The Work Programme is working

By Harry Phibbs
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If you read the Financial Times this morning you would have a seen a report that the Work Programme was proving effective, other newspaper reports were more negative.

Last November the programme had been criticised although it had placed "only" 200,000 people into jobs. Whether or not that criticism was reasonable it has certainly made progress. The independent Employment Related Services Association published new data today, stating that 321,000 people have entered work as a direct result of the Work Programme

The ERSA go on to say:

• A third of all individuals who have been on the programme for at least a year have found employment.
• The Work Programme is proving particularly effective in tackling youth unemployment, with 88,000 young people on Jobseekers Allowance on the programme found work by the end of March 2013.  Of those young people who had been on the scheme for at least a year, 45% had had a Job Start, while 49% of those who had been on the programme the longest had entered work.
• The rate at which providers are placing jobseekers into work is increasing. All months since May 2012 show a higher number of people entering work than at a comparable point in the previous year.

Is the Work Programme good value for money? It certainly is for the taxpayer. Those companies and charities running the programme are paid by results. There is an incentive to innovate, to cater to the needs of the individual. It is the biggest ever payments by results programme the DWP have undertaken. Theer are over voluntary sector groups who are having a go - including Mencap, the Citizen's Advice Bureau, youth charity The Prince's Trust and Action for Blind People.

Naturally some of those bodies running the Work Programme will do better than others, some will hit their targets, some won't. However under Iain Duncan-Smith, the taxpayer is paying around £2,000 per job - Labour's "Flexible New Deal" paid £14,000 per job for the 50,000 jobs it placed people in. Of course we can all say that placing 321,000 unemployedin work is not enough, that we need to do better. However the outfit that only found jobs for 50,000 - at much greater cost - are not in the best place to criticise.

Another comparison is with Labour's work experience scheme, The Future Jobs Fund for which each placement cost £6,500. The coalition government Work experience comes in at around £325 per placement. Not only is it 20 times cheaper but is also shown to be far more effective at getting people off
benefits and into work. With the Future Jobs Fund nearly half of participants were back on benefits as soon as the six months of their placement were up.
 
Of course the quality of help is crucial. We can easily imagine how the prescriptive, centralised, box ticking approach of the Labour Government was bureaucratic. Both expensive and ineffective.

However even more important is reality that for those able to work sitting at home on benefits is ceasing to be an option. Those who don’t find jobs via the Work Programme will go through a Community Work Programme where they work 30 hours a week for 26 weeks to contribute to their community. For claimants refusing to participate, benefits will be withdrawn for three months for the first offence, six months for the second, and three years for the third.

We will have some official figures out next week from the Department for Work and Pensions. One point that is often missed out is the number who when invited to take part in a Work Programme stopped claiming benefits rather than participate. As of last November that was 150,000. That number will have since risen.

Were those 150,000 people who were already working illegally in the black economy while claiming benefits? Some will have been. The Institute of Economic Affairs recently estimated the black market  as being about 10% of economic transactions - which would be £150 billion a year. Who knows.

I'm sure there will have been others among that 150,000 who had simply got sucked into idleness. They were paid for doing nothing and accepted the offer. Don't blame them - blame the system which punished and mocked those who worked.

At any rate many of those on benefit then told they had to work preferred to make their own arrangements. They would rather sort themselves out with a job rather than rely on the state to fix something up for them. Good for them. To my mind those 150,000 should be counted as a success of the programme along with the 321,000 who actually signed up. However that does also indicate that challenge for those providing the Work Programme - that those who sign up are in need of help.

It is still early days. There  are still many on the Work Programme for whom finding a job will be tough. Yet as Conservatives we should be proud of what Iain Duncan Smith is doing on this.