobseekers.)

3.3 Unions certainly welcome the Government's attempt to improve job opportunities for people who want jobs but face discrimination, or are effectively excluded from jobs by a lack of flexible working arrangements or support services such as childcare.

3.4 The Government is more realistic than some media commentators, who often talk and write as if unemployment was no longer a problem. The Government is right to prioritise London and other cities where unemployment rates continue to be high. In 2006 the average unemployment rate for the UK was 5.3 percent, but there were twenty-two local authorities where the unemployment rate was half as high again or higher:

Local authorities with high levels of unemployment [5]

Authority	Unemployment rate (%)
Tower Hamlets	14.2
Newham	11.8
Hackney	11.6
Southwark	9.7
Nottingham	9.4
Barking and Dagenham	9.4
Lambeth	9.3
Haringey	9.2
Brent	9.2
Islington	8.9
Liverpool	8.8
Hartlepool	8.6
Leicester	8.6
Westminster	8.6
Waltham Forest	8.5
Greenwich	8.3
Newcastle upon Tyne	8.2
Hull	8.2
Camden	8.2
Lewisham	8.2
Middlesbrough	8.1
Merthyr Tydfil	8.0

3.5 The Government is also right to concentrate on helping economically inactive people. According to the latest figures, there are 37,446,000 working age people in the UK, of whom 27,870,000 are in employment. An eighty percent employment rate would be 29,957,000 - 2,087,000 above the current level. As there are only 1,622,000 unemployed people at present, it is plain that the eighty percent 'ambition' can only be achieved by helping economically inactive people into jobs as well. Fortunately, there are 2,078,000 economically inactive people who say they want jobs, so this should be achievable. [6]

Section 4: The flexible New Deal

4.1 The Green Paper announces plans to make the Government's active labour market programmes more flexible and individualised, customised to the needs of the individual, and offering training, help with health, childcare and financial support. The system will no longer limit itself to a 'work first' approach, focused only on getting people into jobs - it will offer better in-work support to help them to keep their jobs and progress in their careers. Just as the new system will be more individualised, so it will also be more localised, with countries, regions and cities having 'an important role in identifying strategic priorities and delivering solutions.' [7] In addition, the Pathways to Work programme will be rolled-out nationwide.

4.2 Unions will welcome this aspect of the Green Paper, which is very much in line with the TUC's aspirations for labour market programmes. Evaluations of the New Deals and other programmes introduced since 1997 have been very encouraging, but they have tended to show that they are most useful for those participants who were already closest to the labour market, and least effective in reaching those with extra problems. [8]

4.3 A recent Department for Work and Pensions review of research on the New Deal and other programmes [9] reinforced this message: for the majority of participants NDYP was still very helpful - the proportion of participants leaving the programme for jobs - 46% - was higher than early figures; but disadvantaged participants continue to gain less from the New Deal. [10]

4.4 Policy debates have therefore focused on how to help disadvantaged jobseekers. In our view, three factors are vitally important:

Providing help that is personalised to the needs of the individual jobseeker.
Quickly assessing and delivering this support.
Working with the grain of the jobseeker's attitudes and aspirations.

4.5 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 needed 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.' [11]

4.6 The DWP's 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.' [12]

4.7 To provide individualised support quickly labour market programme need to be flexible, allowing important decisions to be made by people working with the individual jobseeker or their managers. If the decision has to be made any further up the chain of command, the chances are that the support will take longer to arrive and will not fit the individual jobseeker.

4.8 The DWP's Working Neighbourhoods pilots, which came to an end in 2006, faced a number of problems due to rushed timescales, but still succeeded in helping socially excluded people into work. The evaluation of the programme [13] concluded that WN's strengths included its flexibility, with advisers able to respond to individual problems, rather than having to fit their clients into a range of pre-determined provision.

4.9 The What Works survey also noted that flexibility is 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.'^[14]

4.10 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. [15] We know that there are five factors that determine how likely a participant is to complete their New Deal option:

The match between their 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.

4.11 The TUC therefore strongly supports the message that, if it is going to help people who face extra barriers to employment, the New Deal needs to be made more flexible. We do not agree with the suggestion, first in the Freud Report, and now in the Green Paper, that this flexibility can only be achieved by handing responsibility for hard-to-help jobseekers to private and voluntary sector organisations.

4.12 This is a disappointing, because the Government has already described a model for a more flexible public sector New Deal in its proposed Building on New Deal (BoND) reforms. Under BoND, 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.

4.13 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, this has not happened. We agreed with the Select Committee on Work and Pensions, whose report on the Government's employment strategy was very critical of the failure to introduce BoND and called on the DWP to 'pilot BoND, or a programme based on the same principle.' [16]

4.14 The Government's response to the Select Committee indicated that BoND had been a casualty of the recent cuts in funding for the DWP, which forced a choice between BoND and the national roll-out of Pathways to Work.

4.15 Finally, the TUC welcomes the confirmation that Pathways to Work is to be extended nationwide. We have been strong supporters of this programme since it was first announced, and it continues to produce good results. It is, however, a shame that the level of funding has been reduced and that provision is to be via private and voluntary sector organisations; both decisions will reduce the programme's effectiveness.

4.16 The TUC would also take the opportunity to stress the advantages of investing more in rehabilitation services, given the high proportion of incapacity benefit claimants who have a musculoskeletal problem. All the available evidence suggests that early intervention and rapid access to rehabilitation significantly enhances the prospects of return to work after an injury, so reducing the costs associated with incapacity benefit and immeasurably increasing the quality of life and economic situation of workers themselves. The TUC welcomes the inter-agency work currently being undertaken in this area, for example the DWP's Task Group on Vocational Rehabilitation, and calls for early implementation of any agreed recommendations.

Section 5: Training

5.1 The TUC supports the objective to integrate employment and skills to aid in achieving sustainable employment. While it is right that people for whom skills are significant barriers to work receive appropriate pre-employment support, ongoing training in the workplace is also an extremely important aspect of boosting integration into sustainable employment over the longer term. The advice and guidance role will remain important in this respect. In the workplace, Union Learning Representatives can play an important role and efforts should be made by Government to support the trade union movement in developing the expertise of ULRs in this area.

5.2 To support the guiding principle of 'retention and progression, not just job entry' identified in the green paper, it is important that there is integration between the Jobs Pledge and the Skills Pledge. While the green paper notes that these two initiatives will be complementary (chapter 3, paragraph 14), the TUC believes that this should be taken further. In particular employers engaged in the Jobs Pledge should also be encouraged and supported to sign up to the Skills Pledge. By signing up to the Skills Pledge, both employees and employers will benefit from ongoing training and progression opportunities that will also aid in retention. Union Learning Representatives can also play a key role in this regard, supporting integration into work and further learning opportunities.

Section 6: Rights and responsibilities

6.1 The TUC believes that a fair balance of rights and responsibilities in the welfare state will mean that unemployed people should have duties to look for work and to maintain or enhance their employability. But equally, there is a long history of research showing that the vast majority of unemployed people desperately want jobs; they are not fraudulent or lazy.

6.2 Furthermore, jobseekers are not the only group with attitudes that can be an obstacle to achieving a higher employment rate. Some disadvantaged groups face severe employer resistance to recruiting them, amounting to discrimination:

'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.' [17]

6.3 While these discriminatory attitudes continue to exist, the TUC cannot be confident that the Jobs Pledge will be a sufficient guarantee of the availability of jobs to justify a harsher regime for disadvantaged and socially excluded groups of people.

Rights and responsibilities and unemployed people

6.4 The TUC is particularly concerned about the suggestion in the Green Paper that ' customers still on benefit after a defined period, having failed to find work through a specialist provider, would be required to undertake a period of full-time work experience - in the community or with a regular employer - to ensure that every customer gets the opportunity to refresh their work skills.' [18]

6.5 The TUC is concerned to support programmes that genuinely help unemployed people to get jobs, especially those who have been out of work for a long time. But equally, we are fundamentally opposed to the exploitation of vulnerable people, especially when this takes places with the assistance of the state.

6.6 Unions believe that 'the worker is worthy of his hire', and that it is an extreme form of exploitation to require someone to work without pay. Even when we talk about the work done by offenders in prison we believe that stringent rules should be followed, and unemployed people are not criminals: they are the victims of unemployment. The vast majority are not responsible for the fact that they are unemployed; if any blame is appropriate it should lie with those making decisions about redundancies and the management of the economy.

6.7 Mandatory unpaid work experience turns the support offered by Jobcentre Plus or contracting organisations into a punishment, and will undermine the relationship of trust that providers seek to build up with their clients.

6.8 Mandatory unpaid work experience is bad labour market policy. The advantages of a work experience programme in making unemployed people attractive to businesses lies in giving them recent realistic employment experience. One of the features of realistic work experience is that it pays a realistic wage - if a job really is worth doing (and if it isn't then it isn't realistic) then it is worth being paid the rate for that job. When recruiting, employers do not value a CV in which the most recent employment entry is a job into which the candidate had to be conscripted, so the experience does very little to enhance the unemployed person's employability.

6.9 Mandatory unpaid work experience for any extended period is a threat to existing workers and businesses. The more realistic the work experience (and thus, the more effective it is as labour market policy) the greater its value to the business where the unemployed person is working - and hence the greater the chance that workers who have to be paid the rate for the job will suffer from the unfair competition thus represented. Businesses that do not take on work experience placements will find that the Government is subsidising their competitors. Unions will therefore have an incentive to persuade employers not to take part, and that message is likely to be echoed from within the business communities on whom employers often rely for suppliers and customers.

6.10 If workers are only paid their benefits legislation will be needed to exclude them from the minimum wage. If they are working alongside people who are covered, the minimum wage will become much harder to enforce. The Commission on Vulnerable Employment established by the TUC has already received evidence that unscrupulous employers are exploiting confusion around the applicability of the minimum wage to escape paying the correct rate, this development would only exacerbate this problem.

6.11 Unions are increasingly concerned about the spread of unpaid work as a condition of entry to good jobs. This is especially noticeable in creative industries, media and even some high-end retail niches. We are finding that, in broadcasting and other fields that attract young people, a period of low paid or unpaid work is becoming a condition of entry. These industries are thus only open to those young people who can afford to go without a decent wage for a long period. It is difficult enough to counter this trend without the introduction of a policy that would create the same problem at the other end of the labour market.

6.12 In the past, unions have supported initiatives such as Work Trials, in which unemployed people try out a job for up to three weeks in a genuine vacancy and work 'tasters' in which unemployed people try a job for a day or two to get the feel of work. The difference from these proposals is that these programmes are voluntary and for a limited (short) period of time; furthermore, employers offer Work Trials with the expectation that if all goes according to plan, they will recruit the person to a normal contract.

6.13 The wording in the Green Paper seems to suggest that what the Government has in mind is a much longer, non-voluntary placement, with no expectation of a proper job at the end and no pay for the work being done. Unions will be fundamentally opposed to such a proposal.

Rights and responsibilities and disabled people

6.14 From time to time there are suggestions that sick and disabled people who receive incapacity benefits should be required to be available for work. [19] The Government often emphasises the fact that there are a million disabled people who say they want jobs. A million people is a large group, but it is worth bearing in mind that there are two million working age disabled people who do not want jobs, [20] and the TUC would strongly oppose any attempt to require them to be available for employment.

6.15 Some of these disabled people may have concluded that their condition rules out paid work. The TUC strongly believes that the large majority of working age people with impairments are capable of paid employment on an equal basis, and has campaigned for anti-discrimination legislation to turn that ability into a right. But people whose condition causes them pain or fatigue should not have to look for (or stay in) employment.

6.16 An even higher proportion of the incapacity benefit claimants who do not want jobs may well have decided that their experience of discrimination and exclusion indicates that, in practice, they are unlikely to get jobs. In 2005 the Chartered Institute for Personnel and Development found that, when recruiting, 33.1% of CIPD members excluded people with a history of long-term sickness or incapacity, even though such a policy would almost certainly leave employers very exposed should a disappointed applicant use the Disability Discrimination Act against them. [21] (The Government would, of course, be in a better position to criticise employers in this regard were it not for the fact that the DWP itself dismissed over 1,000 people last year because of health problems. [22] )

6.17 It is all very well to say that, in a non-discriminatory society, disabled people would have an equal chance of getting jobs, and therefore should have an equal duty to seek employment. We may have anti-discrimination legislation covering disability, but discrimination has not yet been abolished and it would be unfair to use theoretical rights to justify actual responsibilities.

6.18 A much better response to the poverty faced by disabled people would be an intensive take-up campaign, encouraging disabled people to claim the benefits to which they are entitled, especially Disability Living Allowance. DLA is claimable both in and out of work, and an increase in the take-up of this benefit would do a great deal to raise the incomes of disabled people without the risk of creating any disincentives to employment.

Rights and responsibilities and lone parents

6.19 The Green Paper follows the Freud Report recommendation that, from 2008, lone parents whose youngest child is aged over 12 should cease to be eligible for Income Support; they will have to switch to Jobseeker's Allowance instead. From 2010 this approach will be extended to lone parents whose youngest child is aged over 7 (a much larger group.)

6.20 The TUC supports the Government's objective of achieving a 70% employment rate for lone parents, but we think that forcing lone parents onto Jobseeker's Allowance is the wrong way to go about doing this.

6.21 The Government says its plans are not intended to ''punish' lone parents. Nor will we force lone parents into jobs.' [23] But this is hard to reconcile with the fact that lone parents affected by this policy will have no alternative to JSA, which requires claimants, as the main condition of eligibility, to be available for and actively seek employment.

6.22 For lone parents the first consideration will be the best interests of their child. They will be concerned about the quality of childcare available, but Jobcentre Plus will have the power to tell them that they cannot turn down a place and then say that this is why they are not available for employment. Despite the extension on childcare availability reported by the Green Paper, lone parents may find that childcare is not in fact available locally; legislation will be needed to protect them from being denied JSA if this happens. Local childcare may not be suitable for a disabled child or accessible to a disabled lone parent, or may not accommodate her cultural or religious needs.

6.23 We also believe that this tougher regime would be unfair to the large number of lone parents who are affected by poor health and disability.

Lone parent families' higher levels of poor health and disability [24]

	Lone parent families	Couple families
Proportion of mothers with poor health	15%	8%
Proportion of children with a 'long-standing health problem or disability'	19%	15%

Section 7: Contracting-out

7.1 The Government plans to make ' greater use of expertise across the private, public and third sectors at a national and local level, allowing Jobcentre Plus to focus on where it adds the greatest value.' [25] JCP will help people claim their benefits, will co-ordinate the network of partnerships and will be the main welfare-to-work agency in the early stages of a claim, but 'people on benefit for longer periods may be better served through specialist support which could be provided by the public, private or third sector, depending on what works.' [26]

'After 12 months customers would be referred to a specialist return to work provider from the public, private, or voluntary sectors who would provide the most appropriate intensive, outcome-focused service, funded on the basis of results.' [27] This handover might take place earlier for people on incapacity benefits and lone parents.

7.2 The TUC believes that that the impetus for this seriously mistaken policy may have come from budgetary pressures, not a desire for enhanced quality of service. Jobcentre Plus is already struggling to meet the Efficiency Programme targets of cutting 40,000 staff by 2008, and the Customer Management System that was introduced to cope with the cuts is a depersonalised system that has been plagued by long delays and errors in assessing benefit eligibility.

7.3 The Comprehensive Spending Review announced further cuts that have been reported as amounting to 5 percent, but this is in fact an average over the three years of the CSR period, and the cuts will grow during that time; the cut in 2010-11 will actually be 9.7 percent of the 2009-10 Departmental Expenditure Limit. The £500 million DWP modernisation fund may help to improve the technology, but it seems very unlikely that there will be sufficient resource to make it possible to increase the amount of staff time spent advising claimants.

7.4 It is difficult not to suspect that contracting-out is planned because the Department has recognised that it will be impossible to adopt new functions - or even continue with existing ones - after these cuts have been made. Contacting out should be seen as an aspect of cuts in services, not as a strategy for improving them.

7.5 This approach may help the Government to get past a short-term problem, but it will eventually come up against the fact that contracting-out is unlikely to improve the quality of services to disadvantaged clients. Contracting-out of any JCP services would tend to put the interests of providers ahead of those of claimants, and this danger is most worrying when those claimants are particularly vulnerable people. To achieve the highest possible returns providers will be tempted to concentrate the support they provide on those clients closest to employment and to pay for this by doing very little to help those with extra problems: 'creaming' and 'parking' as it is known.

7.6 This has already happened in Employment Zones. The first evaluation of the Zones found that contractors would categorise their clients as 'job ready'; 'near job ready'; 'not job ready' or 'unemployable'. People in this last group would only be offered fortnightly interviews with a minimum of any additional help, referral to free services from voluntary organisations or encouraged to switch to other benefits. [28] 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 . [29]

7.7 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.' [30]

7.8 In our view, given sufficient resources, Jobcentre Plus is perfectly capable of administering a more flexible New Deal. We have already mentioned the example of BoND, still our preferred option for reform. 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.' [31] This would also be a very good way forward.

7.9 We would not argue 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.

7.10 This has already happened in the New Deal programmes, but the Green Paper proposals would end JCP's role in providing direct support for disadvantaged jobseekers. This is planned despite the fact that there is no evidence that JCP is incapable of doing this work at least as effectively as any other organisation. 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.' [32]

7.11 Employment Zones, for instance, are often described as outperforming the New Deal 25+ (mainly JCP) but the two programmes achieve remarkably similar performances when measured in terms of cost per sustained job: [33]

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

7.12 The evaluation of Action Teams for Jobs found that those run by Jobcentre Plus out-performed 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.' [34]

7.13 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.' [35]

Contracting out to faith organisations

7.14 Early in 2007, at a seminar on 'What role for faith groups in today's welfare state?', Jim Murphy MP, the then 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.' [36]

7.15 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.

7.16 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.

7.17 Without America's constitutional protections, there is a risk that some 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.

7.18 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. We therefore 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.

7.19 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 8: Conclusion

8.1 The TUC supports the Government's objectives of fighting poverty and raising the employment rate, and we strongly support the decision to help disadvantaged jobseekers by making the New Deal more flexible.

8.2 Unfortunately, we do not believe that the Green Paper plans achieve a fair balance of rights and responsibilities for lone parents or unemployed people, and we fear that contracting-out of provision will short-change those most in need of the system's support.

[1] Labour Market Statistics, September 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.

[2] LFS historical data, UK, seasonally adjusted, taken http://www.statistics.gov.uk/downloads/theme_labour/LFSHQS/Table02.xls on 28/09/2007 15:35.

[3] Opportunity for All data, DWP, September 2006, downloaded from http://www.dwp.gov.uk/ofa/indicators/indicator-19.asp on 28/09/2007 15:52. GB data, first figure for disabled people is 1998, not 1997.

[4] Announced in the 2007 Budget.

[5] Economic & Labour Market Review, ONS, October 2007, table 6.02.

[6] Labour Market Statistics, September 2007, ONS, tables 1 & 13.

[7] Op cit, p 31.

[8] See for instance: The Geography of Workfare: Local Labour Markets and the New Deal, Peter Sunley and Ron Martin, Economic and Social Research Council, 2002; National Survey of Participants, A Bryson, G Knight and M White, PSI, ES report ESR44, March 2000; 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; 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; Evaluation of the New Deal 50plus: Summary Report, John Atkinson, Institute for Employment Studies, Employment Service report ES103, 2001.

[9] 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.

[10] Ibid, para 3.4.

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

[12] Op cit, para 4.4.

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

[14] Hasluck and Green, para 10.4.

[15] 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.

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

[17] Ibid, para 9.4.

[18] Op cit, p 50.

[19] 'Doubt of the Benefit', Nick Robinson, 30 January 2007, downloaded from http://www.bbc.co.uk/blogs/nickrobinson/2007/01/doubt_of_the_be.html on 19/02/2007 16:24.

[20] Calculated from para.s 75 and 76 of Opportunity for All, DWP, 2003, which uses LFS data: 'Of the 6.9 million disabled people of working age, almost half are currently in employment. ... A million of the disabled people who are out of work say they would like to work.' If fewer than half the 6.9 million are in work, and 1 million are not in work but want jobs, then this must leave at least 2.45 million who are not in work and do not want jobs.

[21] This figure is even more startling when one notes that this is a survey, not of employers generally, but of CIPD members, whom one might expect to be more enlightened, or at least more aware of the law. Labour Market Outlook, CIPD, Summer/Autumn 2005, CIPD, table 11, downloaded from http://www.cipd.co.uk/NR/rdonlyres/2C1E0C81-A6EF-47AC-9EE0-04C1CAC7E46F… on 19/02/2007 16:44.

[22] Information from PCS.

[23] Green Paper, p 44.

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

[25] Green Paper, p 10.

[26] Ibid, p 15.

[27] Ibid, p 49.

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

[29] 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.

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

[31] Capability Review of the DWP, Cabinet Office, 2006, p 6.

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

[33] Freud report, table 5.

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

[35] 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.

[36] 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.

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