Welfare to work: a model for all

9 February 2015

Now in its fourth year, the Work Programme has proven to be a cost effective and innovative way of engaging people in the journey to sustained employment. If the next iteration of the Work Programme is to build on current achievements, collectively we need to identify the elements of the model that are working well, alongside the adjustments that are needed to further improve the model and deliver even better outcomes for participants.

There are many reasons, based on evidence, to be positive about the Work Programme. Overall, since its roll out in June 2011, it has delivered substantial benefits across the UK. Statistics from the Employment Related Services Association show that 639,546 long-term unemployed jobseekers have been supported into employment by the end of September 2014. The Work Programme is particularly effective for young people, with 160,729 JSA claimants aged 18-24 moving into work. In addition, its value should not be underestimated: independent research by Europe Economics valued the Work Programme’s long-term contribution to the economy at £18 billion (October 2014).

This success is largely due to the design of the Work Programme, which gives providers the longevity, certainty and flexibility to innovate and deliver the best possible support to customers, whilst driving competition in performance. Payment by Results (PBR) has ensured providers are only paid when they have moved someone into sustained employment, with Government using the savings it generates from benefit reductions to fund the programme. The prime contractor model drives value for money by enabling economies of scale, whilst harnessing the services of a huge number of specialist organisations from the voluntary, public and private sectors. This has enabled A4e to provide integrated support for participants through strong relationships with partners such as local authorities, financial advice services, statutory health services, Jobcentre Plus (JCP) and housing associations.

The Work Programme is delivering positive results for the majority of claimants, but the challenge is to ensure it is configured to provide the most effective support for the “hardest to help”, who frequently have health conditions. Since the start of the programme, the cohorts of individuals referred have changed greatly, with providers increasingly likely to be working with customers facing complex and multiple barriers to work. For example, 31 per cent of our customers receive Employment Support Allowance (ESA) and the number of participants with a prognosis of at least 12 months until they can work is increasing. Overall, provider performance with ESA claimants is improving, with more claimants moving into work year-on-year. Indeed, for new ESA claimants (excluding 12 month prognosis claimants), the programme is outperforming targets. However, to boost the overall performance of the Work Programme for the “hardest to help” some vital adjustments are needed.

When a claimant first engages with JCP, a “needs-based” assessment tool should be used to evaluate an individual’s readiness for work. For many people, particularly those with mental health problems, the longer they are unemployed, the more chronic their challenges can become. Those jobseekers assessed as the most disadvantaged using this new tool should be referred to the Work Programme on day one of their claim, minimising the risk of their condition deteriorating or becoming more entrenched. It would also help to reduce the number of people “cycling” within the system, missing out on required support. Following that, providers should be allowed to work for longer with individuals who require additional support, and they should be rewarded for a participant’s distance travelled towards sustainable employment, since it can take many months to overcome complex barriers to employment.

Employers are crucial to this, and should be encouraged to recruit the “hardest-to-help” particularly by increasing awareness of the support available through Access to Work funds. In addition, skills funding should be locally coordinated to meet the demands of businesses, which requires better alignment of the performance indicators of the Department for Work and Pensions (DWP) and the Skills Funding Agency to focus on those furthest from the jobs market. Longer term ambitions could include investigating the benefits of customer choice and introducing personal budgets for the most disadvantaged jobseekers to enable different public service budgets to be better co-ordinated. Once in work, providers could continue to help customers to progress and move out of relatively low pay; however a strong evidence base of successful interventions would need to be developed in advance.

An incoming government should retain the features of the Work Programme that have proven to deliver success, including regional scale and infrastructure, PBR, longevity and the black box. However, they should build on the model, augmenting it to enable greater support to be given to the hardest to help. This will help ensure that we continue to deliver substantial results in a cost effective way, whilst supporting even more jobseekers into sustainable employment.

Andrew Dutton, Chief Executive, A4e

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