Welfare to work inquiry

The Work Programme has streamlined the procurement of welfare-to-work, created a stable, GB-wide welfare-to-work infrastructure, and now produces a similar level of job outcomes for mainstream participants as previous programmes. DWP deserves credit for implementing a programme which, in general, produces results at least as good as before for a greatly reduced cost per participant.

Yet too many long-term unemployed people remain out of work after two years on the programme. It must not be forgotten that nearly 70% of participants are completing the Work Programme without finding sustained employment. In particular, the Work Programme is not working well for people with more complex or multiple barriers to employment who need more intensive help. We have a duty to the 70% to do much better.

The focus for the next set of contracts must be to identify claimants who require more personalised and intensive support to address complex barriers to working, and refer them to appropriate help more quickly. To achieve this DWP needs to:

• Develop and introduce a new, standardised, characteristic-based assessment of claimants’ barriers to work, for use across the employment support sector; • Replace the Work Programme’s complicated and less than effective differential payment model with a much simpler payment model with clearer (and generally earlier) referral points, and which more directly incentivises providers to invest resources in supporting people with complex needs; • Ensure that all participants receive an acceptable level of service, by introducing a single set of measurable minimum standards; and • Maintain, and ideally expand, a separate employment programme for disabled people, while also addressing key flaws in the current Work Choice programme.

Improved assessment and triage, alterations to contracts and more effective payment models will help, but are only part of the answer. The Government will also need to encourage, facilitate and invest in:

• More effective integration of employment support with related, locally-run services, including health, education and skills, and housing; and • Creating the conditions for genuine innovation, learning and dissemination of best practice across the employment support sector.

DWP should establish an Employment Support Innovation Fund, set at 2–3% of the total budget for the next mainstream programme, which should be used to test and develop innovative and effective approaches to employment support for groups which have been poorly served to date. The Cabinet Office should bring labour market policy into the remit of a What Works Centre, so that employment programmes can continue to evolve based on robust evidence of what is most likely to be effective for different types of people in different localities.