Private firms and charities should be given a bigger role in providing back to work support, as Britain’s faltering £1.4 billion-a-year network of job centres is letting unemployed people down, according to a major new report.
The state-run Jobcentre Plus (JCP) network should be remodelled on the lines of the marketbased Australian system, which has proved a world leader in getting people back into work, the report says.
The report from the Centre for Social Justice (CSJ), the think tank that designed the Coalition’s Universal Credit welfare reform, identifies a string of problems with the current UK system. The CSJ’s new report finds that JCP focuses far too much on arranging benefits for claimants instead of identifying the factors that are preventing them from getting work and staying in work.
The main measure of job centres, the so-called “Off-flow”, only looks at how quickly people stop claiming benefits and not whether they have found a job. The report also highlights “churn” in the system – 40 per cent of claimants who move off Jobseekers Allowance make another benefits claim within just six months.
“The black hole of information about such an important part of the Jobcentre’s role is alarming and needs to be urgently rectified,” the report, to be published today (July 9,2013), says.
In evidence to the CSJ, the Employment Related Services Association (ERSA) – which represents Work Programme providers – said: “A high proportion, perhaps as high as 1 in 4 [claimants moving on to the Work Programme], present with no up-to-date CV, even though by definition almost all will have spent at least a year with Jobcentre Plus.”
The CSJ report finds that, given the success of the Australian model, there is a compelling case for utilising the expertise of the private and voluntary sectors to deliver tailored support to all claimants.
Christian Guy, Director of the CSJ, said: “Huge sums of public money are being spent on a system that is missing the point – but much worse is the human cost of worklessness and the devastating impact it has on people and communities.
“This report reveals deep-seated weaknesses within the JCP network. It does not prioritise getting people into lasting jobs and many become trapped in cycles of worklessness as a result.
“We need a radical new approach if we want to transform lives and tackle unemployment. The state monopoly should be broken and innovative charities and private firms should be allowed to assist jobseekers who are crying out for help.”
During its research, the CSJ spoke to unemployed people, many young, who complained that JCP made little effort to help them find work. Some objected to ‘box-ticking’ and accused the agency of promoting welfare dependency.
The report also notes that Australia is unique among Organisation for Economic Co-operation an Development (OECD) countries in that its mainstream employment services are delivered by over 100 profit-making and non-profit providers on a payment-by-results model.
As the study explains, the Australian system operates with all jobseekers being assessed and categorised into different streams based on their level of disadvantage in the labour market, triggering referrals to a network of welfare-to-work providers.
The CSJ’s report, Up to the Job?, argues that such reforms would help achieve significant reductions in the number of people unemployed, while increasing the number of people in sustainable work. The CSJ report is published against the background of data showing that the UK continues to have a serious unemployment problem. Although headline data for employment is increasingly positive, there are 2.5 million people unemployed. Around 750,000 people are still parked on incapacity benefits and waiting for reassessment. The picture is also bleak for young people – there are more than 650,000 16-24 year olds, excluding those in full-time education, out of work.
Mr Guy added: “The Government’s Universal Credit reforms will shake-up the broken welfare system and make sure that work is worthwhile for people – but that has to represent phase one of reform. The next stage needs to be a revolution in how we offer support to those trying to get back into work.”
The report also shows that frontline JCP advisers are paid less than the national average wage, meaning that good advisers move away from working with clients to earn more in management or elsewhere – the CSJ calls for increased pay for effective advisers. It also calls for a new performance measure based on people finding work and staying in it, and the transfer of greater freedoms to JCP staff and local managers, including in setting their Centre’s pay levels and structure.