Active Labour Market Policies in the UK - What Lessons Can Be Learned from the British Experience?

1. Active Labour Market Policies in the UK - What Lessons Can Be Learned from the British Experience? Michelle De Cort Economy and Labour Market Policy

2. This presentation will cover... • The UK labour market today • How have we got there? • What next?

3. The UK has one of the highest employmentrates in the world Percentage of the working age population in work

4. ….and is a key success story for the UK • Employment is high by historical standards

5. …with high employment across most groups Source: OECD Employment Outlook 2007

6. …at low cost Expenditure on labour market programmes as a % of GDP Source: OECD

7. HOW HAVE WE GOT THERE?

8. Key elements that have contributed to the success so far… • Macroeconomic stability • Flexibility and Diversity • Making work pay • Active labour market policies

9. Labour market policies 1997 to 2001: focus on claimant unemployment • Built on Jobseeker’s Allowance (JSA) – one benefit for all unemployed – and Employment Service – one stop shop for all unemployed. • JSA system:- • rights & responsibilities • focus on individual with regular contact throughout claim. • ‘Work first’ • Increased help as duration increases culminating in the New Deal • Introduced New Deal for Young People and later New Deal 25+. • Achievements: youth long-term claimant unemployment down 90%. Overall claimant and long-term unemployment lowest for 30 years.

10. Labour market policies 2001-2008: focus on all benefits, particularly ‘inactive’ benefits • Established and rolled out Jobcentre Plus – one stop shop for all benefits not just unemployment benefits. • Introduced work-focused interviews and New Deals for lone parents and people on incapacity benefits. • Achievements: world leader in this area. Benefits now falling after decades when only way was up. • Jobcentre Plus purpose: • “Work for those who can, support for those who cannot”

11. Labour market developments since 1997

12. WHAT NEXT?

13. But still have high aspirations - full employment is our goal • Tackling poverty • Responding to the challenges of demographic change and globalisation • Work is good for you An employment rate of 80%, with employment opportunity for all

14. …and stubborn barriers exist in getting to that ambition • 3 million people of working age have been on benefit for over a year, many on incapacity benefits • there are nearly 3 million households in which no-one works, and 1.7 million children are growing up in these households • 5 million adults are not functionally literate and 17 million have difficulty with numbers • Of the 5.1m Jobcentre Plus customers – 38% lack functional literacy, and 45% lack functional numeracy

15. …so embarking on next stage of welfare reform • “We are clear that in future, good training to develop the skills that employers want has to be a central part of helping people into jobs, and helping people stay in jobs. Our goal is sustainable employment, not cycling between short term work and repeated spells on benefit. We want to support progression in work as well as entry to work.” • Peter Hain, Secretary of State for Work and Pensions, November 2007

16. …with 5 key principles • a stronger framework of rights and responsibilities • a personalised, responsive and more effective approach • not just jobs, but jobs that pay and offer retentionandprogression • partnership – the public, private and third sectors working together • devolving and empowering communities

17. A stronger framework of rights and responsibilities • Sick and Disabled People • Employment and Support Allowance will replace incapacity benefits for new customers from October 2008. • Lone Parents • Lone parents currently on Income Support will be expected to look for work when their child reaches 12 from autumn 2008, 10 from October 2009 and 7 from October 2010. • Alongside increased expectations there will be access to skills advice, childcare and employment support to find work, for example New Deal for Lone Parents

18. A personalised, responsive and more effective approach • flexible New Deal • Modernising and rationalising existing New Deal, focusing support on the needs of individual jobseekers. • Expectations and support for Jobseekers increases as the duration of the claim increases - recognising that majority of people leave Jobseekers Allowance within the first year. • Jobcentre Plus provision for first 12 months, then private sector provision - with a focus on sustained employment. • Pathways to Work • Programme of support for those with a health condition or disability to overcome barriers to work • Six mandatory work focused interviews have been effective, increasing the chances of a new customer being in work • From April 2008 will be available to everyone in the UK and will be rolled out to existing customers aged under 25 from 2009

19. Not just jobs, but jobs that pay and offer retentionandprogression • Increased emphasis on skills as well as employment support • Early screening of all benefit customers to identify literacy, numeracy and English language needs • Partnership between Jobcentre Plus and the new adult advancement and careers service to provide detailed skills advice and support • Piloting mandatory training for jobseekers after six months, subject to adviser discretion • Enabling jobseekers to take up short, full-time, employment focused training to support a return to work • Supporting lone parents to stay in and progress in work

20. Partnership – the public, private and third sectors working together • Employers commit to make more of their jobs available to people disadvantaged in the jobs market: we reduce the cost and risk • Jobcentre Plus arrange work trials, pre-recruitment preparation, sifting, reviews of recruitment practices etc • The target is 250,000 people into jobs by December 2010 • Joining up the employment and skills agendas Local Employment Partnerships - a partnership between Jobcentre Plus, employers and jobseekers

21. Commissioning - a new partnership • Longer, larger contracts and greater flexibility in provision delivery • Our relationships with providers will be more strategic and based on shared understanding of government objectives • A focus on place with providers taking a more strategic role • We’ll increasingly link with local delivery mechanisms • Smaller, specialist providers will be encouraged to flourish and develop

22. Devolving and empowering communities • focus effort on the most deprived neighbourhoods • support local authorities and communities to tackle worklessness and low levels of skills and enterprise • add value by complementing mainstream services • give local authorities flexibility to achieve the objectives which matter to local people • include a significant reward element to incentivise success • CLG and DWP have together created a new Working Neighbourhoods Fund, worth £1.5bn to 2010-11. The fund will:

23. Local authority Learning and Skills Council Jobcentre Plus Consortium Primary Care Trust Regional Development Agency Employers Testing localisation through the City Strategy

24. Conclusion • The UK has a strong labour market by historical and international standards • But we have aspirations to aim even higher, moving to an 80% employment rate • Will be very challenging and so reform is essential to getting there: • In return for greater obligations on people, much stronger emphasis on providing tailored employment and skills support; and • Recognition that everyone has a part to play in helping individuals - employers, the public, private and third sectors and local areas

25. Any questions…or answers? Department for Work & Pensions www.dwp.gov.uk Jobcentre Plus www.jobcentreplus.gov.uk New Deal employment programmes www.newdeal.gov.uk Learning & Skills Council www.lsc.gov.uk