Get Britain Working: Employment Support Reform

Eamonn DavernHead Jobcentre Plus International RelationsGdansk January 25th 2012

The problem

•most who come onto benefit leave quickly – over half within 3 months…

• …but some get stuck and need more support to avoid long term unemployment

Proposition…

• it costs a lot to keep people on benefit – could we spend some of that to help people back to work?

The Work Programme

• Biggest of its kind the UK has ever seen

• For those at risk of long term unemployment

• 2.4 million expected referrals

• Replacing much of the complex range of poor value existing provision

• Flexibility, results focus, partnership working

How will the Work Programme be better?

• Longer to work with customers

• Black box (but transparent, with safeguards)

• Integrated – All JSA and ESA customers can access

• More sophisticated payment model

Payment model

Payment(£)

Time on Programme(Weeks)

Job StartStart on Programme

Sustainment paymentsJob

Out

com

e P

aym

ent

Att

achm

ent F

ee

Start of additional weeks in work beyond deadweight period

Payment(£)

Time on Programme(Weeks)

Job StartStart on Programme

Sustainment paymentsJob

Out

com

e P

aym

ent

Att

achm

ent F

ee

Start of additional weeks in work beyond deadweight period

*Incentive payments

Customer Groups Time for referral

•JSA customers aged 25+

•JSA customers aged 18-24

•JSA ex-IB

•JSA seriously disadvantaged in the labour market

•All ESA customers

•ESA (income related) customers who are placed in the Work Related Activity Group

From 12 months

From 9 months

From 3 months

From 3 months

Voluntary at any time

When customers are expected to be fit for work within 3 months

Universal Programme

Differential pricing: Maximum payments

£0

£1,000

£2,000

£3,000

£4,000

£5,000

£6,000

£7,000

£8,000

£9,000

£10,000

£11,000

£12,000

£13,000

£14,000

£15,000

£400

£1,200

£2,800

2. JSA 25+

£400

£1,200

£2,200

1. JSA 18-24

£400

£1,200

£5,000

4. JSAseriously

disadvantaged

£400

£1,200

£5,000

3. JSA Ex-IB

£600

£1,200

£4,700

6. ESA Flow

£600

£3,500

£9,600

7. ESA Ex-IB5. ESA

£400

£1,000

£2,300

volunteers

Sustainment

payments

Job outcome

payment

Attachmentfee

Avoid paying for ‘do nothing’ outcomes

• Some would find jobs without help

• Will only pay for a job outcome for the unemployed after 6 months in work

• Providers have to beat ‘do nothing’ outcomes to keep contracts

10. Paying for results out of benefit savings

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 4 8 12 16 20 24 28 32 36

Months

Additional savingfrom Work Programme

Cohort of customers on benefit

Remaining cost of paying benefits

Saving from normal off-flow without intervention

Prime providers

• At least 2 per contract package area

• Will compete for market share

• 7 year contract – long term relationships

• Greatest ever freedom and financial incentives to succeed

In conclusion

• Real innovation

• Powerful incentive to help people into work

• With other welfare reforms real chance of success