RESEARCH PAPER 05/61 30 SEPTEMBER 2005

Employment and Training Programmes for the Unemployed Volume I: Recent developments and the New Deal programmes

This Research Paper, in two volumes (RP 05/61 and RP 05/62), provides an overview of the main Government-funded employment and training programmes. It also contains brief notes on earlier programmes in operation since 1945 and on recent policy developments. The Paper updates Research Note 90/25 (Training, Enterprise and Employment Schemes) and Research Papers 93/40, 94/114, 95/51, 96/66 97/98, 98/111, 00/81 and 03/13 (Employment and Training Schemes for the Unemployed).

Edward Beale

ECONOMIC POLICY AND STATISTICS SECTION

HOUSE OF COMMONS LIBRARY

Recent Library Research Papers include: 05/46 Modernisation of the House of Commons 1997-2005 14.06.05

05/47 Unemployment by Constituency, May 2005 15.06.05

05/48 The Racial and Religious Hatred Bill [Bill 11 of 2005-06] 16.06.05

05/49 The Violent Crime Reduction Bill [Bill 10 2005-06] 17.06.05

05/50 Regulation of Financial Services (Land Transactions) Bill 17.06.05

[Bill 7 of 2005-06]

05/51 Civil Aviation Bill [Bill 12 of 2005-06] 23.06.05

05/52 The Immigration, Asylum and Nationality Bill [Bill 13 of 2005-06] 30.06.05

05/53 Economic Indicators, June 2005 01.07.05

05/54 Unemployment by Constituency, June 2005 13.07.05

05/55 The London Olympics Bill [Bill 45 of 2005-06] 14.07.05

05/56 Armed Forces (Parliamentary Approval for Participation in 08.08.05

Armed Conflict) Bill [Bill 16 of 2005-06]

05/57 Unemployment by Constituency, July 2005 17.08.05

05/58 Zimbabwe after the 2005 parliamentary election 18.08.05

05/59 Employment tribunals (Representation and Assistance in Discrimination 26.08.05

Proceedings) Bill [Bill 14 of 2005-06]

05/60 Unemployment by Constituency, August 2005 14.09.05

Research Papers are available as PDF files: • to members of the general public on the Parliamentary web site, URL: http://www.parliament.uk • within Parliament to users of the Parliamentary Intranet, URL: http://hcl1.hclibrary.parliament.uk

Library Research Papers are compiled for the benefit of Members of Parliament and their personal staff. Authors are available to discuss the contents of these papers with Members and their staff but cannot advise members of the general public. Any comments on Research Papers should be sent to the Research Publications Officer, Room 407, 1 Derby Gate, London, SW1A 2DG or e-mailed to PAPERS@parliament.uk ISSN 1368-8456

Summary of main points The purpose of this Research Paper is to provide a brief account of the many Government-funded training, employment and job search programmes which form part of the strategy to alleviate the problem of long-term unemployment. It is intended as a reference work rather than necessarily to be read from cover to cover. The Government’s policy framework underpinning its Welfare to Work agenda aims to include:1

• active labour market policies – tailored and appropriate help for those without work, to prevent long term detachment from the labour market;

• policies that reduce barriers to work – including education, skills, childcare and training policies to create an adaptive, flexible and productive workforce; and

• policies that make work pay. This paper broadly covers the first two of these elements. The third element, which includes reform of the tax and benefit system, and the introduction of the National Minimum Wage to improve incentives to work, is not covered by this paper. The paper has been split into two separate volumes. Volume I (RP 05/61) discusses recent developments such as the establishment of Sector Skills Councils and the Building on the New Deal proposals. Each of the six individual New Deal programmes which are central to the Government’s Welfare to Work strategy are also summarised in this volume. Volume II (RP 05/62) summarises all of the other programmes and pilots which are currently available. This volume also provides brief details of employment and training programmes implemented since 1945, as well as listing the major sources used in compiling the paper.

1 HM Treasury, Budget 2005, March 2005, HC 372 2004/05, Chapter 4, pp81-82

CONTENTS

I Recent Developments 7

A. Sector Skills Councils 7

B. The Skills Strategy 9

C. The New Deal for Skills and “Building on the New Deal” 14

D. Funding Welfare to Work 22

E. DWP targets and the 2004 Spending Review 24

II The New Deal programmes 25

A. New Deal for Young People 25

B. New Deal for 25 plus 38

C. New Deal for Partners 47

D. New Deal for 50 Plus 53

E. New Deal for Disabled People 65

F. New Deal for Lone Parents 76

III List of abbreviations 87

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I Recent Developments

A. Sector Skills Councils

Between October 2001 and August 2002, Sector Skills Councils (SSCs) gradually replaced the network of National Training Organisations as the Government’s recognised industry training bodies. SSCs are licensed by the Secretary of State for Education and Skills, in conjunction with Ministers in Scotland, Wales and Northern Ireland. They have the task of defining the skills and productivity priorities confronting their sectors and developing strategies to deal with them accordingly. Estelle Morris, the Secretary of State for Education and Skills at the time, outlined the SSC’s primary aims in a speech to the Employers Skills Summit on 16 October 2001.2 They are to:

• Reduce skills gaps and shortages. • Improve productivity and performance. • Increase employment across the sectors’ workforce. • Improve training frameworks and standards.

A Lords written answer gave further detail:3

Baroness Ashton of Upholland: Sector skills councils (SSCs) … work with employers, Government and relevant agencies such as the Learning and Skills Council (LSC) to deliver specific action, including apprenticeships and occupational standards where these are relevant and the innovation of new approaches to identified skills and productivity problems. SSCs will receive up to £1 million each year from my department to fund their core work. We expect that SSCs will attract additional investment from their sectors to deliver further work their sectors require … SSCs are accountable to the Secretary of State, through the Sector Skills Development Agency (SSDA), for the use of public funds in meeting their core task. As employer-led bodies, SSCs are also accountable to their sectors for their performance and any services directly delivered for a sector's benefit.

The move towards SSCs was officially launched on 17 October 2001 with the publication of the DfES policy guide Meeting the Sector Skills and Productivity Challenge.4 The policy guide concluded that the key to improving productivity of the UK workforce was the development of skills. It recognised that employers are best-placed to identify where there are gaps in the skills of their workforce and equally well-placed to create strategies to close these gaps.

2 DfES press release, 16 Oct 2001: http://www.dfes.gov.uk/pns/DisplayPN.cgi?pn_id=2001_0358 3 HL Deb 29 April 2002 c77-78W 4 DfES, Meeting the Sector Skills and Productivity Challenge, October 2001

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The introduction of SSCs was seen as a key requirement for the successful implementation of the policy goals of the then recently established Learning and Skills Council:5 6

The creation of the LSC in England, along with comparable bodies in the devolved administrations, means that training now has a real skills focus. The new Sector Skills Councils will be able to tap into that. They will have a key role to play in helping the LSC achieve its mission to raise the skills level of our workforce to match the best in the world by 2010.

SSCs are also seen as a key driver for the Government’s Skills Strategy. The Government envisages that the network of SSCs will be “… the main voice for employers and employees in each sector, identifying sector skill needs and how best to meet them. New sector skills agreements will have powerful leverage over the supply of training and skills at regional and local level”.7 The importance of SSCs to the Skills Strategy was also highlighted in the following Parliamentary Question:8

Tony Lloyd: To ask the Secretary of State for Education and Skills if he will make a statement on the Government's policy on addressing skills shortages through programmes developed in conjunction with the Learning and Skills Council. [162129]

Mr. Ivan Lewis: The Skills Strategy White Paper—"21st Century Skills, Realising Our Potential"—set out our ambitious programme to tackle skills shortages. It commits the Government, the Learning and Skills Council and other key partners to a radical strategy of demand-led provision of skills, meeting the needs of employers as expressed through the new Sector Skills Councils, 12 of which are already licensed. New Regional Skills Partnerships will bring together the key players to ensure specific regional skills shortages are addressed, and the whole strategy is overseen at a national level by the Skills Alliance.

There are currently 24 SSCs in operation. A full list may be found on the SSDA’s website.9 Library Standard Note SN/EP/316410 provides more detailed information on SSCs.

5 The Learning and Skills Council is responsible for funding and planning education and training for over

16-year-olds in England. It was established in April 2001. For further information see the LSC website: http://www.lsc.gov.uk/National/default.htm

6 DfES press release, 16 Oct 2001: http://www.dfes.gov.uk/pns/DisplayPN.cgi?pn_id=2001_0358 7 ibid. pp23-24. For further information on the National Skills Strategy see Library Standard Note

SN/EP/2589. 8 HC Deb 18 Mar 2004 c477W 9 http://www.ssda.org.uk 10 All Library Standard Notes mentioned in this Research Paper are available to Members of Parliament

and their personal staff on the Library intranet.

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B. The Skills Strategy

The Government set out its Skills Strategy on 9 July 2003 in a White Paper published by the Department for Education and Skills (DfES), the Department of Trade and Industry (DTI), HM Treasury and the Department for Work and Pensions.11 On 22 March 2005 the Government published a follow up to the 2003 White Paper titled Skills: Getting on in business, getting on at work.12 The delivery of education and training are devolved matters. Therefore, the two Skills Strategy White Papers relate primarily to England. Sector Skills Councils, however, cover the whole of the UK.13 1. 2003 Skills Strategy

In March 2003, the Government set out its analysis of the main skills problems facing the UK.14 These included:

• employers’ perception that their recruits do not have the right skills; • particular skills gaps in basic skills (including literacy, language, numeracy and IT

skills), apprenticeship, technical and skilled craft skills, maths and management skills;

• colleges and training providers not always supplying courses and qualifications demanded by employers and individuals;

• failure of employees to appreciate effect of improved skills on the “bottom line”; • existing skills policies not reaching all in society, with women, ethnic minorities

and agency workers tending to be less well served; and • employers’ and learners’ view that existing provision is fragmented and difficult to

access. Upon the announcement of the Skills Strategy in July 2003, Charles Clarke, the then Secretary of State for Education and Skills, outlined the main skills problems facing the UK:15

[…] work force skills are lower in Britain than in many other countries; there are persistent skills deficits in such important areas as technical and craft skills, maths, and management and leadership; too many adults lack the skills and qualifications needed for sustainable employability; and too many young people are leaving education without the skills that employers need.

The key measures outlined in the Skills Strategy were as follows:

• Free training for adults without first qualifications – an entitlement for adults without a full level 2 qualification to free training to reach this level. A phased

11 DfES, 21st Century Skills, Realising Our Potential, Individuals, Employers, Nation, Cm 5810, July 2003 12 DfES, Skills: Getting on in business, getting on at work, Cm 6483, March 2005 13 For more information on Sector Skills Councils see SN/EP/3164. 14 DfES, Developing a National Skills Strategy and Delivery Plan: underlying evidence 15 HC Deb 9 July 2003 c1161

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introduction began in September 2004 in two Local Learning and Skills Council areas16 with a national roll-out scheduled to begin in 2006/07.

• Targeted support for higher level skills – targeted support will be provided for those developing skills to level 317 in sectors and regions of greatest need.

• Adult learning grant – In September 2003, the Government started piloting a new Adult Learning Grant (ALG), offering up to £30 per week to adults on low incomes studying full time for a first full Level 2 qualification, and for first Level 3 qualifications for those under 30.

• Improved information, advice and guidance on skills, training and qualifications – the White Paper argues that adults who are not already in education, training or work and who cannot afford to pay for advice could be served more effectively. The White Paper goes on to outline ways in which such provisions will be improved.

Library Standard Note SN/EP/2589 provides more detailed information on the Government’s Skills Strategy. 2. 2005 Skills Strategy Update

In March 2005 the Government published an update on its Skills Strategy, Skills: Getting on in business, getting on at work.18 The key proposals outlined in this White Paper were as follows: Skills Academies

The Government envisages that Skills Academies will be a key driver in improving vocational education at a national, regional and local level. They will provide training programmes for young people and adults aimed at meeting potential employers current and future skills needs; as such they will be employer-led. Initially there will be a network of 12 academies from 2007/08, with a view to establishing over time at least one for each major sector of the economy. National Employer Training Programme (NETP)

From 2006/07 the existing Employer Training Pilots (ETPs) will be extended nationally.19 The NETP will fully fund training for all employees up to their first full level 2 qualification.20 Employers must offer some paid time off work for participating employees to complete their training. The White Paper sets out an additional £20 million per year in 2006/07 and 2007/08 to trial an extension of the programme to cover Level 321 training in the technician, advanced craft, skilled trade and associate professional areas.

16 North East and South East. 17 Level 3 is equivalent to two A levels or NVQ Level 3. 18 DfES, Skills: Getting on in business, getting on at work, Cm 6483, March 2005 19 For more information on the existing ETPs programme and the NETP see SN/EP/3162 20 A level 2 qualification refers to any qualification equivalent in standard and breadth to 5 GCSEs at A*-C

or a National Vocational Qualification at level 2. 21 Equivalent in standard and breadth to two A level passes.

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Sector Skills Agreements (SSAs)

SSAs will be drawn up by each SSC. They will be the main mechanism by which SSCs set out how they and employers in the sector plan to address sectoral skills needs. The first four SSAs were launched alongside the White Paper.22 Union Academy

As announced in the Budget 2005, the TUC plan to launch a Union Academy which will increase the capacity of unions to help members recognise the value of learning and training opportunities and drive a step change in the level of learning and development delivered through unions. The White Paper allocated £1.5 million for 2006/07 and £3 million for 2007/08 to support the TUC as it develops plans for the Union Academy.23 Free training to NVQ Level 2

The Government is currently trialing an entitlement to free training for all individuals to achieve their first full Level 2 qualification through LLSCs in the North East and South East regions. The White Paper committed to extending this entitlement to all parts of England from 2006/07. This provides an additional route to the NETP towards gaining level 2 qualifications for those not in employment, or not wishing to train whilst working. The LSC will introduce from September 2005 in all regions the arrangements which will be needed so that local colleges and training providers can offer the entitlement from 2006/07. Adult Learning Grant

The White Paper set out plans to continue the extension of the Adult Learning Grant, which is currently being trialled in 19 LLSC areas. The grant provides up to £30 per week for full-time learners studying for a first full level 2 qualification, and for those aged 19–30 up to a first full level 3 qualification. Foundation Degrees

Foundation Degrees are vocational higher education qualifications. They provide students with the specialist technical knowledge and skills needed by employers at the associate professional and higher technician level. They are designed and developed directly with employers, and can be studied for either in the workplace, or at universities, further and higher education colleges. Foundation degrees were expanded in 2004/05 with an additional 11,500 places made available in subjects areas designed with employers to meet higher level skills gaps.

22 For more information on the existing SSAs see: http://www.ssda.org.uk/ssda/default.aspx?page=813 23 For more information see: TUC, A Union Academy: Adding Value to the Union Card, December 2004

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The New Deal for Skills

The 2004 Budget outlined a New Deal for Skills that aimed to introduces greater flexibility into the New Deal options, providing a service tailored to the needs of the individual, local areas and local employers.24 The implementation has been ongoing since this announcement. Notably, the White Paper announced that, from April 2005 as part of the New Deal for Skills, a new Skills Coaching service will be trialled alongside the introduction of Skills passports. Additionally, from 2006 a new Learning Option as part of the range of welfare programmes offered will be available to those without work. The Option will give individuals £10 a week on top of benefits for those who choose to take up their entitlements to free tuition. Further Education sector reform

As announced in the 2005 Budget, £1.5 billion has been allocated to reform the Further Education sector over the next five years. It is envisaged that this investment will develop the capacity of colleges and other training providers to deliver benefits for both employers and learners in terms of the range of skills acquired. New Vocational Qualifications framework

A new Framework for Achievement is currently being developed by the QCA which proposes the introduction of a credit-based approach to qualifications, allowing learners and their employers to build up achievement over time, through combinations of units, progressing as far as they wish to go from basic skills through to higher education. The framework applies a consistent and continuous approach from the 14-19 phase of learning onwards. The QCA has recently completed a public consultation on the proposals in England. Full details are set out in the 14-19 Education and Skills White Paper.25 Regional Skills Partnerships (RSPs)

The White Paper outlined plans to extend the network of RSPs26 that were first initiated by the 2003 Skills Strategy. Two new RSPs will begin operation in April 2005 in London and the East of England, in addition to the seven RSPs that already exist. Also, among other issues27, the Government plans to invite RSPs to assess how best to use existing public funding to meet Level 3 priorities in colleges and training providers and in the workplace. These assessments will take account of both regional and sectoral needs.

24 For more information on the New Deal for Skills see Volume I, Part I, Section C of this Research Paper

(RP 05/61). 25 DfES, 14-19 Education and Skills, February 2005, pp52-53 26 RSPs bring together the Regional Development Agencies, LLSCs, Jobcentre Plus, the Small Business

Service and the Skills for Business Network, with other regional partners. Their remit is to agree how the delivery of adult skills, workforce development, business support and labour market services can be made mutually reinforcing in providing the best support for Regional Economic Strategies. As such they are central to delivering some key objectives from both the 2003 and current Skills Strategy white papers.

27 See Part 2 p68 of the White Paper for a full list of issues the Government has asked RSPs to address.

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Library Standard Note SN/EP/3443 provides more detailed information on the Government’s Skills Strategy. 3. Further reading

1. DfES, Skills: Getting on in business, getting on at work, Cm 6483, March 2005 2. LSC, Skills in England 2004 Volume 1: Key Messages, March 2005

3. DfES, 14-19 Education and Skills, Cm 6476, February 2005

4. HM Treasury, Skills in the Global Economy, December 2004

5. DfES, 21st Century Skills, Realising Our Potential, Individuals, Employers,

Nation, Cm 5810, July 2003

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C. The New Deal for Skills and “Building on the New Deal”

1. Background

a. The National Skills Strategy

The New Deal for Skills and reforms to the New Deal for Work programmes stem from the publication of the 2003 Skills Strategy White Paper28 and its recommendations. The Skills Strategy acknowledged the need to support and encourage individuals to start learning, and then continue to improve their skills. It also recognised the important role that Jobcentre Plus and the local Learning and Skills Councils (LSCs) should play in partnership working arrangements at local, regional and national levels. It notes that each organisation has an important role in setting the labour market infrastructure. The White Paper concluded that there are clear synergies as well as benefits for users in these organisations working effectively together. Integration should be focused on simplifying the system for employers and learners, improving value for money and responding to local and regional skills needs. b. The National Employment Panel Report

Following the publication of the 2003 Skills Strategy, the National Employment Panel29 (NEP) was asked to undertake a review of skills in the labour market. The NEP’s task was to make recommendations on how to strengthen the links between placing people in jobs and supporting Job Seekers Allowance (JSA) claimants in gaining skills for sustainable employment. The subsequent report30 detailed how Jobcentre Plus and its key partners31 should operate at a national, regional and local level in order to achieve this objective. c. The New Deal for Skills

In order to tackle long standing barriers between welfare and workforce development, and the problem of high numbers of people with no or low skills,32 the Government has committed to a package of measures that will give adults in the labour force a free entitlement to training. The New Deal for Skills is a key driver in the implementation of the Skills Strategy, and will also implement recommendations made in the NEP report. The New Deal for Skills was formally announced by the Chancellor in the 2004 Budget:

We will now constitute, alongside the New Deal for jobs, the New Deal for skills – offering, in job centres, for the employed as well as unemployed, a one-stop skills service with access to personal skills advisers and training. In line with our policy of rights matched by responsibilities, not only will jobseekers be required to undergo a skills check but new incentives will be piloted to encourage lone

28 DfES, 21st Century Skills, Cm 5810, July 2003 29 The NEP is an employer led body which provides independent advice to Ministers on the design, delivery

and performance of the UK Government’s labour market policies and programmes. 30 NEP, Welfare to Workforce Development, February 2004 31 Examples include LSC, Employers, Local Authorities, and Government Department. 32 As highlighted in the National Skills Strategy.

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parents, incapacity benefit claimants and partners of the unemployed also to gain new skills.33

The New Deal for Skills aims to help individuals develop the skills they need to be employable and assist employers in developing the skilled workforce needed to be successful. It assists those in work to move from low to high skilled employment, and gives those out of work improved access to the skills advice and training they need to find sustainable employment.34 Notably it will guarantee every adult the opportunity to gain level 2 skills.35 The New Deal for Skills is being developed jointly by the Treasury, the Department for Education and Skills (DfES) and the Department for Work and Pensions (DWP). d. New Deal for Work reforms: “Building on the New Deal”

The New Deal for Skills programme, as outlined above, adds to the Government’s Welfare to Work policy package that includes the existing New Deal for Work and its various options.36 On 17 June 2004 the DWP produced a paper, Building on New Deal: Local solutions meeting individual needs,37 which provided details of the Government’s strategy to develop and build upon their existing New Deal employment programmes. The paper outlines a new strategy which introduces greater flexibility into the New Deal options, providing a service tailored to the needs of the individual, local areas and local employers. 2. Features of the New Deal for Skills

The Government has outlined a range of measures to ensure that appropriate training is accessible for every individual and employer requiring additional skills. This section summarises the plans set out in the Budget 2004. a. New Deal for Skills aims

The Government, through the New Deal for Skills, envisages that:

• Individuals will be offered the opportunity to understand the benefits they could receive from further training. These individuals will be made aware of how that training can be obtained and what support they can expect from the Government or their employer.

• All individuals with low skills will have access to a local skills advice point, through which they can access free information and advice.

33 HC Deb 17 March 2004 c334 34 This is a key distinction from the existing New Deal for Work programmes which assist individuals who

are unemployed only. 35 Level 2 refers to any qualification equivalent in standard and breadth to 5 GCSEs at A* to C or a National

Vocational Qualification at level 2. 36 See Volume I, Part II of this Research Paper (RP 05/61). 37 DWP, Building on New Deal: Local solutions meeting individual needs, June 2004

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• Free high-quality and flexible training leading to a first full level 2 qualification for all those in work will be provided. This training will be focused on the skills the individual needs for employment.

• Improved access to high-quality advice and training for the unemployed. • All employers will receive better advice and more flexible support to meet the

skills needs of their business and the training needs of their workforce. This will include free and flexibly-delivered training for their low-skilled workers.38

b. Measures to achieve aims

The New Deal for Skills plans to build on the New Deal for Work and the policies already in place.39 It will also build on the policies planned under the Skills Strategy. Further measures the New Deal for Skills introduces to achieve its aims include:

• Measures and pilots to improve the incentives and help available to those out of work to gain new skills, move into work and then get on at work. Notably the minimum number of steps that JSA claimants are required to take to search for jobs will increase, as will the number of interventions in the first six months. Furthermore from June 2005, the Government will pilot in ten areas a mandatory short intensive work-focused course for all JSA claimants, aged 25 or over. This will be for all JSA claimants at the six-month stage, and will be followed by three mandatory personal adviser interviews.

• Improved co-operation between Jobcentre Plus offices and Information Advice and Guidance (IAG) partnerships40 to offer a more integrated skills service in Jobcentre Plus offices. Skills counselling will be available in jobcentres focusing training needs on qualifications that best support the individual’s employability.

• A further extension of Employer Training Pilots (ETPs) to cover over one third of England.41

• The development of a ‘skills passport’ to help individuals make the move from unemployment and benefits into sustainable work. The passport would enable participants to build a record of training, skills and competences gained. This would be structured according to employers’ needs for skills.42

To facilitate these measures, the Government’s skills and employment services are in the process of being restructured to become increasingly “consumer driven”. It is envisaged that the role of Sector Skills Councils43 will become progressively more important in providing individual employers with the opportunity to express their needs.

38 HM Treasury, Budget 2004, March 2004, HC 301 2003/04, Chapter 3, pp66-69 39 The New Deal website is a good information point for general information on the New Deal schemes

already in place, http://www.newdeal.gov.uk/ 40 IAG Partnerships help adults to access local information and support for learning, training and

employment. Supported by the LSC and the DfES, IAG Partnerships offer an impartial and confidential service to those wanting to find a job, develop an existing career, make a career move or explore new learning opportunities. Each partnership delivers information and advice through a network of local organisations that have been accredited by the Guidance Council and include universities, colleges, adult education services, career and employment services, voluntary and community-based organisations, libraries and private companies who provide training and advice services. For further information see http://www.myiag.org.uk/

41 For more information see: Library Standard Note SN/EP/3162. 42 HM Treasury, Budget 2004, March 2004, HC 301 2003/04, Chapter 3, pp66-69 43 Sector Skills Councils are employer-led industry or business sector-based bodies. They have the task to

define the skills and productivity priorities confronting their sectors and develop strategies to deal with

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c. Implementation and cost

There is currently no formal timetable for the implementation of the New Deal for Skills. As a key element of the Skill Strategy it is envisaged that its development will be immediate and ongoing. Information on expenditure planned for the implementation and running of the New Deal for Skills is currently not available. d. Reaction to the New Deal for Skills

The announcement of a New Deal for Skills has been broadly welcomed by the skills and education sector, and the press. The Trades Union Congress General Secretary, Brendan Barber, said:44

The New Deal for skills will rightly make Jobcentres give priority to helping unemployed people learn the skills they need to get long term jobs. It will also give employed people a single point of contact so that they can find out about and sign up for training programmes.

The launch of a New Deal for skills and the extension of the Employer Training Pilots also brings us much closer to a national system that can deliver the Government’s guarantee of an opportunity for every adult to gain a level 2 skills qualification. However, if this is really going to provide the real boost to skills that the economy needs, the Government will need to give eligible employees some form of right to paid time off to train.

The National Institute for Adult Continuing Education (NIACE) acknowledged the positive steps taken to advance adult learning through the New Deal for Skills, but had reservations regarding the Governments skills reforms in general. Alan Tuckett, Director of NIACE, said:45

We welcome the announcement of a New Deal for Skills, an enhanced role for information, advice and guidance integrated with Jobcentre Plus and of further work on ‘skills passports' The language of learning must not be reduced to consideration of schools, skills and scholars. Lifelong learning pays in different ways – more engaged and healthier citizens, more confident parents, more tolerant communities and a range of more vibrant and diverse cultural activities.

The Guardian noted that:46

[…] a New Deal for Skills would join up the Welfare to Work and workforce development agendas very nicely, if it could combine the different elements of skills and employment strategy, boosts expenditure and lauds the example of

them accordingly. For more information see Volume I, Part I, Section A of this Research Paper (RP 05/61).

44 TUC press release, Welcome boost for skills, 17 March 2004 45 NIACE press release, Budget deserves two cheers from adult learners, 17 March 2004 46 “A revolution, not a revolving door”, The Guardian, 5 January 2004

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those employers already doing the heavy lifting at the bottom of the labour market. Yet on closer examination the pre-budget report lacks detail on what the New Deal for Skills might actually look like.

e. The situation in Scotland and Wales

The New Deal for Skills will support the Government’s Skills Strategy, and implement recommendations from the NEP report, in England only. Training is a devolved matter, and therefore in Scotland and Wales arrangements for administration of, and funding for, training differ from those in England. The respective administrations in Scotland and Wales have full responsibility for training policy, funding and delivery. The Government does acknowledge that:47

There is a need to ensure a fit with the funding streams delivered for New Deal through Jobcentre Plus and with the training policies of the devolved administrations … The [DWP] will need to work with colleagues in Scotland and Wales and their partner organizations to establish the implications for each devolved administration, and to plan for implementation in order to achieve our policy objectives.

Scotland

In Scotland, employment programmes are delivered by the DWP and Jobcentre Plus in conjunction with the Scottish Executive, partner organisations and agencies. Scottish Enterprise (SEnt) and Highlands and Islands Enterprise (HIE) are the main delivery organisations for economic development, and the Scottish Executives training and employability policies. The priority areas in which Scotland aims to develop in order to achieve economic success in the medium to long term are outlined in the Scottish Executive’s enterprise strategy for SEnt and HIE.48 This includes the specific strategy theme of Skills and Learning. Scottish Ministers are currently looking at areas where this strategy can be updated and developed, with a new publication scheduled for release in the autumn of 2004. There are a range of training programmes and strategies specific to Scotland. Training for Work is the Scottish training programme for unemployed adults, and complements the UK Welfare to Work provision.49 The New Futures Fund, established in 1998, addresses the gaps in provision for those with multiple barriers facing serious disadvantage in the labour market.50 The adult Literacy and Numeracy strategy in Scotland aims to improve basic skills levels by offering free tuition to all.51

47 DWP, Building on New Deal: Local solutions meeting individual needs, June 2004, p33 48 Scottish Executive, A Smart, Successful Scotland: Ambitions for the Enterprise Networks, 2001 49 Training for Work website: http://www.scottish-enterprise.com/sedotcom_home/stp/careersadvice/develop-your-skills-work-based-

training-2/trainingforwork.htm 50 New Futures Fund Website: http://www.scottish-enterprise.com/newfuturesfund 51 Scottish Executive, Adult Literacy and Numeracy in Scotland, July 2001

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In February 2003 the Lifelong Learning Strategy for Scotland was published.52 This sets out the Scottish Executive’s five-year strategy for lifelong learning and aims to tackle opportunity, skills and productivity gaps in Scotland. In addition there is a Concordat between the Scottish Executive and the DWP which establishes an agreed framework of cooperation. Wales

In Wales, Jobcentre Plus will be working closely with the Welsh Assembly Government and its key sponsored bodies53 to ensure shared economic and social objectives are met. The Welsh Assembly Government’s key strategic document, The Skills and Employment Action Plan for Wales 2002,54 sets the framework for implementing more joined up policies across the skills agenda as a way of levering up skills levels in the workforce and helping more people into work. Wales: A Better Country,55 sets out the overall strategy for change and identifies four key priority outcomes, one of which is to help more people into work. As a result, the Welsh Assembly Government and Jobcentre Plus Wales have agreed a Working Level Agreement which sets out the basis for a closer partnership. The Welsh Employment Advisory Panel has also been set up to support this partnership. It will provide independent advice to the Welsh Assembly Government on the development and delivery in Wales of New Deal and other Welfare to Work programmes.56 3. Building on the New Deal for Work

The following summarises the key point of the Government’s new strategy regarding New Deal programmes, in addition to the introduction of the New Deal for Skills. a. Changes to the delivery of employment programme provision

The Government’s proposals for the development of the New Deal are founded on movement towards greater local flexibility and less central prescription, while recognising the need to retain central control over certain core elements. The new strategy aims to give more flexibility to Jobcentre Plus customers and staff to create a New Deal unique to suit individuals’ needs. The strategy brings all New Deal support under a single programme, removing different rules for different individuals. In announcing the new plans for the New Deal, Minister for Work, Jane Kennedy, stated:

This will create a New Deal unique to each individual through an exciting ‘pick and mix’ approach, which builds on success to date, giving more flexibility to customers and staff … we are removing the barriers between the New Deals so people can get the help they need as individuals rather than according to the

52 Scottish Executive, The Lifelong Learning Strategy for Scotland, February 2003 53 The National Council for Education and Training for Wales, and Careers Wales. 54 Welsh Assembly Government, The Skills and Employment Action Plan for Wales 2002, February 2002 55 Welsh Assembly Government, Wales: A Better Country, September 2003 56 DWP, Building on New Deal: Local solutions meeting individual needs, June 2004, pp33-34

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benefit they are claiming. Increased flexibility will enable local Jobcentre Plus Managers to ensure our employment programmes provide skills to meet the needs of local employers. And by simplifying our systems we will reduce bureaucracy so that our staff can spend more time helping people and less on administration.57

In particular the proposals will provide:

• Greater power to local Jobcentre Plus job advisers. This will provide them with the flexibility to adapt a wider range of training and support to each individual’s personal needs

• More power and new local budgets controlled by local Jobcentre Plus managers.

Consequently relevant training and support can be purchased to tackle local problems and meet individual needs.

• Specialist programmes to help people with specific problems such as former drug

addicts, alcoholics or homeless people. Expert job advisers will tailor support to the individual’s needs.

b. Implementation and cost

Before national implementation prototype districts will be set up to allow for the new approaches, as outlined above, to be tested. Additionally the prototypes will be designed to test how varying degrees of local flexibility would be applied in practice. The DWP had planned for prototypes in 11 Jobcentre Plus districts to begin in October 2005.58 However, a letter published on the Jobcentre Plus website on 23 September 2005, from the Director of Provision and Partnership, announced that:

As a result of our extremely tight financial settlement the department [DWP] has had to look critically at our employment programmes and pilots. We have taken the decision to limit the piloting of BoND to 7 areas. BoND will now be piloted, from October 2006 … a decision on whether or not to roll BoND out nationally will be made following evaluation of the pilots.

The prototypes will now operate in the following Jobcentre Plus districts: Ayrshire, Dumfries, Galloway and Inverclyde; Buckinghamshire and Oxfordshire; Cardiff and Vale; Cheshire and Warrington; Cornwall; Northamptonshire; North East London. Information on the cost of implementing the reforms to the New Deal for Work programmes is not currently available. A key feature of the reforms will be the introduction of devolved flexible budgets for local Jobcentre Plus advisers.

57 DWP Press Release, 17 June 2004, http://www.dwp.gov.uk/mediacentre/pressreleases/2004/june/emp170604-ndev.asp 58 HC Deb 17 November 2004 c98WS

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4. Further reading

1. New Deal website: http://www.newdeal.gov.uk/ 2. DfES, Skills: Getting on in business, getting on at work, Cm 6483, March 2005 3. DWP, Building on New Deal: Local solutions meeting individual needs, June

2004

4. HM Treasury, Budget 2004, Chapter 3: Meeting the Productivity Challenge, March 2004, HC 301 2003/04, pp66-69

5. National Employment Panel, Welfare to Workforce Development, February 2004

6. DfES Skills Strategy: DfES, 21st Century skills, Cm 5810, July 2003

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D. Funding Welfare to Work

Welfare to Work was initially financed by the windfall tax on the privatised utilities which raised £5.2 billion. This source of finance has now been exhausted, and Welfare to Work programmes have since been supplemented by additional resources. Most of the Welfare to Work programmes are now delivered through the DWP. Details of funding are provided in the DWP annual departmental report:59

Welfare to Work expenditure£ million

New Deals

Action Teams Total

1997/98 43 0 431998/99 314 0 3141999/00 536 0 5362000/01 596 11 6072001/02 672 37 7092002/03 734 53 7872003/04 655 43 6982004/05 623 35 6582005/06(a) 542 40 5822006/07(a) 468 40 5082007/08(a) 465 40 505

Total 1997-08 5,648 299 5,947of which Windfall Tax (b) 2,785 150 2,935

Notes: All figures rounded to nearest £ million. (a) Planned expenditure(b) Windfall tax part financed the New Deals and Action Teams to 2003/04.

Sources: DWP, Departmental Report 2005 A recent article in The Guardian highlighted cuts to the delivery budget for New Deal programmes in 2005/06 across the UK:60

JobcentrePlus, the agency responsible for getting unemployed people into work, overspent its £950m training budget last year by £108m and the Treasury told David Blunkett's Department for Work and Pensions that it must claw back the overspend from this year's budget. A second review of spending in the summer found that several JobcentrePlus regions were favoured under the budget settlement and must give up some of their budget in favour of other regions until the 2006/07 financial year.

DWP officials called in the major New Deal training providers two weeks ago to inform them of the second wave of cuts. It is understood the minister for work,

59 Expenditure on individual New Deals is not provided in the 2005 Departmental Report due to the removal

of ring-fencing from the New Deals. Consequently, expenditure figures provided in this paper for individual New Deals are extracted from the DWP’s 2004 Departmental Report. These figures include estimates for the financial years 2003/04 to 2005/06.

60 “Treasury squeeze shuts down jobseeker schemes”, The Guardian, 27 September 2005

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Margaret Hodge, demanded a review of job creation schemes after she was informed of the cuts and has received reports from officials in the last few days outlining the crisis.

Furthermore, a statement to training providers posted on the Jobcentre Plus website stated:61

It is evident that with fewer people unemployed and a greater emphasis on providing support to disabled people and those most distanced from work we need to be certain that the provision we buy focuses support on those who most need our help. In view of this we have decided to further extend existing contracts and award new contracts to start next year from April.

The change in our strategy also takes full account of our commitment to achieve year on year savings as part of the Government’s Efficiency Challenge. As you will know, the Chancellor announced in Spring 2004 substantial reductions within DWP [see Part E of this Section]. This includes reductions to our current budgetary allocation and this reduction will continue year on year.

This will impact on the resources we have available for services provided by contractors. We want to work with you for continuing improvements and value for money from the resources that are available … There is only a finite amount of money available to buy provision for Jobcentreplus customers … This means that in some circumstances difficult decisions will have to be taken and unfortunately not all of our customers will be able to access the provision that they want. We will be reviewing individual lines of provision under contracts and identifying under performing or under used services that we would not wish to extend.

61 See:

http://www.jobcentreplus.gov.uk/cms.asp?Page=/Home/Partners/NoticetoPartnerOrganisations/2971

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E. DWP targets and the 2004 Spending Review

One of the DWP’s key performance targets relates to employment and unemployment:62

Objective II: Promote work as the best form of welfare for people of working age, while protecting the position of those in greatest need. 4. As part of the wider objective of full employment in every region, over the three years to Spring 2008, and taking account of the economic cycle:

• demonstrate progress on increasing the employment rate, joint with HM Treasury;

• increase the employment rates of disadvantaged groups (lone parents,

ethnic minorities, people aged 50 and over, those with the lowest qualifications and those living in the local authority wards with the poorest initial labour market position); and

• significantly reduce the difference between the employment rates of the

disadvantaged groups and the overall rate. 5. By 2008, improve health and safety outcomes in Great Britain through progressive improvement in the control of risks in the workplace.

In addition, the 2004 Spending Review outlined the DWP’s aim to develop:63

[…] more effective support for people facing the greatest barriers to work, including through a comprehensive and rigorous evaluation of the Pathways to Work pilots and through:

• the rigorous testing of new approaches to supporting those further from the labour market, such as in-work credits and worksearch premiums, and measures to help people to enter, remain and progress in work including the Employment Retention and Advancement Demonstration project and the New Deal for skills; and

• steps to address the remaining structural and institutional factors that can

act as barriers to labour market participation, including through reforms to Housing Benefit that will provide more consistency and continuity for people as they move into work.

The 2004 Spending Review also imposed upon the DWP a Departmental Expenditure Limit which amounted to a real fall of 2.8% a year on average for the years 2004/05 to 2007/08. For more information on the 2004 Spending Review please see Library Standard Note SN/EP/3131.

62 DWP PSA targets 2004: http://www.hm-treasury.gov.uk/media//6A890/sr04_psa_ch15.pdf 63 HM Treasury, 2004 Spending Review, July 2004, Chapter 19

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II The New Deal programmes The New Deal programmes were gradually introduced after the 1997 General Election by the new Labour Government. They are a key element of the Government’s Welfare to Work strategy. This part of the paper provides separate summaries of all the New Deal programmes which are each targeted at distinct groups. As stated previously, this paper has been written as a reference work whereby all sections can be read independently of each other. Consequently there is a degree of repetition between the summaries of each individual New Deal programme. A. New Deal for Young People

The New Deal for Young People (NDYP) is a mandatory employment programme for all young people aged 18-24 who have been claiming Jobseeker’s Allowance (JSA) for six months or more. After an intensive period of careers advice and help with job search techniques known as the Gateway period, NDYP participants enter one of four programme options: a subsidised job; a place on the Environment Task Force; a place with a voluntary sector employer; or full-time education or training. Participants who refuse to participate in any of these options may face benefit sanctions. 1. Background

The programme was foreshadowed in Labour Party policy documents before the 1997 General Election. One of the “five election pledges” highlighted in Labour's election manifesto was to “get 250,000 under-25 year-olds off benefit and into work by using money from a windfall levy on the privatised utilities”.64 The formal announcement came in Gordon Brown's first Budget on 2 July 1997:65

In the new economy, in which capital, inventions and even raw materials are mobile, Britain has only one truly national resource: the talent and potential of its people. Yet in Britain today, one in five of working-age households have no one earning a wage. In place of welfare, there should be work. So today this Budget is taking the first steps to create the new welfare state for the 2lst century.

[…]

Starting from next year, every young person aged 18 to 25 who is unemployed for more than six months will be offered a first step on the employment ladder. Tomorrow, my right hon. Friend the Secretary of State for Education and Employment will detail the four options, all involving training leading to qualifications - a job with an employer; work with a voluntary organisation; work on the environmental task force; and, for those without basic qualifications, the chance of full-time education or training.

With those new opportunities for young people come new responsibilities. There will be no fifth option--to stay at home on full benefit. So when they sign on for

64 New Labour: because Britain deserves better, Labour Party manifesto for the 1997 General Election,

p19 65 HC Deb 2 July 1997 cc308-309

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benefit, they will be signing up for work. Benefits will be cut if young people refuse to take up the opportunities. This new deal for the young is comprehensive, rich in opportunity, linked to the development of skills and has already attracted the support of some of Britain's leading companies.

I urge every business to play its part in this national crusade to equip this country for the future by taking on young unemployed men and women. I appeal to every voluntary organisation to make a further contribution to the work that they do in the community by taking on a young person. I will make it possible for every Member of the House to act as an ambassador for this venture, encouraging young people in their constituencies, consulting local businesses and bringing them together to play their part in this new deal for young people.

The NDYP was introduced initially in 12 “pathfinder areas” on 5 January 1998, and then nationally on 6 April 1998.66 2. Eligibility

The programme is open to all young people aged 18-24 who have been claiming Jobseeker’s Allowance (JSA) for six months or more. Certain groups can enter before six months if they wish. These are:67

• People who have completed a custodial sentence • People with immigration status • homeless people (including rough sleepers) • People affected by drug addiction (including alcoholism) • People who have been in residential care • Ex HM Armed Forces • People with language, literacy or numeracy problems (if they do not enter WBLA) • Lone parents, people with disabilities and carers on JSA (instead of other

benefits) 3. Delivery

Private sector organisations initially led the delivery of the New Deal in ten locations. These were extended to 12 areas from November 2002. The successful bidders were: Bridgend and Glamorgan Valleys (Manpower plc); Exeter and East Devon (Action for Employment); Forth Valley (Triage); Hackney and City (Working Links); Hammersmith and Fulham (Work Directions); Leicestershire (Fern Training and Development); North Essex (Seetec); Solihull (Pertemps); South Humber (Fern Training and Development); Tyneside North (Working Links); West Lancashire (Training West Lancs); and Westminster, Kensington and Chelsea (Work Directions).68 These private sector

66 The pathfinder areas were the Black Country; Cornwall; Cumbria; Eastbourne; Lambeth; Newcastle;

Sheffield and Rotherham; South Derbyshire; Stevenage; Tayside; West Wales and Swansea; and Wirral. 67 ONS, New Deal For Young People and Long-Term Unemployed People Aged 25+: Background

Information, http://www.dwp.gov.uk/asd/asd1/new_deal/NDYP_ND25plus_Background_Information.pdf 68 DWP Press Release, Successful bidders announced to lead New Deal delivery to help long-term

unemployed, 13 August 2002

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contracts currently run until March 2006. In all other areas, the local Jobcentre Plus leads. a. The Gateway period

The programme begins with an intensive four-month period of advice, counselling and guidance – the “Gateway” to the New Deal. At this stage each New Deal participant is allocated a New Deal Personal Adviser who will remain the claimant’s main contact throughout his or her time on the programme. During this period, participants continue to claim JSA. The Gateway must provide a range of provision to ensure it can meet the needs of each individual. Typically, provision in the Gateway might feature:69

• Job search advice and supported job search help – this includes the identification of job goals, placing people into unsubsidised jobs and the provision of specific courses and programmes to assist job search;

• Independent careers guidance – the provision of an impartial and confidential careers guidance service; the diagnosis of learning and training needs; motivation and confidence building; and action planning and job search help;

• Training – this includes short refresher courses to help people with basic and key skill needs and courses or programmes to help with attitude, motivation and confidence building;

• Specialist assistance for the disadvantaged and harder to help – this includes separately contracted specialist help and programmes for people with disabilities, those from ethnic minorities and inner city and rural areas. It also includes help for people with problems related to criminality, homelessness, debt and drug, alcohol and substance abuse;

• Self Employment – this includes help for people interested in self employment including short awareness seminars, provision of advice and information and help in planning for and setting up a business.

Individuals participating on the Gateway may also be required to undertake an eight week period of Short Intensive Basic Skills (SIBS) provision.70 SIBS is targeted at participants who lack the basic literacy and/or numeracy skills needed in order to be able to compete in the labour market with those basic skills. Whilst undertaking SIBS provision, participants move from JSA to a New Deal Allowance payment (equivalent to their JSA) for the duration of the 8-week course. Participants also receive the £15.38 per week top-up payment normally attracted only when undertaking provision during one of the Options.71

69 Jobcentre Plus Provider Guidance, Chapter 11: New Deal for Young People, June 2005, para 4 70 Although undertaken during the Gateway, SIBS provision does not actually form part of the Gateway, i.e.

the full four months of Gateway provision remain available to participants. Effectively a participant’s Gateway ‘clock’ is stopped when they enter SIBS provision and restarted again following completion of the 8-week course or when they leave provision early.

71 The various Options available on NDYP are outlined below in sections 5-8.

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If participants are still unemployed after the Gateway, they will be offered the opportunity to participate in one of four options: the Employment option; the Environment Taskforce; the Voluntary Sector option; or Full-Time Education and Training.72 Once a New Deal participant moves on to one of the Options, their JSA claim is terminated they will usually begin to receive a weekly New Deal Allowance equivalent to JSA payments. Participants will usually also receive a £15.38 per week top-up grant. b. Employment Option

The aim of the Employment Option is to help improve the participant’s chances of finding permanent employment by offering a period of subsidised work with an element of training. This option includes at least one day a week (or its equivalent) in education or training designed to reach an approved qualification. The employer will receive a subsidy of £60 a week for up to 26 weeks for those working at least 30 hours a week. A subsidy of £40 per week for up to 26 weeks is payable for part-time jobs offering between 24 and 39 hours per week. In addition to the subsidy, employers receive up to £750 per person towards the cost of certified vocational training. Participating employers have to sign an “Employer Agreement” in which they agree not to make anyone redundant in order to take on the New Deal employee, to pay the young person at least the amount of the subsidy and preferably the rate for the job, and to aim to retain them in the job once the six month subsidy comes to an end. Those who take up the Employment Option in the New Deal lose their automatic entitlement to passported benefits. As employed people, they are no longer entitled to JSA. They may be able to claim Housing Benefit, and other in-work benefits, on the grounds of low income. The Employment Option includes a specific programme for those interested in moving into self-employment. This was launched on 17 July 1998 as an addition to the original proposals.73 Young people expressing an interest in self-employment during the Gateway are offered initial support and advice from a New Deal Personal Adviser. They then receive a basic awareness-raising session about self-employment run by an appropriate training organisation. They are also offered one-to-one counselling or a short course to provide information about setting up a business. If they are still interested at the end of the Gateway they go on to the self-employment programme. This involves supported training for up to 26 weeks during which time the participant receives an allowance (£400 paid over 26 weeks) and continues with part-time training towards an appropriate qualification. During this period, a business adviser will be identified to offer support to the participant and this can continue for two years after the participant has started trading independently.

72 Detailed information on the Gateway period may be found in Chapter 6 of the Jobcentre Plus Provider

Guidance, paras 90-103 73 DfEE Press Release, Starting your own business with the New Deal, 17 July 1998

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c. Environment Task Force Option

The Environment Task Force (ETF) option aims to enhance long-term employment prospects by providing a high quality work placement and, where appropriate, short 1 day training that is vocationally focused (e.g. a 1-day hygiene certificate for those looking for a career in catering) and help with job search. The work placement in ETF is delivered by an ETF provider and can last for up to six months; it must be of clear benefit to the participant in enhancing their employability. Projects have included dealing with housing, forest and park management, and reclamation of derelict or waste land. They may also be designed to help meet the Government’s targets for heat conservation and efficiency.74 Participants receive the New Deal Allowance and grant (as outlined in section a above), and remain entitled to passported benefits. Help with travel costs is also available above £4 a week. d. Voluntary Sector Option

The principles and workings of the Voluntary Sector option (VS) are analogous to the ETF option as outlined above. Participants are provided with a job for six months with a voluntary sector employer, again including day release education or training towards an approved qualification. Participants receive the New Deal Allowance and grant, and remain entitled to passported benefits. Help with travel costs is available above £4 a week. e. Full-Time Education and Training Option

This option is designed “primarily to provide help for those without NVQ/SVQ level 2 or an equivalent level qualification,[75] especially people who lack the qualities, attitudes and basic skills for employment”.76 Participants in this option are guaranteed access to up to 52 weeks of full-time education and training on a course leading to an approved qualification; support for basic skills leading to the achievement of an approved qualification; or a combination of these. The approved qualifications are listed in Schedule 2 to the Further and Higher Education Act 1992 (chapter 13) and section 6 of the Further and Higher Education (Scotland) Act 1992 (chapter 37). As with the other options, participants receive the New Deal Allowance and grant, and remain entitled to passported benefits. Help with travel costs is available above £4 a week. f. Follow-through

If a participant completes or leaves an option and has not found a job, they will enter the Follow-through period. The aim of Follow-through is to help participants move as quickly as possible into jobs by making the most of the help they have received on NDYP, thus maximising their chances of it leading to employment. The assistance will usually take the form of intensive help with jobsearch plus advice and guidance needed to improve

74 HM Treasury, Budget 1997, July 1997, HC 85, p 31 75 A level 2 qualification refers to any qualification equivalent in standard and breadth to 5 GCSEs at A*-C

or a National Vocational Qualification at level 2. 76 DfEE, Design of the New Deal for 18-24 year olds, October 1997, p 20

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job prospects. Assistance will typically be offered on the basis that participants are free to take it up or decide not to. The Follow-through period may last up to four months. Once a New Deal participant leaves an option, unless he/she has found a job, they may claim JSA again. If he/she claims JSA for a further 26 weeks they will re-enter the New Deal at the Gateway stage. g. Sanctions

Young people who fail to comply with their obligations under the scheme may face benefit sanctions. While on the Gateway, claimants continue to claim JSA and must comply with the normal labour market requirements such as being available for and actively seeking work. Regulations designate options within the NDYP as Government programmes under section 19 of the Jobseeker’s Act 1995.77 This means that, in addition to the normal JSA requirements, participants may be sanctioned if they: • lose a place on a New Deal option through misconduct; or • without good cause, fail to apply for or accept a place on a New Deal option that has

been notified to them; or • without good cause fail to attend a place on a New Deal option; or • without good cause give up a place on a New Deal option. Those sanctioned lose 100% of their entitlement to the JSA personal allowance for two weeks. If the same claimant is sanctioned for a second time within one year, the sanction is increased to four weeks. Unlike participants in other Government programmes under section 19 of the 1995 Act, participants on the NDYP can be sanctioned for 26 weeks if a sanction is applied for a third time in the same year. Regulations introducing this extra sanction took effect from 6 March 2000.78 The Government argues that there is a small number of young people who are “playing the system” by interspersing periods of compliance with periods of non-compliance in order to minimise the effects of the sanctions.79 Although claimants who are sanctioned lose their JSA personal allowance, they do not lose their underlying entitlement to JSA. For those on income-based JSA, it is entitlement, not actual payment, which acts as a passport to Housing Benefit, Council Tax Benefit and other passported benefits such as free prescriptions, so they will continue to receive these benefits. 4. Changes to the NDYP

Since its introduction, a number of changes have been made to the New Deal. On 11 January 2000, the Government announced proposals to help young people on the New Deal who face particular difficulties in finding and keeping work. These include:80 77 Social Security Amendment (New Deal) Regulations, SI 1997/2863 78 Jobseeker’s Allowance (Amendment) Regulations, SI 2000/239 79 The Jobseeker’s Allowance (Amendment) Regulations 2000: report by the Social Security Advisory

Committee, Cm 4549, February 2000 80 DfEE Press Release, Jowell action plan builds on what works in New Deal, 11 January 2000

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• tests and help for the 40% of young people on New Deal who lack basic

literacy and numeracy skills; • compulsory presentation lessons to ensure young jobseekers can

present themselves well to employers; and • job coaches to offer continued support in helping people who have been

long-term unemployed to make the transition back into work. From June 2000, the Government extended nationally an Intensive Gateway approach piloted in 12 “trailblazer” areas since August 1999. These areas were Sheffield; Sunderland; Glasgow; Shropshire; Forth Valley; Dunbartonshire; Liverpool; North Devon; North East Wales; Lincolnshire; Bedfordshire; and Hackney. The Intensive Gateway has been developed, in part, in response to criticism about the length of time some young people have stayed on the Gateway. It includes:81

• a full-time course involving job-search activity and addressing “soft” skills, such as punctuality, team working and communication skills; and

• more intensive personal adviser help with job search before and after the course.

A number of measures have been introduced to make the New Deal more flexible. Notably, New Deal Streamlining, announced in Budget 2003, came into effect on 26 April 2004. The two key elements of these changes aimed at increasing flexibility within the NDYP were as follows:82

• Alignment of early entry criteria for New Deal 25 plus and New Deal for Young People (NDYP) – The criteria for deciding which customers may benefit from early entry to New Deal are the same for both mandatory programmes. Personal Advisers may use their own discretion to determine which customers may benefit from early access.

• A more flexible approach to the length and design of the mandatory

Options stage within NDYP – This applies to the Environment Task Force (ETF) and Voluntary Sector (VS) Options in NDYP. The minimum length of stay on these Options has been reduced from 26 to 13 weeks. Restrictions on movement between Options have been removed and the duration of stay is more flexible. Personal Advisers will consider the needs of the individual and be able to target resources more effectively.

For ETF and VS, the Option period will run, normally, for 13 weeks and can be a mixture of Options. The Full Time Education & Training (FTET) Option can also form part of the mix. Rather than be limited to a ‘balance of time’, the Employment Option can now be used in conjunction with the other Options for a full 26 weeks. For participants within VS, ETF or FTET (where FTET is part of a flexible option package), a job-readiness review will be held at Week 10. At the review, the Personal Adviser will look at the participant’s progress against their Learning and Development Plan (which replaces the Personal Development Plan and Individual

81 HM Treasury, Budget 2000, March 2000, HC 346 1999/00, p64 82 DWP, Touchbase, June 2004

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Training Plan) and consider the next steps. At the review, Personal Advisers will decide whether to extend the length of stay for up to 13 weeks. The decision on whether to extend (under exceptional circumstances), and for what period, will be made by the Personal Adviser – based on information from both the Provider and participant.

In June 2004, the Government outlined plans for further reforms to the New Deal programmes in their publication Building on New Deal: Local solutions meeting individual needs.83 The paper outlines a new strategy which introduces greater flexibility into the New Deal options, providing a service tailored to the needs of the individual, local areas and local employers. Before national implementation 7 prototype districts will be set up from October 2006 to allow for the new flexible approach to be tested.84 5. Statistics and cost

Figures relating to the New Deal for the Young Unemployed and the New Deal 25+ in Great Britain are published by the DWP on a quarterly basis (at the end of February, May, August and November). These are available on the DWP website.85 New Deal Statistics by constituency are available on the Constituency Profile section of the Library’s website. Cumulative figures to the end of March 2005 show:

• there have been 1,292,890 starts to the NDYP, of which 1,220,100 have left the scheme and 72,790 are currently participating;

• 446,490 young people (34.5% of all starts) have moved into sustained employment from participation on NDYP.

DWP expenditure on the NDYP is shown in the table below:

83 DWP, Building on New Deal: Local solutions meeting individual needs, June 2004 84 For more information see Volume I, Part I, Section C of this Research Paper (RP 05/61). 85 http://www.dwp.gov.uk/asd/ndyp.asp

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Expenditure on the NDYP£ million

Administrative Expenditure

Programme Expenditure

Total Expenditure

1997/98 31 12 431998/99 98 162 2601999/00 88 282 3702000/01 119 293 4122001/02 89 219 3082002/03 93 221 3142003/04(a) 93 257 3502004/05(b) 95 235 3302005/06(b) 94 233 327

Notes: All figures rounded to nearest £ million. Following agreement with HM Treasury to remove the ‘ring fences’ from individual New Deals, New Deal administrative expenditure is no longer accounted for separately. Figures for 2002–03 and later years are estimates.(a) Estimated expenditure

(b) Planned expenditure

Source: DWP, Departmental Report, 2004 6. Evaluation

The NDYP has been the subject of a number of evaluations since its introduction in 1998. Evaluations of active labour market programmes attempt to look beyond a simple assessment of the numbers of people who have found work after participating in a programme. A comprehensive evaluation will usually make an assessment of the programme’s “deadweight”. This refers to the number of people who would have moved into work without the help of the programme. Other measures which can indicate the relative success, or otherwise, of a programme are the levels of displacement and substitution. Displacement refers to people who are taken on by an employer on a programme at the expense of other unemployed people. Substitution refers to the extent to which other people in the labour market may lose their jobs as a result of employers taking on unemployed people on Government programmes. The combined effect of displacement and substitution effects can result in high levels of “churning” of employees as people move in and out of Government programmes and subsidised jobs. Assessments of these effects on earlier programmes are discussed in more detail in section III of Library Research Paper 97/118 on the New Deal.86 The National Audit Office (NAO) published a report on the New Deal for Young People in February 2002.87 This found that the Government had achieved its aim of getting 250,000 under 25 year olds off benefit and into work in September 2000. The report went on to note that many of those who found work after going on the New Deal would have found work anyway given the turnover in the labour market and growth in the economy. The NAO estimated that the New Deal had reduced youth unemployment by between 25,000 and 45,000 and increased youth employment by between 8,000 and

86 http://hcl1.hclibrary.parliament.uk/rp97/rp97-118.pdf 87 National Audit Office, New Deal for Young People, Report by the Comptroller and Auditor General, 28

February 2002, HC 639, Session 2001-2002

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20,000. The average annual cost per additional person in employment was estimated as £5,000 to £8,000.88 The NAO also concluded:89

This [positive] effect [on the economy] is likely to be sustainable in the medium to longer term if the programme adapts to changes in the economy and the make-up of client group, and if successful outcomes are generated from the increased resources that are being applied to those who are harder to help.

The NAO made a number of recommendations to allow progress to be quantified more easily and to improve the performance of the programme overall. These included reconsidering extending the length of the Gateway period for certain clients who would benefit from it, continuing to expand the role of subsidised employment and developing more targeted types of help for those participants who have already been through the programme or who have particularly significant barriers to employment.90 The Work and Pensions Select Committee produced a report on the Government’s Employment Strategy in July 2002.91 One of the Report’s recommendations was that: 92

[…] the emphasis of the New Deal should shift from the younger JSA claimant population to older JSA recipients, those facing acute barriers to work, those on other benefits and those who are economically inactive.

The report found that the New Deal’s performance in reducing youth unemployment had been impressive.93 While the report noted the NAO’s view that the majority of 18-24 year olds would have found work anyway it went on to say:94

We are convinced that most will have been placed into more sustained employment than might otherwise occur because the job matching process will have been more exacting while the skills and job-readiness of New Deal job-entrants will have been greater.

The Committee did, however, express concerns about the 40% of those leaving the NDYP who were claiming JSA again within six months. On the basis of sustained job entry as a proportion of those exiting the New Deal, the scheme has a national job entry rate of 40%. The Committee’s report noted that while this was significantly better than any previous scheme, the New Deal should be performing better.

88 This takes into account the estimated increase in employment of 10,000 in groups other than 18-24 year

olds. 89 National Audit Office, New Deal for Young People, Report by the Comptroller and Auditor General, 28

February 2002, HC 639, Session 2001-2002 para 18 90 the Public Accounts Select Committee examined the NAO report and produced a subsequent report on

the NDYP: Public Accounts Committee, The New Deal for Young People, 28 November 2002, HC700 2001/02

91 Work and Pensions Committee, The Government’s Employment Strategy, 31 July 2002, HC815 2001/02 92 ibid. p46 93 ibid. p19 94 ibid. p19

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The Committee also found that the NDYP needed to be made more flexible. It recommended that the Tailored Pathways approach, which was piloted in 17 areas between January/April 2002 and April 2004, should be rolled out nationally. Tailored Pathway offered a more flexible package of help after a period on the Gateway. It enabled personal advisers to put together modular support for NDYP participants specific to the need of the individual; this could include period of training, work experience and subsidised employment.95 The Committee also recommended that the New Deals should be redesigned around the following three principles:96

• Work for those who can enter the job market quickly;

• Soft skills, work placements, job-specific training and active job-search for others; and

• Intensive personal help (“rehabilitation” in the jargon) for those with the most

significant barriers – e.g. drug abuse, ex-offenders. The Committee went on to recommend that Personal Advisers should be given greater flexibility in applying these principles and that the Jobcentre Plus offices should be judged on outcomes rather than as now through centrally set options and programme rules. The DWP has published a report into the effects of the NDYP on employment and unemployment and also its effects on the wider economy.97 This report brought together research undertaken by the Policy Studies Institute (PSI) and previously published work by the National Institute of Economic and Social Research (NIESR). NIESR estimated that NDYP reduced long-term (more than six months) unemployment by 45,000 and that total youth unemployment was reduced by 35,000 in the first two years of the programme. The PSI estimate of the fall in total youth unemployment was 40,000. The impact on the wider economy was also found to be positive. NIESR estimated that national income was £500 million a year higher as a result of NDYP. The NIESR analysis also estimated that the net budgetary cost per job gained through participation in the NDYP was £7,000 per annum, excluding the ETF and VS options, or £4,000 per annum when these two options are included. A study by the Northern Ireland Economic Research Centre,98 found that the New Deal’s positive effect both in encouraging the longer term unemployed to return to education, and in promoting work. However, the primary effect of NDYP has been to shift large numbers of young people out of unemployment and into education and training. The

95 The tailored pathways approach is being mainstreamed across Jobcentre Plus and is an element of

some the reforms outlined in the DWP paper, Building on the New Deal: Local Solutions Meeting Individual Needs.

96 ibid. p29 97 Michael White and Rebecca Riley, Findings from the Macro evaluation of the New Deal for Young

People, DWP Research Report 168, 2002. 98 McVicar, D and Podivinsky, J., Into Jobs or into the Classroom: The UK New Deal for Young People,

Northern Ireland Economic Research Centre, April 2003

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authors concluded that it was not yet clear whether these young people are subsequently more ‘employable’ as a result of the intervention. The authors built on this study by examining whether this is true across all UK regions in a further paper, How well has the New Deal for Young People Worked in the UK?99 The primary conclusions of this study were as follows:

• NDYP has shifted significant numbers of young people out of unemployment into employment and education and training across all UK regions.

• in most regions, the primary effect of NDYP has been to shift young people into education and training rather than into employment. Evidence is as yet unclear as to whether these young people gain in terms of ‘employability’, i.e. whether they are more likely to gain employment following their education and training spell.

• NDYP shifts more young people into employment and less young people into education and training in low unemployment areas than in high unemployment areas.

A further study published in March 2003 stated that the NDYP “… appears to have had a significant effect in moving more young people into jobs. [estimates suggest that] young unemployed men are about 20% more likely to find jobs each month because of the New Deal [and] that the New Deal has lead to an increase in “steady state” youth employment of over 17,000”.100 More recently the same author concluded in a summary of existing NDYP research that:101

[…] the programme … has raised the chances of unemployed people finding a job by between 5% and 7%. This effect appears after four months and seems to persist for at least one year … Expenditure on the New Deal for Young People is forecast at £330 million in 2005/06. But most of this comprises unemployment benefits that would have to be paid even in the absence of the programme. So while the total number of jobs created is far below one million, the true cost is also modest, so it is likely that the program’s benefits have outweighed the costs.

A Conservative Party policy document published prior to the 2005 General Election stated that a Conservative government would abolish all New Deal programmes.102 The Conservatives proposed that the New Deal would be replaced by a system of private-sector led Employment Zones, similar to those currently being piloted in 13 areas across the UK.103 David Willetts, the then Shadow Work and Pensions Secretary, added that research showed “barely a third of all people put through the programme found a job lasting three months or longer … The New Deal is not a route off welfare, it is a revolving door back on to it”.104

99 McVicar, D. and Podivinsky, J., How well has the New Deal for Young People worked in the UK?,

Northern Ireland Economic Research Centre, April 2003 100 Van Reenen, J., Active labour market policies and the British New Deal for unemployed youth in context,

NBER Working Paper 9576, March 2003, p20 101 http://cep.lse.ac.uk/briefings/ea_vanreenen.pdf 102 Conservative Party, Better Public Services, Better Value, Conservative Spending Plans, 2005-2008,

available at: http://www.conservatives.com/tile.do?def=policy.listing.page 103 “Tories set out plan to privatise Jobcentres”, Financial Times, 7 October 2004, p4 104 “Chancellor defends Welfare to Work”, Financial Times, 8 April 2005, p2

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7. Further reading

1. Blundell et al., “Evaluating The Employment Impact Of A Mandatory Job Search Program”, Journal of the European Economic Association 2(4), June 2004, p569-606

2. Bivand et al, “New Deal for Young People”, Chapter 17, pp201-36, Welfare to

Work Handbook, Second Edition, CESI, June 2004 3. Wilkinson, D., New Deal for Young People: evaluation of unemployment flows,

Policy Studies Institute, June 2003 4. McVicar, D. and Podivinsky, J., How well has the New Deal for Young People

worked in the UK?, Northern Ireland Economic Research Centre, April 2003 5. McVicar, D and Podivinsky, J., Into Jobs or into the Classroom: The UK New

Deal for Young People, Northern Ireland Economic Research Centre, April 2003 6. Van Reenen, J., Active labour market policies and the British New Deal for

unemployed youth in context, NBER Working Paper 9576, March 2003 7. National Audit Office, New Deal for Young People, Report by the Comptroller and

Auditor General, 28 February 2002, HC 639 Session 2001-2002 8. Education and Employment Committee, New Deal: An Evaluation, 13 March

2001 HC 58, 2000-01 9. Work and Pensions Committee, The Government’s Employment Strategy, 31 July

2002, HC 815, 2001-02 10. DWP, Report on the Government’s Employment Strategy, Reply by the

Government to the Third Report of the Work and Pensions Select Committee, Session 2001-02 [HC815], October 2002, Cm 5599

11. Committee of Public Accounts, The New Deal for Young People, 9 October 2002,

HC 700, 2001-02 12. Michael White and Rebecca Riley, Findings from the Macro evaluation of the

New Deal for Young People, DWP Research Report No. 168, 2002

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B. New Deal for 25 plus

The New Deal for 25 plus (ND25+), also referred to as the New Deal for the Long-Term Unemployed, forms part of the Government’s Welfare to Work policy. It is a mandatory employment programme for all people aged 25 and over who have been claiming Jobseeker’s Allowance (JSA) for 18 months or more, except those living in an Employment Zone.105 The programme provides a wide variety of individually tailored support, including the services of a New Deal Personal Adviser (NDPA), in the form of training, advice, guidance, and work experience, including access to self employment. ND25+ is delivered in three stages:

• a ‘Gateway’, lasting for up to 4 calendar months providing access to short types of provision;

• an ‘Intensive Activity Period (IAP)’ lasting for, initially 13 weeks but which can be extended up to 26 weeks (and in a small number of cases up to a year) including flexible packages of support which can combine work experience/placements, work focused training and help with motivation and soft skills; and

• a period of ‘follow-through’ support. 1. Background

The programme was proposed in Labour Party policy documents before the 1997 General Election. Labour's manifesto promised to “encourage employers to take on those who have suffered unemployment for more than two years with a £75-a-week tax rebate paid for six months, financed by the windfall levy”. The formal announcement came in the Chancellor Gordon Brown’s first Budget on 2 July 1997 with the programme beginning on 29 July 1998:106

There are 350,000 adults who have been out of work for two years or longer. So the second component of our Welfare to Work programme will offer employers a £75-a-week subsidy to employ long-term unemployed men and women. Many of those unemployed who lack skills are debarred by the 16-hour rule from obtaining them. For this group - the unskilled - the 16-hour rule will now be relaxed, so that when the long-term unemployed sign on for benefit, they will now sign up for work or training.

a. New Deal Pilots

From November 1998, the ND25+ operated differently in 28 pilot areas in Great Britain and one covering Northern Ireland. Participants joined the programme after 12 or 18 months (i.e. more quickly than the national ND25+ operating at the time). The pilots were permitted considerable flexibility as to how they delivered the New Deal and were used to inform the subsequent development of the New Deal. The pilots took their last participants in March 2001.

105 Employment Zones are private sector led employment programmes currently being trialled in 13 different

areas of the UK as an alternative to ND25+ and NDYP. For more information see Volume II, Part I, Section D of this Research Paper (RP 05/62).

106 HC Deb 2 July 1997 c309

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Documentation sent out to potential private sector bidders in May 1998 summarised the basic design of the pilots:

• An initial period of 3 months when the participant receives intensive help in jobsearch, including vocational guidance and, where appropriate, training needs assessment and the opportunity to undertake training. (Where pre-vocational or basic skills training needs are identified, participants will be given access to the training they require through work based training for adults);

• Those who do not find work in this period will progress to a further three month period of activity consisting of an individually-tailored mix of work experience, job-related training, help into self-employment, and jobsearch help;

• During this period participants will be eligible for the Government's New Deal employer subsidy of £75 a week for six months;

• Those who have not managed to get work during this period, or who return to benefit within three months will enter a follow-through period. During this time they will receive further advisory support and vocational guidance to help them into work.

Further information on the pilots is contained on pages 44-48 of the 2000 edition of this Research Paper.107 2. Enhanced version

In the November 1999 Pre-Budget Report, Gordon Brown announced that the Government intended to expand the ND25+ from April 2001:108

4.33 The Government intends to intensify and extend the New Deal for the over 25s on a national basis from April 2001, building on the principles of the New Deal for 18-24s and bringing the rights and responsibilities for those aged 25 and over closer into line with those for young people. This will be funded from the Windfall Tax. This will incorporate the lessons from the evaluation of the innovative New Deal for the over 25s pilots introduced in November 1998. To enable this evaluation work to continue, and to provide as much evidence as possible about what works and what does not, the pilots will be extended to run until April 2001. In some cases the pilots will continue in much the same form as they are currently operating; in others a more radical approach will be taken.

3. Eligibility

Originally, those aged over 25 and claiming JSA for more than two years automatically entered ND25+ when they crossed the two year threshold. 107 Employment and Training Programmes for the Unemployed. Research Paper 00/81. 108 HM Treasury, Pre-Budget Report 1999, November 1999, para 4.31

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In April 2001, eligibility was extended to those claiming JSA continuously for 18 months. When claimants reach the 18 month threshold, participation becomes mandatory. Those who have claimed JSA for 18 of the last 21 months may choose to join the New Deal. Some Jobseekers may be eligible to join ND25+ early if they fall within certain categories (listed below) and they are also considered by their NDPA to be disadvantaged in the labour market. The list of early entry categories is:109 • People who have completed a custodial sentence • People with immigration status • homeless people (including rough sleepers) • People affected by drug addiction (including alcoholism) • People who have been in residential care • Ex HM Armed Forces • People with language, literacy or numeracy problems (if they do not enter WBLA) • Lone parents, people with disabilities and carers on JSA (instead of other benefits) 4. Delivery

Provision under ND25+ was expanded from April 2001 to bring its provision closer to that of New Deal for Young People and to incorporate lessons learned from the innovative ND25+ pilots. A press release accompanying the March 2000 Budget gave further details:110

At 18 months of unemployment, people aged over 25 will be required to join the New Deal, which will have the following key features:

a Gateway period aimed at helping people into jobs, tackling barriers to work and providing people with the soft skills they need to succeed in the labour market.

•

•

•

•

a period of full-time activity. Individuals will get a mix of subsidised employment, work-based training, work experience, help with jobsearch, and help with moving into self-employment, depending on their needs and their job goals. The period will be flexible in length, providing 13 weeks of full-time activity for some and up to 26 weeks for others. a follow-through period. Those who do not find work through the full-time activity period would enter the follow-through, where they would get intensive help to capitalise on their experience and move into work. earlier access for groups at a severe disadvantage in the labour market.

Since the introduction of the enhanced programme, ND25+ is also now accompanied by benefit penalties for non-compliance.

109 ONS, New Deal For Young People and Long-Term Unemployed People Aged 25+: Background Information, http://www.dwp.gov.uk/asd/asd1/new_deal/NDYP_ND25plus_Background_Information.pdf

110 DfEE Press Release, Jowell announces Budget boost to tackle unemployment, 27 March 2000

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a. The Gateway period

The aim of the Gateway period is to help participants find work or equip them with the skills and abilities required to progress them to the point where they are job ready. Gateway provision is focused so that it meets the needs of the local labour market and individual ND25+ participants. All participants undergo basic skills screening during the Gateway. They also have immediate access to additional help and support to address any basic skills needs that are identified. Provision for some participants will consist of a series of one off interviews, whereas other participants may attend provision for a number of days. The Gateway must provide a range of provision to ensure it can meet the needs of each individual. Typically, provision in the Gateway might feature:111

• specialist careers advice and guidance • training needs analysis; • basic skills assessment; • short ‘refresher’ basic skills courses; • short job focused training courses covering key skills – for example literacy,

numeracy, IT skills; • help with motivation and confidence building; • mentoring; • short work tasters; • short Intensive Activity Period (IAP) tasters; • provision to support self employment; • specialist assistance to help improve job prospects; • specialist help with other problems such as homelessness, debt, alcohol, drug

and substance abuse; • help for participants with a disability or health problem, jobseekers from ethnic

minorities, or those in rural areas; and • ND25+ participants in London, Manchester, Dundee and Swansea may also take

part in the Gateway to Work course as provided to participants in the NDYP.112 b. Intensive Activity Period (IAP)

ND25+ participants who have not found work by the end of the Gateway will move into the Intensive Activity Period. The IAP aims to help participants into work and increase their employability by addressing more deep-seated barriers to work and providing experience of the world of work. For participants aged between 25 and 49 years, participation in the IAP is mandatory. Participants aged 50 and over are required to participate in the Gateway, but entry to the IAP is voluntary. The IAP usually last for 13 weeks, however for those who need additional assistance it can last for up to 26 weeks. IAP activities last for a minimum of 30 hours a week, over 5 days. Around 11 weeks into the IAP there is a review where the eventual length of the IAP is finalised. If the participant is on the Education and Training Opportunities option, the IAP can last up to 52 weeks. During this time most participants will receive a ND25+ 111 Jobcentre Plus, Provider guidance: Chapter 9: New Deal 25 Plus, June 2005, paras 3-6 112 See section IIA.3.a of this paper.

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allowance administered through Jobcentre Plus which is equivalent to JSA payments plus a top up of £15.38 per week (unless participants are on some form of waged provision). The majority of participants on the IAP will receive a tailored package of provision consisting of a combination (unless on subsidised employment or self employment options) of the following elements:113

• Education and Training Opportunities – provides participants with the opportunity to undertake academic and vocational study, which will equip them with the knowledge, skills and qualifications necessary to succeed in the labour market. Funding will usually be provided for training up to NVQ/SVQ level 3.114 Participants on this option do not receive the top up payment element of their training allowance.

• Work experience/placements. • Work Based Learning for Adults.115 • Subsidised employment – a subsidy is provided to employers of £75 per week for

26 weeks for jobs offering at least 30 hours per week. A subsidy of £50 is offered for jobs of between 16 and 29 hours per week. The employment option operates in much the same way as the New Deal for Young People. Employers must sign an agreement that confirms they have not laid off an existing employee to take on somebody under the New Deal and the post offered must be permanent or expected to last for at least six months. However, unlike the New Deal for Young People, employers do not receive any additional money for training and are not required to offer it.

• Self-employment provision – participants receive training and support to set up and run a business for a period of up to 26 weeks whilst receiving the ND25+ allowance. However, the aim is for most participants to leave early to continue trading on an independent basis, thus allowing the participant to access profits that are accrued. This period will have been preceded by two self-employment focused stages offering relevant advice and training during the Gateway period.

• Help with job search and basic skills problems. 5. Follow-through

If a participant reaches the end of the IAP and has not found a job, they will enter the Follow-through period. The aim of Follow-through is to help participants move as quickly as possible into jobs by making the most of the help they have received on ND25+, thus maximising their chances of it leading to employment. The assistance will usually take the form of intensive help with job search plus advice and guidance needed to improve job prospects. The Follow-through period will normally last up to six weeks. However, it is expected that some participants will require additional help; this period may therefore be extended

113 Jobcentre Plus, Provider guidance: Chapter 9: New Deal 25 Plus, paras 7-16 114 NVQ level 3 qualifications are equivalent in standard to two A levels. 115 For more information see Volume II, Part I, Section A of this Research Paper (RP 05/62).

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up to a maximum of 13 weeks. Once a New Deal participant leaves the IAP and enters the follow-through they begin claiming JSA again. If he/she claims JSA for a further 26 weeks they will re-enter the New Deal at the Gateway stage. 6. Sanctions

Participants who fail to comply with their obligations under the scheme may face benefit sanctions. While on the Gateway, participants continue to claim JSA and must comply with the normal labour market requirements such as being available for and actively seeking work. Regulations designate options within the ND25+ as Government programmes under section 19 of the Jobseeker’s Act 1995.116 This means that, in addition to the normal JSA requirements, participants may be sanctioned if they: • lose a place on a New Deal option through misconduct; or • without good cause, fail to apply for or accept a place on a New Deal option that has

been notified to them; or • without good cause fail to attend a place on a New Deal option; or • without good cause give up a place on a New Deal option. Those sanctioned lose 100% of their entitlement to the JSA personal allowance for two weeks. If the same claimant is sanctioned for a second time within one year, the sanction is increased to four weeks. Unlike participants in other Government programmes under section 19 of the 1995 Act, participants on the NDYP can be sanctioned for 26 weeks if a sanction is applied for a third time in the same 12 month period. Regulations introducing this extra sanction took effect from 6 March 2000.117 The Government argues that there is a small number of young people who are “playing the system” by interspersing periods of compliance with periods of non-compliance in order to minimise the effects of the sanctions.118 Although claimants who are sanctioned lose their JSA personal allowance, they do not lose their underlying entitlement to JSA. For those on income-based JSA, it is entitlement, not actual payment, which acts as a passport to Housing Benefit, Council Tax Benefit and other passported benefits such as free prescriptions, so they will continue to receive these benefits. Prior to the introduction of the enhanced version, benefit sanctions applied to those on the ND25+ in a more limited fashion (2 and 4 week sanctions). However, from 9 April 2001, the 26 week sanction regime as described above was introduced to the ND25+.119

116 Social Security Amendment (New Deal) Regulations, SI 1997/2863 117 Jobseeker’s Allowance (Amendment) Regulations, SI 2000/239 118 The Jobseeker’s Allowance (Amendment) Regulations 2000: report by the Social Security Advisory

Committee, Cm 4549, February 2000 119 For more information on the 26 week sanction regime see: DWP, The impact of the 26 week sanctioning

regime, April 2001

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7. Statistics and cost

Figures relating to the New Deal for Young People and the ND25+ regionally and in Great Britain are published by the DWP on a quarterly basis (at the end of February, May, August and November). These are available on the DWP website.120 Cumulative data covering the period to March 2005 show:

• There have been 792,510 starts to the programme, with 51,570 currently participating in the programme;

• 112,840 individuals had gained a sustained employment upon leaving the enhanced programme. This is equivalent to 26.1% of all starts to the enhanced programme.

DWP expenditure on the ND25+ is shown in the table below:

Expenditure on the ND25+£ million

Administrative Expenditure

Programme Expenditure

Total Expenditure

1998/99 17 17 341999/00 26 71 972000/01 18 42 602001/02 73 140 2132002/03 71 167 2382003/04(a) 62 183 2452004/05(b) 67 189 2562005/06(b) 65 183 248

Notes: All figures rounded to nearest £ million. Following agreement with HM Treasury to remove the ‘ring fences’ from individual New Deals, New Deal administrative expenditure is no longer accounted for separately. Figures for 2002–03 and later years are estimates.(a) Estimated expenditure

(b) Planned expenditure

Source: DWP, Departmental Report, 2004 8. Recent and prospective changes to ND25+

A number of measures have been, or are due to be, introduced to make the ND25+ more flexible. New Deal Streamlining, announced in Budget 2003, came into effect on 26 April 2004. For ND25+, the changes increased the degree of flexibility with which NDPAs were able to deliver services. Specifically, the changes have enabled NDPAs to use their own discretion to determine which customers may benefit from early access.121 In June 2004, the Government outlined plans for further reforms to the New Deal programmes in their publication Building on New Deal: Local solutions meeting individual

120 http://www.dwp.gov.uk/asd/ndyp.asp 121 DWP, Touchbase, June 2004

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needs.122 The paper outlines a new strategy which introduces greater flexibility into the New Deal options, providing a service tailored to the needs of the individual, local areas and local employers. Before national implementation 7 prototype districts will be set up from October 2006 to allow for the new flexible approach to be tested.123 9. Evaluation

The performance of the enhanced ND25+ has been examined in two research reports.124 125 Both found that there had been teething troubles when the enhanced programme was launched but that once these had been overcome the scheme had worked well. The latter report found that staff and training providers thought that ND25+ allowed them to assist most participants, especially those that wanted to be helped. Certain groups (those aged over 50, those with severe basic skill needs and those requiring intermediate/higher level training) were identified as not being well-catered for. With regard to job outcomes, the report found:126

[…] there is a general feeling that the programme has worked reasonably well, though more time is needed for the true potential of the programme to become clear. Certainly significant numbers are leaving the register. Although this is often the result of individuals switching from JSA to other benefits, there are positive signs that many are finding work.

More recently, a report published in 2003 found that:127

The overall impact of the programme in terms of long-term unemployed people leaving benefit and moving into work was modest up until the programme was re-engineered in April 2001. Furthermore, there was little indication of an increase in employability based on a range of measures.

[…]

[However] the re-engineered programme introduced in April 2001 addressed some of the identified problems with the earlier programmes creating an individually tailored package of provision for participants and greater flexibility for Advisers. The change to mandatory programme participation after the Gateway meant that many more participants took an active role in the programme through participation in the IAP. There remain some concerns regarding the Follow-through stage of the programme with clients having variable requirements from this stage of the programme dependent on the extent of their overall needs and what had been achieved earlier in the programme.

[…] 122 DWP, Building on New Deal: Local solutions meeting individual needs, June 2004 123 For more information see Volume I, Part I, Section C of this Research Paper (RP 05/61). 124 Wilson, P., Evaluation of Re-engineered New Deal 25 plus: Case Studies, Employment Service Report

WAE 111, April 2002 125 Winterbottom et al, Evaluation of New Deal 25 Plus: Qualitative Interviews with Employment Service

Staff, Providers, Employers and Clients, DWP Report WAE 127, July 2002. 126 ibid. p6 127 Wilkinson, D., New Deal for people aged 25 and over: a synthesis report: research summary, June 2003

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Early entrants were more likely than regular entrants to go into sustained jobs. At the other extreme very long term unemployed participants, those with five years or more unemployment were far less likely to go into jobs. There was little difference in progression through the programme and job outcomes by gender and whether clients had a disability. Ethnic minorities, however, entered very different ND25 plus opportunities than White participants. However, this did not result in large differences in overall job entry rates between white and ethnic minority participants.

A Conservative Party policy document published prior to the 2005 General Election stated that a Conservative government would abolish all New Deal programmes.128 The Conservatives proposed that the New Deal would be replaced by a system of private-sector led Employment Zones, similar to those currently being piloted in 13 areas across the UK.129 David Willetts, the then Shadow Work and Pensions Secretary, added that research showed “barely a third of all people put through the programme found a job lasting three months or longer … The New Deal is not a route off welfare, it is a revolving door back on to it”.130

10. Further reading

1. Coleman et al, Destination of Leavers from NDYP and ND25 Plus, DWP Report, WAE 206, September 2004.

2. Bivand et al, “New Deal for 25 Plus”, Chapter 19, pp245-80, Welfare to Work

Handbook, Second Edition, CESI, June 2004. 3. Working Brief, “Are New Deals just shuffling the benefits pack?”, Issue 154, May

2004.

4. Wilkinson, D., New Deal for people aged 25 and over: a synthesis report, PSI, June 2003

5. Winterbottom et al, Evaluation of New Deal 25 Plus: Qualitative Interviews with

Employment Service Staff, Providers, Employers and Clients, DWP Report WAE 127, July 2002.

6. Wilson, P., Evaluation of Re-engineered New Deal 25 plus: Case Studies,

Employment Service report WAE 111, April 2002

7. Working Brief, “Evaluating New Deal 25+”, May 2001

8. “Re-engineered New Deal for 25+”, Working Brief, December 2000/January 2001.

128 Conservative Party, Better Public Services, Better Value, Conservative Spending Plans, 2005-2008,

http://www.conservatives.com/tile.do?def=policy.listing.page 129 “Tories set out plan to privatise Jobcentres”, Financial Times, 7 October 2004, p4 130 “Chancellor defends Welfare to Work”, Financial Times, 8 April 2005, p2.

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C. New Deal for Partners

The New Deal for Partners (NDP) is a voluntary programme which offers advice and job search assistance to dependent partners of benefit claimants.131 The programme was introduced nationally in April 1999 and called New Deal for Partners of the Unemployed to April 2001. In April 2004 an enhanced version of the programme was introduced, offering the same package of support available to lone parents. 1. Background

The main aims of NDP are to:132

• reduce the number of households where currently no-one works; • encourage unemployed partners to become economically active; • help progress partners already working part-time to increase their hours or

improve their employment prospects; and • contribute to a reduction in child poverty.

Notably, workless households make up a large and increasing proportion of the unemployed. Where one partner is out of work, the chances of the other partner being in work are much lower.133 In Spring 2005 there were 3.1 million workless working-age households up 61,000 compared with a year earlier, but down 7,000 from five years earlier. There were 3.3 million people of working age living in workless households, up 55,000 compared with the previous year and down 4,000 from five years earlier. Additionally there were just over 1.8 million children living in workless households in Spring 2005 (down 47,000 from the previous year and down 167,000 from five years earlier).134 The programme was first announced in the Chancellor’s Budget Statement on 17 March 1998:135

Past employment programmes have helped men but often ignored employment opportunities for women. From this year, the new deal will be extended to thousands of women previously denied chances of work, and it will do so in three ways. First, for a quarter of a million women, who are partners of unemployed men, we will offer expert and personalised help to find work through pilot programmes to be launched in every region of Britain, paid for from the windfall tax … Secondly, my right hon. Friend the Secretary of State for Social Security will announce next week the personal help that will now be available on a national basis for all lone parents who want to work and whose children are at school. And

131 Individuals are counted as a partner if they are married or live together as if they were married, and their

partner is claiming benefits for them. 132 Bivand, P., “New Deal for Partners”, Welfare to Work Handbook, Chapter 23, second edition, 2004, p313 133 HM Treasury, Budget 2002, April 2002, HC 592 2001/02, p68 134 ONS, Work and worklessness among households, July 2005 135 HC Deb 17 March 1998 c1103

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we will implement a 12-week linking rule so that they do not risk losing benefits as a result of a brief period in work. Thirdly, partners of the unemployed under 25 without children, who are not allowed to register as unemployed, will now be given exactly the same opportunities for training and work that others under 25 now enjoy.

A press notice at the time of the Budget stated:136

A New Deal for the partners of the unemployed. Partners of the unemployed who are themselves out of work (95 per cent of them women) have not had access to employment programmes on the same basis as the claimant unemployed. To address this imbalance, the Chancellor has set aside £60 million from the windfall tax receipts to ensure that partners over 25 have the option to receive the help they need to get back to work. Childless partners aged under 25 will be included in the New Deal.

NDP was first introduced in three pathfinder areas (Cardiff, Leeds and Tayside) from February 1999, and then nationally from April 1999. 2. Eligibility

Initially partners of people who had been claiming Jobseeker’s Allowance (JSA) for six months or more and were claiming for their partner were eligible. From April 2001, NDP was extended to the partners of those claiming other benefits:137

[…] From 23 April 2001, partners of those receiving Income Support, Incapacity Benefit, Invalid Care Allowance and Severe Disablement Allowance [and Pension Credit] will be eligible to participate in New Deal for Partners of Unemployed People. To reflect the wider group, from that date New Deal for Partners of Unemployed People will formally become New Deal for Partners. About 450,000 partners of existing long-term claimants of those benefits will become eligible with a further 80,000 partners becoming eligible during the first year. The aim of New Deal for Partners is to help reduce the number of workless households. Partners will have the opportunity to use the services of a personal adviser to help them directly into a job or, for those who are not job-ready, to training, education and other support.

From March 2001 childless partners of the unemployed aged between 18 and 24 became joint JSA claimants, with the same rights and responsibilities as the main claimant.138 At the same time, those among this group who have been unemployed continuously for 26 weeks are now required to join the New Deal for Young People. In October 2002, joint claims were extended to all childless partners where one partner is

136 HM Treasury, “Budget Boost for Welfare to Work”, Press Release, 17 March 1998 137 HC Deb 29 March 2001 c765W 138 HM Treasury, Budget 2001, March 2001, HC 279 2000/01, p64

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aged 45 or under.139 The Pre-Budget Report 2002 set out further extension of work-focused interviews:140

Compulsory work-focused interviews will be introduced for partners of all new benefit claimants and existing claimants without children from April 2004, beyond those already having joint claim status for Jobseekers’ Allowance. This will be extended to existing claimants with children once the roll-out of Jobcentre Plus is complete.

In October 2004 NDP eligibility was extended to partners who are part of a couple claiming Working Tax Credit, providing they work fewer than 16 hours a week. If a participant makes a claim for JSA in their own right, or start working 24 hours or more a week, they will no longer be eligible for NDP. 3. Delivery

NDP is a voluntary programme and any benefits claimed by the participant’s partner will not be affected if they choose to take part in the programme or leave early.141 Participants on NDP meet a New Deal Personal Adviser who can provide information, support, advice and help with searching for a job. Partners can also be referred to Jobcentre Plus programmes, and help is also available to find appropriate education and training. a. Features of the enhanced version

Since April 2004 Work-Focused Interviews (WFIs) have been compulsory for partners of all new and existing benefit claimants over and above those having joint claim status for JSA. If the partner does not attend a WFI, benefits paid can be reduced by 20% of the Income Support applicable amount for a single claimant aged 25 or over.142 Furthermore NDP now receive the same package of support available to lone parents. After an initial WFI, participating lone parents develop an individual plan of action with the help of their personal adviser on how they can extend their job search skills and training, and (if necessary) find suitable childcare. This includes access to the full range of programmes for the unemployed provided by Jobcentre Plus, including:

• Work Based Learning for Adults/Young People;143 • Travel to Interview Scheme; • Adviser Discretion Fund; • Job Grant.144

139 HM Treasury, Budget 2002, April 2002, HC 592 2001/02, p68 140 HM Treasury, Pre-Budget Report 2002, November 2002, Cm 5664, p74 141 However, if waged provision is taken up as part of the NDP, it is possible that the partner or the primary

benefit claimant may lose entitlement to passported benefits. 142 Bivand, P., op cit, p312. 143 For more information see Volume II, Part I, Sections A and B of this Research Paper (RP 05/62). 144 This provides £250 to all lone parents and couples with children and £100 to single people and couples

without children to help with the transition into work. To qualify for the new Job Grant people will have to

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NDP participants may also be eligible for the following Jobcentre Plus provision:

• New Deal 50+ - this includes financial incentives such as the 50 plus element of Working Tax Credit (WTC) and the Training Grant;145

• New Deal for Disabled People;146 • Access to Work;147 • Job introduction scheme;148 • WORKSTEP;149 • NDYP options;150 • New Deal for 25 plus gateway and Intensive Activity Period.151

If an individual is undertaking training through the NDP they will be paid a Training Premium of £15 a week. Additionally participants can claim travel costs for themselves (and child or helper) associated with participation on the NDP. Childcare costs can also be claimed if a registered childcare provider is used. Advisers can also pay for the cost of training, books and other equipment through the Adviser Discretion Fund (up to £300). From October 2005 a new worksearch premium of £20 per week will be available to those in a family in receipt of the WTC who are not working, who agree to join the enhanced NDP, and voluntarily choose to search actively for a job, in six pilot areas with high levels of worklessness. 4. Statistics, cost and evaluation

Statistics on NDP are not published on a regular basis, and figures are not available at constituency level. Budget 2005 stated that:

[…] to date, over 32,000 partners have attended an interview … Over 1,650 job entries have been recorded for partners who have either attended a WFI or joined NDP since April 2004.

In addition to this a recent written answer stated that between April 1999 and March 2004 7,820 people started the NDP, of which 1,870 (24%) people have gained a job.152 Jobcentre Plus provider guidance on the NDP published in June 2005 stated that 70% of current NDP participants are women.153

be starting work of at least 16 hours a week (24 hours a week for partners) with the employment expected to last a minimum of five weeks. They will also need to have been in receipt of a qualifying benefit continuously for 26 weeks.

145 For more information see Volume I, Part II, Section D of this Research Paper (RP 05/61). 146 For more information see Volume I, Part II, Section E of this Research Paper (RP 05/61). 147 See Jobcentre Plus Access to Work page. 148 See Jobcentre Plus Job Introduction Scheme page. 149 See Jobcentre Plus WORKSTEP page. 150 For more information see Volume I, Part II, Section A of this Research Paper (RP 05/61). 151 For more information see Volume I, Part II, Section B of this Research Paper (RP 05/61). 152 HC Deb 23 February 2005 c676 153 Jobcentre Plus Provider Guidance, New Deal for Partners, June 2005, Chapter 14

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DWP expenditure on the NDP is shown in the table below:

Expenditure on the NDP£ million

Administrative Expenditure

Programme Expenditure

Total Expenditure

1998/99 1 0 11999/00 5 0 52000/01 10 1 112001/02 6 2 82002/03 6 0 62003/04(a) 4 0 42004/05(b) 8 4 122005/06(b) 13 7 20

Notes: All figures rounded to nearest £ million. Following agreement with HM Treasury to remove the ‘ring fences’ from individual New Deals, New Deal administrative expenditure is no longer accounted for separately. Figures for 2002–03 and later years are estimates.(a) Estimated expenditure(b) Planned expenditure

Source: DWP, Departmental Report, 2004 The performance of NDP was assessed in an article in Working Brief.154 This found that take-up of NDP has been much lower than on the other New Deals. Reasons for this include the lack of incentives and lack of familiarity with the programme on the part of Personal Advisers. Another difficulty is that partners are not a cohesive group, and they face a variety of barriers to work. A report on NDP prepared for the Employment Service found that lack of confidence, views about household roles and childcare were particularly significant barriers for partners.155 The report concluded that, while take-up of NDP was low, those who did participate appeared to benefit. The DWP are currently in the process of carrying out qualitative and quantitative evaluations of the enhanced NDP and WFIs for partners.156 A Conservative Party policy document published prior to the 2005 General Election stated that a Conservative government would abolish all New Deal programmes.157 The Conservatives proposed that the New Deal would be replaced by a system of private-sector led Employment Zones, similar to those currently being piloted in 13 areas across the UK.158 David Willetts, the then Shadow Work and Pensions Secretary, added that research showed “barely a third of all people put through the programme found a job

154 “New Deal for Partners”, Working Brief, August/September 2002 155 Thomas, A. and Saunders, T., New Deal for Partners: Qualitative Research, Employment Service Report

WAE 112, April 2002 156 When published, these will be available at:: http://www.dwp.gov.uk/jad/ 157 Conservative Party, Better Public Services, Better Value, Conservative Spending Plans, 2005-2008,

http://www.conservatives.com/tile.do?def=policy.listing.page 158 “Tories set out plan to privatise Jobcentres”, Financial Times, 7 October 2004, p4

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lasting three months or longer … The New Deal is not a route off welfare, it is a revolving door back on to it”.159 5. Further reading

1. Jobcentre Plus Provider Guidance, New Deal for Partners, Chapter 14, June 2005

2. Bivand, P., “New Deal for Partners”, Welfare to Work Handbook, Chapter 23,

second edition, 2004

3. Thomas, A. and Saunders, T. New Deal for Partners: Qualitative Research, Employment Service Report WAE 112, April 2002

4. Bonjour, D. and Dorsett, R., New Deal for Partners: characteristics of labour

market transitions of eligible couples, DWP Report WAE 134, August 2002

5. “New Deal for Partners”, Working Brief, August/September 2002

6. “Including partners of the unemployed”, Working Brief, July 2001

159 “Chancellor defends Welfare to Work”, Financial Times, 8 April 2005, p2

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D. New Deal for 50 Plus

The New Deal for 50 Plus (ND50+) provides a combination of advice, help with job-search, and financial support to help the over-50s back into work. It is a voluntary programme. ND50+ started in October 1999, in nine pathfinder areas: Black Country; Manchester; Dorset; Durham; Edinburgh East and Midlothian; Hull; North Derbyshire; North East Wales; and Oxfordshire. The programme was rolled out nationally on 3 April 2000. 1. Background

The Chancellor announced details of the over-50s Employment Credit in the 1999 Budget:160

Nearly 30 per cent. of men over 50 are outside the labour force-twice as many as 20 years ago.

We need their talents. For those unemployed for six months or more, we will create a new employment credit which will guarantee a minimum income of £9,000 a year, for their first year back in full-time work--at least £170 a week.

The 1999 Budget Report contained details of the personal adviser service and job-search help:161

4.31 The employment rate of men over 50 has fallen sharply in the last 20 years, whilst women over 50 have not seen the large increases in participation that are so marked among younger women. A New Deal for the over 50s will provide personalised advice for people over 50, where they or their partner have been on benefits for more than six months, to help them return to work. The programme will be voluntary, and available to people who are economically inactive as well as unemployed. The programme will complement the new Employment Credit for over 50s. Pathfinders will start in October 1999, prior to national roll-out of the programme in 2000. 4.32 Many workers over 50 have skills that may have been superseded, or become rusty from a period out of the labour force. In addition to an Employment Credit, the over 50s will be eligible to up to £750 in-work training grants to help them acquire accredited training to take up and keep a new job.

The Department for Work and Pensions (DWP) has a Public Service Agreement Target to increase the employment rate of those aged from 50 to the State Pension Age and, by 2006, to reduce further the difference between the over-50s and overall employment rates.162

160 HC Deb 9 March 1999 cc87-88 161 HM Treasury, Budget 99, March 1999, HC 298, p56 162 DWP, Simplicity, Security and Choice: Working and Saving for retirement, December 2002, p98

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The employment rate for those aged 50-59/64 was 70.4% in the Spring quarter of 2005 (72.3% for men and 67.7% for women). This compares with a rate of 74.7% for those aged 16-59/64.163 The chart below shows the trend in employment rates since 1992.

Employment rate; those aged 50-59/64

55.0

60.0

65.0

70.0

75.0

Sprin

g 92

Sprin

g 93

Sprin

g 94

Sprin

g 95

Sprin

g 96

Sprin

g 97

Sprin

g 98

Sprin

g 99

Sprin

g 00

Sprin

g 01

Sprin

g 02

Sprin

g 03

Spr

ing

04

Spr

ing

05

% o

f all a

ged

50-5

9/64

Men Women All personsSource: ONS, Labour Force Survey

The table below shows employment rates by region. The employment rate for men aged 50-64 varies between 59.4% in the North East and 78.5% in the East and South East. The employment rate for women aged 50-59 is lowest in the North East at 62.3% and highest in the South East at 72.8%.

Employment rates by region: March-May 2005% of all aged 50-59/64; not seasonally adjusted

Men (50-64) Women (50-59) All (50-59/64)

East 78.5 72.2 75.9East Midlands 73.3 70.8 7London 73.9 66.3 7North East 59.4 62.3 6North West 64.9 64.4 6Scotland 71.0 66.9 6South East 78.5 72.8 76.1South West 76.4 72.4 7Wales 64.2 63.1 6West Midlands 73.0 66.2 7Yorkshire and Humberside 71.2 69.1 7

UK 72.2 68.0 70.5

Source: ONS, Labour Force Survey

2.30.60.64.79.3

4.73.70.20.3

163 Source: ONS, Labour Force Survey. The employment rate expresses the number of people in

employment as a percentage of all people in the relevant age group. Seasonally adjusted figures for Spring 2005.

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2. Eligibility and delivery

The programme is voluntary and individuals will not lose any benefits if they decide to take park. Also, participants can leave the programme at any time without losing benefits. In order to gain access to a personal adviser and job-search help, participants must be aged 50 or over164 and have claimed one or more of the following benefits for at least six months:

• Income Support; • Jobseeker’s Allowance, including NI credits only claims; • Incapacity Benefit; • Severe Disablement Allowance; • State Pension Credit.

Time spent on Carer’s Allowance and the Bereavement Allowance will also count towards the six months on benefits. The programme is also open to those whose partner has been receiving an increase in benefits for them for at least six months. Unlike other New Deal programmes, there is no early entry into ND50+. A written answer in 2003 estimated that around 75% of people claiming JSA aged 50 and over leave the benefit within the first six months.165 The programme offers personal advice and job-search help. Those on the programme receive help from a New Deal personal adviser. According to the New Deal website, this help may include:166

• assistance with an action plan to help get a job; • help with job-search and applications for suitable jobs; • organising possible training opportunities in order to improve skills; • organising voluntary work which may develop employable skills; • providing support and reassurance throughout the programme.

ND50+ participants also have access to Jobcentre Plus’s full range of mainstream programmes at the discretion of their personal adviser. These include:

• Work Based Learning for Adults/Young People;167 • Travel to Interview Scheme;168 • Adviser Discretion Fund; • Job Grant;169

164 Since October 2004, there has been no upper age limit for participation on ND50+. 165 HC Deb 18 December 2003 c1099W 166 http://www.newdeal.gov.uk/newdeal.asp?DealID=50PLU&Show=SUMMARY 167 For more information see Volume II, Part I, Sections A and B of this Research Paper (RP 05/62). 168 For more information see Volume II, Part I, Section G of this Research Paper (RP 05/62). 169 This provides £250 to all lone parents and couples with children and £100 to single people and couples

without children to help with the transition into work. To qualify for the new Job Grant people will have to be starting work of at least 16 hours a week (24 hours a week for partners) with the employment expected to last a minimum of five weeks. They will also need to have been in receipt of a qualifying benefit continuously for 26 weeks.

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• Work-trials.170 Those who move into work through ND50+ may be eligible for a training grant of £1,500 and the over-50s element of the Working Tax Credit (see next section). 3. The Working Tax Credit and Training Grant

There are two financial elements to ND50+: the Working Tax Credit (which replaced the Employment Credit in April 2003) and a training grant. Until April 2003, the Employment Credit was available to those going into employment, or self-employment, of at least 16 hours per week. Eligibility was restricted to individuals having an expected total income of less than £15,000 a year (including income from other sources, such as private pensions and investments). Although other income was taken into account for eligibility, there was no capital test. It paid £40 per week for 16-30 hours work and £60 per week for more than 30 hours per week for up to a year. The Employment Credit was tax-free and was paid directly to the employee (unlike some of the other New Deals where subsidies are paid to the employer). The Working Tax Credit (WTC) replaced the Employment Credit from April 2003, although the amounts received upon entering full-time or part-time have not changed from those outlined above.171 In addition, an extra amount of WTC is available for those on ND50+ and is paid for the first 52 weeks of employment. WTC is based on family income so the precise amount received will depend on this. To be eligible for the 50+ element of the WTC, the participant must have been receiving Income-based Jobseeker’s Allowance, Incapacity Benefit, Severe Disablement Allowance, State Pension Credit or Income Support for the previous six months. HM Revenue and Customs website states that:172

You may also qualify if you have been signing on for National Insurance Credits or receiving Invalid Care Allowance or Bereavement Allowance for 26 weeks or more before going on to make a successful claim for one of the 5 benefits listed above. If you have just returned to work but your partner was receiving one of the benefits listed above you can still qualify if a dependant supplement was paid as part of the benefit.

From July 2002, the training grant was increased to £1,500 (previously it had been £750) and the period during which it can be claimed doubled to two years. The training grant is available to those to anyone who has found work through the ND50+ (up to April 2004, individuals also had to be claiming the over-50 element of WTC). £1,200 can be awarded for training relevant to the job and £300 is available for wider career related

170 For more information see Volume II, Part I, Section H of this Research Paper (RP 05/62). 171 The WTC is also tax free. 172 https://www.taxcredits.inlandrevenue.gov.uk/Qualify/WhatAreTaxCredits.aspx

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training. The Training Grant is to help participants with skills needed to do the job they have obtained rather than helping them get a job they want to apply for.173 4. ND50+ pilots

In December 2002 the DWP published a Green Paper on pensions.174 It set out a number of proposals designed to help those over 50 back to work:175

25. From 2003 we will progressively introduce a new package of more intensive back-to-work help for people aged 50 and over, and guidance to employers on the benefits of recruiting and training older workers.

[…]

27. For people aged 50 to 59 who have been claiming JSA for 18 months, we propose running a pilot study to trial mandating their participation in the New Deal 25 plus Intensive Activity Period from 2004. Long-term unemployed jobseekers aged 25 to 49 are already required to participate in this programme because it offers extensive help back into work. At present, jobseekers aged 50 and over who have claimed JSA for 18 months can volunteer to take up this extra help. However, they often fail to do so because many have grown demoralised about the chance of returning to work. 100 28. We will pilot work with voluntary sector organisations to extend information about back-to-work help and local job and volunteering opportunities to help improve the employment prospects of jobless people aged 50 and over.

29. We will pilot the use of local agents based in the business community to raise employer awareness of the business benefits of recruiting and training older workers. These agents will focus on those sectors experiencing skills and labour shortages in their area.

Further details of the package of help available to the over-50s were given in a Ministerial Statement by Andrew Smith, Secretary of State for Work and Pensions.176 11 sites piloting a mandatory New Deal 25 plus Intensive Activity Period for people aged 50 to 59 were launch in April 2004,177 and a further three were launched in October 2004.178 Bids were also invited from private and voluntary sector organisations to extend information about back-to-work help and local job and volunteering opportunities to help improve the employment prospects of jobless people aged 50 and over. These two year pilots commenced in April 2004.179

173 Centre for Economic and Social Inclusion, The Welfare to Work handbook 2004, Second Edition, p287 174 DWP, Simplicity, Security and Choice: Working and Saving for retirement, December 2002 175 Ibid. pp99-100 176 HC Deb 18 September 2003, c60-62WS 177 These were: Bridgend; Buckingham & Oxfordshire; Calderdale & Kirklees; Coventry & Warwickshire;

East Lancashire; Essex; Hampshire; Leicester; Shropshire; Somerset; Suffolk. 178 In: Derbyshire; Gateshead & South Tyneside; Renfrewshire, Inverclyde, Argyll and Bute. 179 In: Lanarkshire; Liverpool; Leeds; Wigan; City of Sunderland; Bradford; Fife; Staffordshire; Dudley and

Sandwell; Newcastle and North Tyne; Eastern Valleys; Cardiff and Vale.

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a. Over 50s outreach pilots

A further pilot programme aimed at those over 50 on benefits such as incapacity benefit, income support and severe disability allowance was announced in May 2004:180

The pilot involves external organisations acting as an intermediary between the Jobcentre and the customer. These organisations will:

contact people aged 50 and over who are not in work, and encourage their use of Jobcentre Plus services or volunteering opportunities;

market the back to work help, employment and volunteering opportunities available and overcoming the concerns of some IB and IS clients that their benefits may be affected if they approach a Jobcentre Plus office with a work related enquiry; and

promote the back to work help available through Jobcentre Plus to people aged 50 and over who may not be aware of this help or who do not normally have contact with Jobcentre Plus.

The pilot will run in seven Jobcentre Plus regions for two years and commenced in April 2004. The organisations that successfully tendered for the pilot are as follows:

Region

District

Partner Organisation

Wales Cardiff & Vale Working Links North East Newcastle & North Tyneside Age Concern North Tyneside North West Wigan Adactus Housing Group North West Liverpool Forty Plus West Midlands Dudley & Sandwell Pertemps Employment Alliance Scotland Lanarkshire South Lanarkshire Council Scotland Fife Instep

5. Recent and future developments

The 2004 Budget included an announcement on older workers:181

The Government is committed to opening up individual choice and is encouraging age positive employment practices and flexible approaches to retirement, to be backed by legislation from late 2006. Budget 2004 announces a new high profile national guidance campaign to raise employers’ awareness of, and ability to adopt, flexible employment and retirement opportunities in order to increase the recruitment, training and retention of older workers.

180 HC Deb 12 May 2004 cc18-19W 181 HM Treasury, Budget 2004, HC 301 2003/04, March 2004, para 4.41

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More information on Age Discrimination and associated legislation may be found in Library Standard Note SN/BT/2232. More information on changes to the law governing retirement age may be found in Library Standard Note SN/BT/961. In June 2004, the Government outlined plans for further reforms to the New Deal programmes in their publication Building on New Deal: Local solutions meeting individual needs.182 The paper outlines a new strategy which introduces greater flexibility into the New Deal options, providing a service tailored to the needs of the individual, local areas and local employers. Before national implementation 7 prototype districts will be set up from October 2006 to allow for the new flexible approach to be tested.183 6. Statistics and Cost

Figures relating to jobs gained through the ND50+ regionally and in Great Britain are published by the DWP on a quarterly basis (at the end of February, May, August and November). These are available on the DWP website.184 Cumulative data covering the period to March 2005 show that since April 2003 39,230 people have gained a job through the ND50+. Figures on the number of people participating in ND50+ are not available. Up to March 2003, job outcomes for New Deal 50-plus were based on the number of people taking up the New Deal 50-plus Employment Credit. Between April 2000, when New Deal 50 Plus started, and March 2003, there were 98,040 employment credit starts.185 During this period, figures for the number of people finding jobs through New Deal 50-plus but not receiving the employment credit are not available. Statistics on Employment Credit starts to March 2003 are not directly comparable with statistics published after this date.186 Statistics on the take-up of the training grant to March 2003 were given in the following written answer:187

Mr. Browne: Between April 2000 and March 2003 5,520 people applied for and received the in-work training grant offered by the New Deal 50 plus. Jobcentre plus Personal Advisers discuss and agree training plans with eligible clients before the training is undertaken, therefore all those making an application will receive a grant.

DWP expenditure on the ND50+ to 2002/03 is shown in the table below. Since 2003/04 Annual Managed Expenditure (AME) on the ND50+ has been subsumed within the Working Tax Credit and therefore full expenditure figures are not available:188

182 DWP, Building on New Deal: Local solutions meeting individual needs, June 2004 183 For more information see Volume I, Part I, Section C of this Research Paper (RP 05/61). 184 http://www.dwp.gov.uk/asd/nd50p.asp 185 See: http://www.dwp.gov.uk/asd/asd1/nd50p/nd50p_ecstarts.xls 186 For more information see: http://www.dwp.gov.uk/asd/asd1/nd50p/nd50p_Background_Information.pdf 187 HC Deb 18 December 2003 c1099W

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Expenditure on the ND50+£ million

Administrative Expenditure

Programme Expenditure(c)

Total Expenditure

1999/00 2 1 32000/01 11 45 562001/02 5 82 872002/03 5 82 87

Notes: All figures rounded to nearest £ million. Following agreement with HM Treasury to remove the ‘ring fences’ from individual New Deals, New Deal administrative expenditure is no longer accounted for separately. Figures for 2002–03 and later years are estimates.(a) Estimated expenditure(b) Planned expenditure(c) AME programme expenditure has been subsumed within the Working Tax Credit from 2003/04.

Source: DWP, Departmental Report, 2004 7. Evaluation

A 2001 evaluation for the then Employment Service by the Institute for Employment Studies concluded:189

• there were positive views about the scheme among both clients and those administering it;

• the scheme has been successful in getting people into work and the level of sustained employment has been significant.

The report noted the possibility of substantial deadweight (i.e. many who found work through the scheme would have found work anyway). It also noted a number of possible problems such as failure to attract many non-JSA recipients who are eligible. The programme appears to have been more successful in dealing with younger participants and those who had been unemployed for a short period of time. The scheme was less successful in dealing with the more difficult cases. Take-up of the training grant had been low. Two more research reports on the long-term outcomes of ND50+ have been published by the DWP. The first report involved interviewing 60 people who had found work through ND50+, and who had received the Employment Credit (EC).190 This research found that just under half of those interviewed would have returned to work anyway without the EC. It was also found that when the EC expired, most carried on working. In the longer term (up to two years after returning to work), around 80% were still in work. According to the report:191

188 AME is public expenditure for which multi-year spending limits are not seen as appropriate, and which is

instead subject to annual review. 189 Atkinson, J., Evaluation of the New Deal 50plus: Summary Report, Employment Service Research and

Development Report ESR 103, December 2001. 190 Atkinson et al, New Deal 50plus: Sustainability of Employment, DWP report WAE142, February 2003 191 ibid. p2

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… such results suggest an employment survival rate of around two-thirds towards the end of the second year. In comparison with other ‘New Deals’ and indeed with active labour market programmes generally, this seems to be a very high proportion.

This is attributed to the voluntary nature of the programme and the commitment to work of the participants. Take-up of the training grant was again found to have been low. The second report published by the DWP in March 2003 examined the characteristics of those claiming the EC and job retention in the 12 months after their entitlement to the EC had expired.192 This research found that of the 75,000 individuals who took up the EC in the period to June 2002, 69% were male, 32% were disabled and 96% were white. 59% were aged 50-54 and 72% were previously claiming JSA. Job retention among those whose EC claim had expired was found to be high. 77% were not on benefit during the year after the expiry of their EC claim. However, it should be pointed out that the group analysed here had spent twelve months in work and are described as “a fairly settled group”. Participants more likely to return to benefits would be more likely to have left employment before claiming the full 12 months of the EC. The research is also based only on a relatively limited sample of people for whom there was full benefit data for the 12 months following the end of their EC claim. The DWP published A review of ‘what works’ for clients aged over 50 in October 2003.193 This considered a number of programmes for which the over-50 age group are eligible. Its findings relevant to ND50+ were:194

Financial incentives, particularly the New Deal 50 plus Employment Credit (EC), were welcomed. The EC incentivised work not only by encouraging some to consider work as an option who would otherwise not have done so, but also through encouraging customers to consider a wider range of jobs. The level of job retention once the EC ran out was high, although some clients experienced significant financial difficulties without it.

[…]

New Deal 50 plus: has been effective for older claimants, particularly for the small proportion of those claiming JSA (participation by non-JSA customers remains low). Over 98,000 Employment Credit starts were made from April 2000 to March 2003; approximately 70 per cent by JSA claimants, 12 per cent by claimants of non-JSA benefits and 18 per cent by claimants of National Insurance credits only.

A 2004 report by the OECD commented on the effectiveness of the ND50+.195 If concluded that, in terms of active labour market programmes ND50+ was a “unique initiatives among OECD countries which should be commended”. However, various aspects of the programme could be enhanced, in particular, by increasing the

192 Grierson, K., New Deal 50 plus: Quantitative Analysis of Job Retention, DWP report WAE 151, March

2003 193 Moss et al, A review of ‘what works’ for clients aged over 50, DWP report W174, October 2003 194 ibid. p2 195 OECD, Ageing and employment policies: United Kingdom, 2004

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transparency of the potential financial benefits available under ND50+ and by enhancing take-up of the training grant. It suggests that improved co-ordination among the various active labour market programmes on offer could also help improve outcomes for all but especially those at risk of long-term unemployment such as the older unemployed. In 2004 the National Audit Office published a report titled Welfare to Work: Tackling the Barriers to the Employment of Older People.196 This report concluded that:

Compared with other New Deal programmes, performance data for New Deal 50 Plus is limited, and a full economic evaluation of its effectiveness in increasing employment among older people has not been undertaken. Consequently, the Department does not know how many might have found work anyway, without the programme’s assistance [i.e. the extent of any deadweight within the programme]. However, evaluations that have taken place indicate that over 50 per cent of those who took up the financial incentive would most probably have taken the work without the financial incentive.

[..]

In April 2003, the in-work financial incentive under New Deal 50 Plus changed from an Employment Credit to a payment made as part of the Working Tax Credit. The Employment Credit had been paid directly to the individual and was highly visible, whereas the Tax Credit is made in arrears by an adjustment to pay packets and based on household not individual income. Data on the take up of the Tax Credit is not available, but anecdotal evidence from Jobcentre Plus staff and third parties suggests this change has had a detrimental effect on participation in the programme.

The report also found that:197

Not every Jobcentre Plus office has an adviser specialising in the New Deal 50 Plus; many cover a range of programmes. New advisers should receive generic training applicable for all types of adviser and specific modules for individual programmes, such as New Deal 50 Plus. In all three Jobcentres we examined, two of which had experienced high staff turnover, most advisers felt that their training was insufficient to enable them to provide an adequate assessment and advisory service for older people, and some had received no formal training at all.

[…]

Jobcentre staff, customers and third parties all felt that services for older people, in particular New Deal 50 Plus, were too inflexible to meet the needs of some customers. In particular, where intervention is required to help older people back into employment, there is evidence that many would benefit from earlier access to services than is currently available.

196 NAO, Welfare to Work: Tackling the Barriers to the Employment of Older People, 15 September 2004 197 ibid. pp13-14

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However, it went on to say that the reforms outlined in the DWP’s Building on the New Deal paper should rectify some of these problems and help older people in finding employment. In 2005, the Public Accounts Select Committee examined the NAO report and produced a report which broadly came to the same conclusions.198 Notably that:

Compared with some other New Deals, performance information for New Deal 50 Plus is poor. The Department should ensure it collects basic data from the outset, including outcomes and costs, so that it can better monitor success.

[…]

All major employment programmes should be evaluated to determine, as far as possible, their net economic effect, and their continuing value for money. The New Deal 50 Plus is the Department’s main employment initiative for this age group, but the number who would have found work anyway has not been assessed. A full economic evaluation, like that for the New Deal for Young People, should estimate the full impact of the programme on the public purse and on the economy.

Finally, a Conservative Party policy document published prior to the 2005 General Election stated that a Conservative government would abolish all New Deal programmes.199 The Conservatives proposed that the New Deal would be replaced by a system of private-sector led Employment Zones, similar to those currently being piloted in 13 areas across the UK.200 David Willetts, the then Shadow Work and Pensions Secretary, added that research showed “barely a third of all people put through the programme found a job lasting three months or longer … The New Deal is not a route off welfare, it is a revolving door back on to it”.201 8. Further reading

1. Public Accounts Select Committee, Welfare to Work: Tackling the Barriers to the Employment of Older People, 10th Report of Session 2004/05, 9 March 2005

2. NAO, Welfare to Work: Tackling the Barriers to the Employment of Older People,

15 September 2004 3. OECD, Ageing and employment policies: United Kingdom, 2004 4. Holyfield, J., “New Deal for 50 Plus”, Welfare to Work Handbook, Chapter 20,

second edition, 2004

198 Public Accounts Select Committee, Welfare to Work: Tackling the Barriers to the Employment of Older

People, 10th Report of Session 2004/05, 9 March 2005 199 Conservative Party, Better Public Services, Better Value, Conservative Spending Plans, 2005-2008,

http://www.conservatives.com/tile.do?def=policy.listing.page 200 “Tories set out plan to privatise Jobcentres”, Financial Times, 7 October 2004, p4 201 “Chancellor defends Welfare to Work”, Financial Times, 8 April 2005, p2

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5. Joseph Rowntree Foundation, Crossroads after 50: Improving choices in work and retirement, December 2003

6. Humphrey, A. et al, Factors affecting the labour market participation of older

workers, DWP Research Report 200, 2003

7. Moss, N. et al, A review of ‘what works’ for clients aged over 50, DWP report W174, October 2003

8. Grierson, K., New Deal 50 plus: Quantitative Analysis of Job Retention, DWP

report WAE 151, March 2003 9. Atkinson, J. et al, New Deal 50plus: Sustainability of Employment, DWP report

WAE142, February 2003 10. DWP, Simplicity, Security and Choice: Working and Saving for retirement, Cm

5677, December 2002 11. “A better deal for the over 50s”, Centre for Economic and Social Inclusion,

Working Brief, April 2002 12. Atkinson, J. Evaluation of the New Deal 50plus: Summary Report, Employment

Service Report ESR 103, December 2001

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E. New Deal for Disabled People

1. Introduction

The New Deal for Disabled People (NDDP) is a voluntary programme that provides a combination of advice, help with job search, and financial support in order to assist individuals in finding sustained employment. The NDDP is targeted specifically at people with disabilities and long-term health problems, particularly those receiving benefits on the grounds of incapacity for work. Individuals with learning difficulties or disabilities are also eligible for help via the NDDP. The programme is delivered to customers through individual Job Broker organisations across Great Britain. Organisations securing Job Broker contracts include voluntary and not-for-profit agencies, private sector companies and public sector organisations. They usually have a track record of working with people with health conditions and disabilities, and some specialise in working with people with a particular type of health condition or disability, for example mental health conditions. 2. Background

In his Budget statement on 2 July 1997, the Chancellor announced plans to help people with disabilities or on incapacity benefit return to employment:202

In 1997, no one in our society who wants to do some work should be excluded from the right to work because of disability or incapacity. So as a final element of our Welfare to Work strategy, we shall bring forward proposals to help those who are disabled or on incapacity benefit, and who want training or work. To fund that programme and other measures, I have set aside £200 million from the windfall fund.

When the NDDP was introduced on a pilot basis in 1998, it had two main elements:

• a personal adviser service and

• a series of innovative schemes to help sick or disabled people return to work. The scheme was extended nationally in July 2001, drawing on the experience of the pilots but rolling out neither model as such.203 Andrew Smith, the then Secretary of State for Work and Pensions, announced in a written statement in July 2003 that NDDP would run until March 2006.204 The Minister for Employment, Margaret Hodge, recently announced that the NDDP was to be extended for a further year until 31 March 2007.205

202 HC Deb 2 July 1997 c310 203 DWP Press Release, New Deal for disabled people: National survey of Incapacity Benefits Claimants, 19

December 2001. 204 HC Deb 17 July 2003 cc65-65WS 205 HC Deb 20 July 2005 c103WS

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The DWP’s five year strategy, published in February 2005, placed an increased priority on helping those who are out of work because of sickness or disability.206 The emphasis on individuals with disabilities was in direct response to a 2005 Strategy Unit report which “set out a 20-year vision, so that, by 2025, disabled people in Britain will have full opportunities to improve their quality of life, and will be respected and fully included as equal members of society.”207 3. Eligibility

Participation on the NDDP is voluntary. People receiving one or more of the following benefits can get help from NDDP:208

• Incapacity Benefit; • Severe Disablement Allowance; • Income Support including a Disability Premium; • Income Support where Incapacity Benefit has been stopped and the claimant is

appealing against the decision; • Housing Benefit or Council Tax Benefit including a Disability Premium for the

participant where they are not in paid work of 16 hours a week or more, or getting Jobseekers Allowance;

• Disability Living Allowance for the participant. The participant must not be in paid work for 16 hours a week or more or receiving JSA;

• War Pension with an Unemployability Supplement; • Industrial Injuries Disablement Benefit (IIDB) with an Unemployability

Supplement; • National Insurance credits because of incapacity (these may be received either

on their own or with Income Support, Housing Benefit, Council Tax Benefit or War Pension);

• A benefit equivalent to Incapacity Benefit from an EU member state.209 There is no qualifying length of incapacity; all customers who receive one of the qualifying benefits can join NDDP. 4. Job Brokers

A key element of NDDP is the Job Broker service. The network of Job Brokers was introduced in July 2001. It offers support and guidance for those looking for work and advises employers on the needs of the disabled. Specifically, Job Brokers are contracted to help customers find, secure and sustain paid employment and work with employers to match their vacancies with the skills and potential of NDDP customers. Announcing the establishment of the network of Job Brokers, the then Social Security Minister Hugh Bayley said:210

206 DWP, Department for Work and Pensions Five Year Strategy, February 2005 207 Strategy Unit, Improving the life chances of disabled people, January 2005 208 http://www.newdeal.gov.uk/english/unempdisabled/unempdisabledsub2.asp 209 http://www.newdeal.gov.uk/newdeal.asp?DealID=NDDIS&Show=SUMMARY

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Job Brokers will work closely with employers to help disabled people prepare to move into, or back into work. Job Brokers will need to understand the local labour market and be aware of the needs of disabled people. They will match jobs available with the skills needed to fill them, and help develop skills for those who do not already have them. Job Brokers will work with people with a disability or long term illness entitled to incapacity benefits.

Job Brokers tendered to provide services in a single local authority area (or wider area), initially for the period July 2001 to March 2004. In July 2003, DWP announced an extension of the scheme to March 2006:211

The Secretary of State for Work and Pensions (Mr. Andrew Smith): The New Deal for Disabled People will be extended for a further two years to 31 March 2006. All existing Job Brokers will have the opportunity to participate in this extended programme, but they will be required to meet the new standards of performance and conform to a revised service design that builds on best practice under the existing programme and emerging lessons from the evaluation and experience under other similar programmes including Employment Zones. Job Brokers will be expected to develop rigorous and appropriate back to work plans to support individuals in return for an initial £300 payment for the registration of new customers. We will also be bringing the sustained outcome payments into line with other programmes by making payments after individuals have been in work for 13 weeks and not 26 weeks as currently. Job Brokers will still be expected, however, to provide ongoing support over at least the first 6 months of employment and we will review the effectiveness of their arrangements through our contract management system and through the evaluation of the programme. To participate in this extension Job Brokers will need to demonstrate that they can meet challenging performance targets, in particular in moving people into work. Those Brokers who can demonstrate an ability to meet high levels of performance will have the opportunity to expand their services; and at the same time we will be offering limited, geographically focused opportunities for new providers to enter the programme. Further details about the terms on which extended contracts will be let and upon which new providers might be able to deliver services will be published in the autumn.

NDDP has since been extended further until 31 March 2007, and a tendering process for Job Broker delivery contracts for this additional year will commence in autumn 2005.212 There are around 60 brokers who are drawn from the public, private and voluntary sectors. Potential participants in NDDP can be made aware of Job Brokers in a number of ways:213

210 DSS Press Release: New Measures to Help Disabled People Back to Work - Hodge and Bayley, 13

November 2000. 211 HC Deb 17 July 2003 c65-6WS 212 HC Deb 20 July 2005 c103WS 213 Karl Ashworth et al, New Deal for Disabled People National Extension: First Wave of the first cohort of

the survey of registrants, DWP Research Report W180, December 2003. p2

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• The NDDP Gateway at Jobcentre Plus. New claimants of incapacity benefits should be told about Job Brokers at their work-focused interview.

• DWP mailshots to incapacity benefit claimants. • Marketing by Job Brokers themselves.

In some areas, participants have a choice of broker. There is a website to help locate brokers in each area.214 Information is also available from the NDDP helpline.215 Participants may register with only one broker, although they are free to move between brokers. The Job Broker’s role is to help the participant find and retain work. NDDP aims to encourage innovation, and brokers have been encouraged to develop their own services so provision varies between brokers. The broker’s services may include:

• Help with job applications. • Help matching the participant’s skills to employers’ needs. • Identification of training needs. • Ongoing support during the first six months in employment.

Job Brokers have access to a range of Jobcentre Plus services and consequently may refer NDDP participants to another programme if they meet the eligibility criteria. These programmes include:

• Access to Work;216 • Action Teams;217 • Adviser Discretion Fund; • Job Grant;218 • Job Introduction Scheme;219 • ND50+ credit and training grant;220 • Programme Centres;221 • Residential Training for Disabled Adults;222 • Reduced Rail Fare Schemes and Travel to Interview Scheme;223 • Work Based Learning for Adults/Young People;224 • Work Preparation;225

214 http://www.jobbrokersearch.gov.uk/ 215 Tel: 0800 137 777 216 See Jobcentre Plus Access to Work page. 217 For more information see Volume II Part I, Section E of this Research Paper (RP 05/62). 218 This provides £250 to all lone parents and couples with children and £100 to single people and couples

without children to help with the transition into work. To qualify for the new Job Grant people will have to be starting work of at least 16 hours a week (24 hours a week for partners) with the employment expected to last a minimum of five weeks. They will also need to have been in receipt of a qualifying benefit continuously for 26 weeks.

219 See Jobcentre Plus Job Introduction Scheme page. 220 For more information see Volume I, Part II, Section D of this Research Paper (RP 05/61). 221 For more information see Volume II, Part I, Section F of this Research Paper (RP 05/62). 222 See: DirectGov Residential training for disabled adults page. 223 See Volume II, Part I, Section G of this Research Paper (RP 05/62). 224 For more information see Volume II, Part I, Sections A and B of this Research Paper (RP 05/62).

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• WORKSTEP;226 • Work Trials.227

Payments are made to Job Brokers:

• when the customer registers; • for a job entry; • when a customer achieves 13 weeks of sustained employment.

Since October 2003, Job Brokers have received a registration fee of £300 for each client, provided appropriate back-to-work plans are in place for those wishing to move into work. Much larger payments are made when the client starts work and if they remain in employment. There is no standard rate for these latter payments. They vary from Broker to Broker and are consequently Commercial in Confidence. The DWP announced in July 2003 that the period for claiming payment for sustained job outcomes would be reduced from 26 to 13 weeks (with effect from October 2004) although brokers would still be expected to provide on-going support for those in work for at least six months. 5. Costs and statistics

Statistics on the number of participants are published on the DWP website.228 Figures for the period to March 2005 are shown in the table below. 51.7% of all starts to March 2005 have resulted in the participant gaining a job.

225 See Jobcentre Plus Work Preparation page. 226 See Jobcentre Plus WORKSTEP page. 227 For more information see Volume II Part I Section H of this Research Paper (RP 05/62). 228 http://www.dwp.gov.uk/asd/nddp.asp. This includes more detail by region than shown in the table.

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New Deal for Disabled People: Statistics to March 2005Great Britain

Total number of starts % of total

Number of current

participants% of total Total Jobs % of total

Summaryas at March 2005 147,390 100.0 97,240 100.0 76,130 100.0of which, individuals 134,900 91.5 .. .. 62,070 81.5

GenderMale 93,350 63.3 62,280 64.0 47,720 62.7Female 54,050 36.7 34,960 36.0 28,410 37.3

Ethnic GroupWhite 132,300 89.8 86,150 88.6 70,310 92.4Ethnic Minority Group 9,130 6.2 6,680 6.9 3,220 4.2Prefer not to say 1,400 0.9 960 1.0 1,730 2.3Not stated 4,560 3.1 3,450 3.5 870 1.1

Age Group18 - 24 years 9,930 6.7 7,470 7.7 5,420 7.125 - 34 years 28,580 19.4 19,810 20.4 14,750 19.435 - 49 years 61,720 41.9 40,490 41.6 31,440 41.350+ years 47,100 32.0 29,420 30.3 23,040 30.3

Jobcentre Plus RegionScotland 18,210 12.4 11,740 12.1 9,980 13.1North East 21,370 14.5 13,910 14.3 9,950 13.1North West 23,320 15.8 15,660 16.1 11,220 14.7Yorkshire & Humber 8,250 5.6 5,630 5.8 3,960 5.2Wales 22,190 15.1 14,350 14.8 12,350 16.2West Midlands 9,260 6.3 6,030 6.2 5,090 6.7East Midlands 7,430 5.0 5,070 5.2 3,760 4.9East of England 5,550 3.8 3,670 3.8 2,820 3.7South East 7,320 5.0 4,860 5.0 3,790 5.0London 5,810 3.9 4,020 4.1 3,510 4.6South West 18,640 12.6 12,270 12.6 9,680 12.7

Notes: (a) Participant numbers relate to registrations with NDDP Job Brokers.(b) This total contains both Job Broker and NDDP Jobcentre Plus jobs.

Source: DWP, IAD

Participants(a) Outcomes(b)

Expenditure on the NDDP is given in the table below:

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Expenditure on the NDDP£ million

Administrative Expenditure

Programme Expenditure

Total Expenditure

1998/99 1 0 11999/00 7 15 222000/01 7 7 142001/02 6 4 102002/03 15 16 312003/04(a) 15 27 422004/05(b) 15 27 422005/06(b) 15 27 42

Notes: All figures rounded to nearest £ million. Following agreement with HM Treasury to remove the ‘ring fences’ from individual New Deals, New Deal administrative expenditure is no longer accounted for separately. Figures for 2002–03 and later years are estimates.(a) Estimated expenditure(b) Planned expenditure

Source: DWP, Departmental Report, 2004

Gordon Brown, in his Pre-Budget Report 2004 statement to the House, announced the allocation of a further “£30 million more to expand the numbers who can benefit from the New Deal for Disabled People” for the period to March 2006. The average cost per person entering the NDDP was provided in a November 2004 written answer:229

Average cost of registrations on NDDP

Total expenditure

(£ million)

Total participants

Total registrations

Average cost per

participant (£)

Average cost per

registration (£)

2001/02(a) 10 11,800 13,410 847 7452002/03 31 30,750 34,030 1,008 9112003/04 42 36,410 38,140 1,154 1,101

Notes: (a) NDDP was introduced nationally in July 2001. The expenditure shown for this year only covers the period July 2001 to March 2002.

Source: DWP Departmental Report 2003 and New Deal Evaluation Database, Information

and Analysis Directorate, DWP

6. Evaluation230

There have been three recent DWP research report published in 2005. The first sets out the findings from the second wave of qualitative research with NDDP employers found that:231

229 HC Deb 18 November 2004 c1890W 230 This section covers evaluation of NDDP since its national extension. For evaluation of the pilots which

preceded this see: Dione Hills et al, Evaluation of New Deal for Disabled People Personal Innovative Schemes Pilots, DWP Research Report No. 143, 2001 and Julia Loumidis et al, Evaluation of New Deal for Disabled People Personal Adviser Service Pilots, DWP Research Report No. 144, 2001.

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The impact of the programme seems to have been greatest where Job Brokers could put forward a supply of suitably skilled customers to employers with high staff turnovers or regular vacancies. In these cases, it was the skills of the potential recruits, rather than the fact that they have a health condition or disability that attracted the employer. In this way, non-traditional employers of disabled people and people with health conditions were growing a more diverse workforce as a result of NDDP. (p15)

The second analysed Job Broker service delivery. Notably, the report found that:232

[…] the need [of Job Brokers] to achieve outcomes and specifically, for some, to meet the 25 per cent conversion target, impacted on their ability to meet the needs of all clients. It was seen to impact on the level of contact advisers had with clients, and the extent to which they provided the various service components. In some cases, they felt it prohibited them from providing the particular component at all (for example, access to voluntary work/work placements, Permitted Work, training), while in others, it meant they could only provide limited support in an area (for example, less intensive job search support or confidence building). While services varied and some clearly did provide intensive support over a longer period, it would appear that it was the support (in terms of type and level) required by clients who were furthest from work that was neglected where choices about allocation of resources had to be made.

In conclusion, the report stated that:233

[…] what works lies in the ability of Job Broker services to identify the needs of clients, for them to be matched with an appropriate Job Broker service and with the right types and levels of support, and to maintain effective relations and communication with clients … the diversity of clients’ needs suggests that a single type of organisation will never be sufficient … Relationships between Job Brokers and Jobcentre Plus are likely to be key to the success of NDDP, and as well as drawing on the professionalism of Job Brokers and Jobcentre Plus staff, might be supported by dissemination of examples of good and effective practice … Job Brokers have established themselves as important contributors to the aims of NDDP through the provision of services that can complement and add capacity to what is provided through existing Jobcentre Plus programmes and contracts. (p10)

The third report commented on the impact of the NDDP, stating:234

[…] the majority of those who have gone back to work are those who were in work within the last two years before registration, and hence were closer to the labour market when they registered. Although this could be viewed as a failure of NDDP to support the harder to help with an equal degree of success, a high proportion of registrants close to the labour market who had not returned to work would be an odd outcome from an employment programme.

231 Aston et al., Employers and the New Deal for Disabled People - Qualitative research, Wave 2, February

2005, p15 232 Lewis et al., New Deal for Disabled People: An in-depth study of Job Broker service delivery, February

2005, p69 233 ibid. p10 234 Kazimirski et al., New Deal for Disabled People Evaluation: Registrants Survey Merged Cohorts (Cohorts

one and two, Waves one and two), July 2005, p180

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A 2004 DWP report synthesised the findings from early research with NDDP participants, employers and Job Brokers. This found that:235

Through the provision of in-work support by Job Brokers, the design of the programme recognises that people with a disability or health condition in work can encounter problems in sustaining their employment. Early findings suggest that participants leaving their jobs were more likely to: have a mental health condition; be single with no children; have a job that did not make use of participants’ previous skills, that was unrewarding and did not facilitate social activity; have had work problems with their employer; and have a health conditions that caused a problem with work or made the job difficult.

There is evidence that NDDP may be producing ‘soft’ outcomes, such as improvements in individual’s health and self-esteem. Indeed, most surveyed participants (43 per cent) believed that their involvement to date with a Job Broker had helped improved their feelings of well-being and their self-confidence. Moreover, participants’ commitment to finding work had improved since registering with a Job Broker. One month prior to their registration a third of the participants (33 per cent) were either in work or actively looking for work, but five to six months later this had increased to 71 per cent.

NDDP was examined by the Work and Pensions Committee in their 2003 report, Employment for All: An Interim Report.236 This made a number of comments on NDDP. First, it criticised the level of funding:237

One of the main criticisms of NDDP is that is it severely under resourced and that the budget does not reflect the size of the task to be achieved. There are less than a million JSA claimants and around 850,000 lone parents on benefit, compared with 2.7 million incapacity benefits claimants. The total budget for NDDP from 1997-2002 was £45 million compared with £139 million for NDLP, £486 million for ND25+ and £1,347 million for NDYP. The planned spend for 2002-3 is £58 million for NDDP, £142 million for NDLP, £303 million for ND25+ and £354 million for NDYP. The funding for New Deal for Disabled People is not in proportion to the numbers of people targetted and does not reflect the level of support required by participants. The Committee agrees with evidence from a range of organisations calling for an increase in the funding allocation of NDDP in relation to the other New Deal programmes.

The Committee examined evidence that the outcome-related funding received by Job Brokers encouraged them to focus on those who are easiest to help. The Committee

235 DWP, New Deal for Disabled People (NDDP): first synthesis report, September 2004 236 Work and Pensions Committee, Employment for All: An Interim Report, HC 401-I, Fourth Report of

Session 2002-03 237 ibid. paras 53-54

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recommended that more resources be channelled into helping those clients who face greater difficulties in finding work.238 The Committee also recommended changes to the way Job Brokers are paid. It recommended increasing the initial payment from £100 to £500 and an end to the system whereby contractors are penalised if clients move into part-time, rather than full-time, work.239 There have also been a number of further research reports on the NDDP commissioned by DWP since the programmes introduction. One report surveyed customers who had registered with NDDP between May and June 2002.240 This found that clients were generally pleased with the Job Broker Service, although some specific areas for improvement were identified. This study found that around a third of respondents had started paid work at some point between registration and their survey interview. Another study undertook qualitative research with NDDP participants, Job Brokers and Jobcentre Plus staff.241 This found some evidence of Job Brokers prioritising clients who were closer to work. A third study examined the involvement of employers with NDDP.242 This found low awareness of NDDP although awareness of the New Deal “brand” was high. Many employers who had recruited under NDDP were unaware that they had done so. Most employers had not formed a view about Job Brokers. Where they had, it generally reflected the quality of the person employed and these views were generally positive. Finally, a Conservative Party policy document published prior to the 2005 General Election stated that a Conservative government would abolish all New Deal programmes.243 The Conservatives proposed that the New Deal would be replaced by a system of private-sector led Employment Zones, similar to those currently being piloted in 13 areas across the UK.244 David Willetts, the then Shadow Work and Pensions Secretary, added that research showed “barely a third of all people put through the programme found a job lasting three months or longer … The New Deal is not a route off welfare, it is a revolving door back on to it”.245

238 ibid. para 61 239 ibid. Para 66. Since the report, the initial registration payment has been increased to £300. 240 Ashworth et al., New Deal for Disabled People National Extension: First Wave of the first cohort of the

survey of registrants, DWP Research Report W180, December 2003 241 Corden et al., New Deal For Disabled People National Extension: Findings From The Fist Wave Of

Qualitative Research With Clients, Job Brokers And Jobcentre Plus Staff, DWP Research Report W169, October 2003

242 Aston et al., Employers and the New Deal for Disabled People: Qualitative Research: First Wave, DWP Report WAE145, March 2003

243 Conservative Party, Better Public Services, Better Value, Conservative Spending Plans, 2005-2008, http://www.conservatives.com/tile.do?def=policy.listing.page

244 “Tories set out plan to privatise Jobcentres”, Financial Times, 7 October 2004, p4 245 “Chancellor defends Welfare to Work”, Financial Times, 8 April 2005, p2

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7. Further reading

7. Kazimirski et al., New Deal for Disabled People Evaluation: Registrants Survey Merged Cohorts (Cohorts one and two, Waves one and two), July 2005

8. Aston et al., Employers and the New Deal for Disabled People - Qualitative

research, Wave 2, February 2005

9. Lewis et al., New Deal for Disabled People: An in-depth study of Job Broker service delivery, February 2005

10. Morrin et al., “New Deal for Disabled People”, Welfare to Work Handbook,

Chapter 22, pp301-10, second edition, 2004

11. DWP, New Deal for Disabled People (NDDP): first synthesis report, September 2004

12. Orr et al., Tests of Nonexperimental Methods for Evaluating the Impact of the

New Deal for Disabled People (NDDP), August 2004

13. McDonald et al., Report of the Survey of Job Brokers, November 2003

14. Work and Pensions Committee Report, Employment for All: An Interim Report, HC 401-I, Fourth Report of Session 2002-03

15. Karl Ashworth et al, New Deal for Disabled People National Extension: First

Wave of the first cohort of the survey of registrants, DWP Research Report W180, December 2003

16. Anne Corden et al., New Deal For Disabled People National Extension: Findings

From The Fist Wave Of Qualitative Research With Clients, Job Brokers And Jobcentre Plus Staff, DWP Research Report W169, October 2003

17. J Aston et al, Employers and the New Deal for Disabled People: Qualitative

Research: First Wave, DWP Report WAE145, March 2003

18. Julia Loumidis et al, Evaluation of New Deal for Disabled People Personal Adviser Service Pilots, DWP Research Report No. 144, 2001

19. Dione Hills et al, Evaluation of New Deal for Disabled People Personal Innovative

Schemes Pilots, DWP Research Report No. 143, 2001

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F. New Deal for Lone Parents

The New Deal for Lone Parents (NDLP) is a voluntary programme that provides lone parents on Income Support with help and advice on jobs, benefits, training and childcare. It is one of a set of New Deal programmes which are designed to help disadvantaged people in the labour market, so they can make the transition from benefit receipt to employment. The DfES and DWP share policy responsibility and the programme is delivered through personal advisers at local Jobcentre Plus offices. 1. Background

While the lone parent employment rate had been increasing through the 1990s, at the time of the 1997 General Election the rate still lagged behind those of many other countries.246 Consequently, the Government set a target of increasing the employment rate of lone parents to 70% by 2010 (autumn 2004 figures showed the lone parent employment rate to be at 55.8%).247 As part of achieving this target the Government introduced the NDLP which was foreshadowed in Labour party policy documents before the 1997 General Election and included in their manifesto. The formal announcement came in Gordon Brown's first Budget on 2 July 1997:248

There are now 1 million lone parents bringing up 2 million children on benefit. Any Welfare to Work programme that seriously tackles poverty in our country must put new employment opportunities in the hands of lone parents. So today I am allocating a total of £200 million from the windfall fund for the most innovative programme that any Government have introduced for advice, training, and day and after-school child care to support lone parents.

The NDLP is currently a key driver in the achievement of DWP Public Service Agreement (PSA) target 4a,249 to “increase [over the three years to spring 2006] the employment rate of lone parents, taking account of the economic cycle, and significantly reduce the difference between their employment rate and the overall rate” 250.251 Furthermore, the DWP five year strategy, published in February 2005, placed an increased priority on helping lone parents who are out of work find employment. The strategy highlighted lone parents as a key target group in achieving the Government’s 80% employment aspiration by 2010. 246 In 1997 the lone parent employment rate was 45.3%. Source: DWP, Opportunity for All: Indicators for

people of working age, Indicator table 19: http://www.dwp.gov.uk/ofa/indicators/indicator-19.asp 247 See: http://www.dwp.gov.uk/mediacentre/pressreleases/2005/feb/emp2510-ndlp.asp 248 HC Deb 2 July 1997 cc 309-310 249 Additionally, the Government also sees the NDLP as integral to the achievement of PSA 3 and 5. For

more information see: DWP, Departmental Report 2005, Chapter 2, 2005 250 ibid. 251 The gap between the overall employment rate and the lone parent employment rate in Autumn 2004

stood at 19.0%. A ‘significant’ increase in the lone parent employment rate is defined in the PSA technical notes as at least a two percentage point increase in the spending review period. Similarly, the gap with the overall rate has to close by at least two percentage points for the reduction to be significant.

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The New Deal for Lone Parents was initially introduced in three stages. The first stage pilots began in Cambridgeshire, Warwickshire, Cardiff & Vale, Sheffield East, North Cheshire and North Worcestershire from 21 July 1997; in Clyde Valley from 22 July 1997; and in North Surrey from 4 August 1997.252 In the second stage from April 1998, the programme was extended nationally to those lone parents who made a new or repeat claim for Income Support.253 The programme was launched nationally to all lone parents on Income Support, whose youngest child is over the age of 5, from 26 October 1998.254 During 2000, the Government introduced a number of changes to the NDLP including an extension of invitations to participate in the scheme to lone parents on Income Support with children from the age of three. Others with children under school age may apply to join the NDLP; however they are not currently invited automatically. 2. Eligibility and work-focused personal interviews

Since April 2001, lone parents on Income Support with children over the age of five have been required to meet a personal adviser for a Work-Focused Interview (WFI) to discuss the opportunities available to them, as a condition of receiving benefit.255 Take up of opportunities is optional and participation on the NDLP itself currently remains voluntary. This approach had been piloted in 12 pilot areas since April 2000,256 and in three pathfinder areas, Fife, Shropshire and South Tyneside, since October 2000. From April 2002, these meetings have been extended to lone parents making a new or repeat claim with a child aged three years or over. Furthermore, an additional interview was introduced at the six month stage in the Income Support claim. Any lone parent, irrespective of the age of their youngest child making a new or repeat claim for benefit at a Jobcentre Plus office is required to have a WFI.257 Lone parents already receiving Income Support and with a youngest child aged 13-15 were called for Personal Adviser meetings in 2001/2, those with a youngest child aged 9-12 were called in 2002/03 and those with a youngest child aged 5-8 were called in 2003/04.258 The extension of the requirement to attend a personal adviser meeting to all lone parents on Income Support with children under the age of five from April 2004 was announced in the 2002 Budget.259 Since October 2001, all lone parents who are not working, or who are working less than 16 hours per week, and whose youngest child is under 16 years old, have been offered help and support through the New Deal whether or not they are claiming Income Support. 252 DSS Press Release, New Deal for Lone Parents, 4 July 1999 253 DfEE Press Release, New Deal for Lone Parents to be extended - Smith, 29 April 1998 254 DSS Press Release, New Deal goes national, 26 October 1998 255 DSS Press Release, New Personal Advisory Service For Lone Parents Goes Nation Wide, 30 April 2001 256 HM Treasury, Pre-Budget Report 2000, November 2000, Cm 4917, p76 257 HC Deb 24 July 2002 c1550W 258 DSS Press Release, New Personal Advisory Service For Lone Parents Goes National Wide, 30 April

2001. 259 HM Treasury Budget 2002, April 2002, HC 592 2001/02, p68

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3. Sanctions

Details of the sanctions imposed for the failure to attend the compulsory WFI are outlined in the following written answer:260

Mr. Nicholas Brown: […] Attendance at a PA meeting at the new/repeat claim stage is a condition of entitlement to benefit. If a lone parent chooses not to attend the meeting they will not receive any benefit. For the majority of lone parents who do attend, review meetings are held six months into their claim and then annually while they are still in receipt of Income Support … Lone parents [who had existing claims prior to the introduction of compulsory WFIs] are given up to three pre-notified appointments and if they fail, without good cause, to take part in the PA meeting they are subject to a benefit sanction. This sanction is equivalent to 20 per cent. of the Income Support personal allowance for a single person aged 25 or over … This sanction remains in force until the lone parent takes part in a PA meeting … Adverse decisions can be overturned if the lone parent demonstrates that they had good cause for not attending the meeting.

4. Role of personal advisers

Personal advisers provide an integrated service for lone parents covering job search, help finding childcare services, advice on benefits and help with claiming benefits. After an initial WFI, participating lone parents develop an individual plan of action with the help of their personal adviser on how they can develop their job search skills, training, and find suitable childcare. This includes access to the full range of programmes for the unemployed administered by Jobcentre Plus offices,261 the eligibility rules for which were changed to allow access for lone parents who had been in receipt of benefit for less than six months.262 Furthermore, through their personal adviser, participating lone parents are fast tracked for help with in-work benefits and tax credits and for child maintenance by the Child Support Agency.263 The primary roles of NDLP personal advisers are to:264

• Provide a personalised service of help, advice and support to find suitable training, childcare and jobs for lone parents.

• Help lone parents through the steps to finding a job. • Talk to lone parents about current job vacancies, and how to find them. • Help lone parents to apply for jobs, write a CV and prepare for interviews. • Help the lone parent to find appropriate childcare. • Give advice on the benefits lone parents can get while they are in work. • Provide a better-off calculation of the income they could expect to receive in a

job, from their wages and in-work benefits. • Help lone-parents apply for benefits such as tax credits.

260 HC Deb 24 July 2002 c1550W 261 See Jobcentre Plus website: http://www.jobcentreplus.gov.uk/ 262 DfEE Press Release, New Deal for Lone Parents to be extended, 19 April 1998 263 DSS Press Release, Budget Harriet Harman announces New Deal for Lone Parents, 2 July 1997 264 DSS, Evaluation of the New Deal for Lone Parents, Research Report No 109

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• Help lone parents with their applications for child maintenance. Additionally, lone parents who start work are able to receive continuing in-work support from their personal adviser. Furthermore, for those who are not ready to start work, the NDLP aims to assist lone parents in becoming ‘work-ready’, for example by finding appropriate education or training as a step towards employment. The personal adviser also has access to a fund which they can use at their discretion to help the lone parent overcome the barriers of getting back to work. The New Deal Advisor’s Discretionary Grant is available to lone parents who have been claiming Income Support for at least 6 months and who are participating in the NDLP. Barriers to work could include money for clothing, a bus pass or upfront payments for registered childcare. There is an upper limit of £300. 5. Further developments since NDLP launch

Since it has been launched, the Government has continued to develop provision under the NDLP. The 2001 Budget announced that the Government would introduce greater training flexibility into the NDLP so that lone parents were able to take intensive short work-focused courses, particularly to enable them to acquire standard skills such as basic IT qualifications. Since autumn 2001, the NDLP has also provides help to enable lone parents to move into self-employment.265 In April 2001, the Government made changes to benefits rules and training allowances to make the options available to lone parents under the programme more attractive. These changes included: •

•

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From 9 April 2001 the amount of earnings not counted when calculating Income Support of a lone parent who works less than 16 hours a week increased from £15 to £20 a week. From 30 April 2001 a £15 a week premium in addition to Income Support is payable to lone parents who take up approved training for work through the NDLP. The previous training allowance was £10 per week. From 30 April 2001 anyone taking part in the NDLP can get help towards registered childcare costs if they start a job of less than 16 hours a week.

a. Current NDLP pilots

Since the inception of the NDLP there have been a range of associated pilot projects introduced. All pilots have involved the Government working with private and voluntary sector partners to pilot schemes to enhance the NDLP through training and other

265 A training course is provided followed by a 6-month "test trading" period where individuals can remain on Income Support and receive help with childcare costs. For more information see:

HM Treasury, Budget 2001 – investing for the long term: building opportunity and prosperity for all, March 2001, HC 279 2000/01, p62

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support.266 The first pilots began in spring 1999 and include mentoring, work experience and training. In October 2004 a range of new pilots, as part of the NDLP, were formally introduced. These included:267

• Extended Schools Childcare – In partnership with Sure Start lone parents are offered quality childcare based around schools that is fully vetted and affordable. In April 2004 pilots were launched in Lewisham, Haringey and Bradford and are now being expanded to include Leicester; Leicestershire; Sandwell in the West Midlands; Greenwich (in London); Aberdeenshire; Fife and Torfaen (in Wales). Extended Schools Childcare is designed to meet local needs and in most cases is available throughout the year (minimum 48 weeks a year) covering full daytime working hours, e.g. 8am to 6pm Monday to Friday. It is accessible for all local families, but the emphasis will be on helping lone parents. The aim is to ensure that if a job is available then so is registered childcare.

• Work Search Premium – This provides £20 extra a week to lone parents who

have been on income support for more than a year, are on the NDLP, and who are actively searching for a job. The aim is to ensure lone parents are not put off searching for work by the potential costs involved. The pilots launched are in Bradford; Dudley and Sandwell in the West Midlands; Lancashire West; Leicester; Leicestershire; South East London; Edinburgh, Lothians and Borders; and Cardiff and Vale. To qualify for the Work Search Premium lone parents must have been in receipt of a qualifying benefit for 52 weeks and have joined the NDLP. The lone parent is required to complete an action plan and agree to follow a work search regime focused on the activities they will undertake to look for full time work of over 16 hours a week. They are also required to attend fortnightly meetings with their personal adviser.

• In-Work Credit – gives £40 a week for the first year of a new job to lone parents

who have been on income support or jobseeker’s allowance for 12 months or more. It aims to help lone parents leave benefits for full-time employment, ensuring work pays. It was introduced in April 2004 in the three extended schools childcare areas of Bradford, North London and South East London and since October 2004 has been also available in Dudley and Sandwell; Lancashire West; Leeds; Leicestershire; Staffordshire; West London; Edinburgh, Lothians and Borders; Central London; and Cardiff and Vale. From October 2005 the In-Work Credit will be extended to include the following six districts: Surrey and Sussex; Essex; Kent; Berkshire, Buckinghamshire and Oxfordshire; Bedfordshire and Hertfordshire; and Hampshire and the Isle of Wight. The In-Work Credit is payable to lone parents who have been in receipt of a qualifying benefit, have

266 DfEE, Departmental Report – the Government’s Expenditure Plans 1999-00 to 2001-02, Cm 4202, March

1999, p 129 267 DWP Press Release, “New Deal for Lone Parents sixth birthday – more lone parents in work than ever

before”, 25 October 2004

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been on the NDLP, and who are starting work of at least 16 hours a week. The employment must be expected to last a minimum of five weeks.

• Childcare Tasters – These were introduced in Bradford, Haringey and Lewisham

in April 2004 enabling lone parents to sample childcare and talk to a childcare co-ordinator. Since October 2004 they have been available in Birmingham; Leeds; Leicester; Leicestershire; Liverpool; Rochdale; Sandwell; Greenwich; Aberdeenshire; Fife; and Torfaen.

• In Work Emergencies Fund – This helps lone parents meet costs during the first

two months of a job. This is currently available in London; Liverpool, Leeds/Bradford; Manchester; Birmingham; and Glasgow. The In Work Emergencies Fund is available to lone parents who are working at least 16 hours a week and have been in work for 60 days or less and would have been on the NDLP or continuously claiming benefits for 26 weeks or more.

• The 2004 Pre-Budget report announced new pilots, led by Regional Development

Agencies, to break down the barriers to mothers returning to work. The London Development Agency began piloting two support packages in June 2005 across six London boroughs. These pilots offer integrated programmes of support to provide women wishing to return to work with advice on career options, access to training, work placements and good quality affordable childcare. The pilots also utilise strong links with local employers to ensure that the particular needs and advantages of returning women are recognised.

b. New Job Grant

In addition to these pilots a new Job Grant was introduced nationally in October 2004. This provides £250 to all lone parents and couples with children and £100 to single people and couples without children to help with the transition into work. It supersedes the former Job Grant and replaces the Lone Parent Run-on.268 To qualify for the new Job Grant people will have to be starting work of at least 16 hours a week (24 hours a week for partners) with the employment expected to last a minimum of five weeks. They will also need to have been in receipt of a qualifying benefit continuously for 26 weeks. c. Extension of WFIs

Since September 2004 parents in ‘workless’ households269 who have been on certain benefits for more than a year and whose youngest child is aged 12 or over, have been required to attend quarterly work-focused interviews. Furthermore, since October 2004

268 Up to October 2004, the Lone Parents Run-On enabled lone parents moving into full-time work to receive

2 weeks extended Income Support if they have been unemployed and in receipt of Income Support or income-based Job Seekers Allowance for at least 6 months. A condition of this was that the lone parent expected to remain in employment for at least 5 weeks. If they did not, benefits were not paid for the first two weeks after employment finished.

269 Workless households are households with at least one person of working age that contains no adults in employment.

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lone parents have been required to complete a compulsory action plan when attending their regular work-focused interviews. It is planned that from October 2005, lone parents will be required to attend an interview once every three months when their youngest child is aged 14 or over to help them prepare for the transition to work or JSA once their child reached the age of 16.270 d. Pathways to Work for Lone Parents

These new pilots, announced in the DWP’s Five Year Strategy, bring together extra support and childcare help with added financial incentives to look for and move into work. The new measures will ensure guarantees about childcare support and the ongoing help of professional job advisers, in return for a commitment to search for and take up the offer of work. The package being piloted includes the NDLP, existing pilots (Extended School Childcare, In-Work Credit and Work Search Premium) and an additional payment of £20, on top of existing benefits, for lone parents with children at secondary school, in return for taking steps to find work. The pilots commenced in five areas in April 2004: Leicestershire; Dudley and Sandwell; Bradford; South East London; and North London. 6. NDLP expenditure

The table below shows expenditure by the DWP on the NDLP:

Expenditure on the NDLP£ million

Administrative Expenditure

Programme Expenditure

Total Expenditure

1998/99 17 1 181999/00 27 12 392000/01 29 14 432001/02 37 9 462002/03 44 18 622003/04(a) 47 19 662004/05(b) 68 27 952005/06(b) 65 26 91

Notes: All figures rounded to nearest £ million. Following agreement with HM Treasury to remove the ‘ring fences’ from individual New Deals, New Deal administrative expenditure is no longer accounted for separately. Figures for 2002–03 and later years are estimates.(a) Estimated expenditure(b) Planned expenditure

Source: DWP, Departmental Report, 2004

270 DWP, Departmental Report 2004, p33, 2004

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7. NDLP Statistics

Statistics on the NDLP covering Great Britain are published in quarterly statistical first releases.271 Figures published to the end of March 2005 show: 272 • •

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Since October 1998, 1,000,307 lone parents have attended an initial interview. 81% of those interviewed have, so far, agreed to participate. People with disabilities and those from ethnic minority groups are just as likely to agree to participate. 382,740 lone parents had found employment through the NDLP since October 1998. This constitutes 38% of all those who attended an initial interview. 96% of lone parents who had gained employment through the NDLP have now left the programme; the remainder continued to receive in-work support on the NDLP. 47,500 lone parents have taken up education or training opportunities whilst on the NDLP. Of the 71,830 lone parents participating in the NDLP at the end of March 2005, 94% are female, 5% are people with disabilities, and 22% are aged under 25. At least 10% are from minority ethnic groups although ethnic group is only recorded for 95% of clients. 741,240 lone parents have left the NDLP (74% of those who attended an initial interview) by the end of March. Of these leavers, 50% (368,970) left for employment, less than 1% (4,490) transferred to other benefits, 31% (229,840) withdrew for other reasons but remained on Income Support, and 18% (131,140) left for unknown destinations.

8. Evaluation

Press coverage towards the NDLP has been broadly positive since its launch, with the programme being singled out as one of the more successful New Deal programmes, particularly since lone parent unemployment rates have surpassed 50%:273

[…] the New Deal for Lone Parents has found more than 250,000 jobs - pushing the lone parent employment rate above 50 per cent for the first time in living memory.

An article in the Centre for Economic and Social Inclusion’s Working Brief compared employment policies for lone parents in the UK and US. This found that:274

US programmes have been much more successful in moving lone parents off welfare and into work. Many local programmes have provided a greater diversity of training options, have invested more heavily in childcare and have worked with public transport providers to restructure public transport so it reflects the changing times and places people work.

271 See: http://www.dwp.gov.uk/asd/ndlp.asp 272 DWP, New Deal for Lone Parents: statistics to June 2004, June 2004 273 “Jobs-for-all labyrinth contains trains and triumphs”, Financial Times, 28 July 2004, p4 274 “A better deal for lone parents”, Working Brief, February 2002

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In contrast, through its voluntary approach here NDLP has pioneered a one-to-one system of helping lone parents into work and provides a much more integrated pre and post employment support system than the US. This emphasis means that whilst the US is more effective at moving lone parents into work, the UK is more successful in lifting lone parents families out of poverty through employment. Combining elements from these two approaches could enable both of these objectives to be achieved, providing a better deal for lone parents in both the US and the UK.

An external evaluation of the NDLP in June 2003 suggested that the current programme is successfully fulfilling its aim of:275

[…] helping and encouraging lone parents to improve their prospects and living standards by taking up or increasing hours of paid work and of improving their job readiness to increase their employment opportunities.

The report also noted that:276

[…] the NDLP is cost-effective and interim analysis suggests an economic gain to society of £4,400 per additional job [equivalent to £115 million per year] and a net exchequer saving of just under £1,600 per additional job [equivalent to over £40 million per year] and a substantial social benefit.

Finally, the report identified that the key factors in the effectiveness of the NDLP were:277

[…] the highly motivated and committed Personal Advisers (PAs); a high level of PA autonomy and flexibility to tailor services to clients’ needs and caseload management skills.

A DWP study in 2004 investigated the effectiveness of WFIs for lone parents. It found that lone parent work-focused interviews have substantially increased the numbers of lone parents participating in NDLP. Around 209,000 lone parents have joined NDLP following a work-focused interview, and of these, 88,000 have moved into work.278 Finally, a Conservative Party policy document published prior to the 2005 General Election stated that a Conservative government would abolish all New Deal programmes.279 The Conservatives proposed that the New Deal would be replaced by a system of private-sector led Employment Zones, similar to those currently being piloted in 13 areas across the UK.280 David Willetts, the then Shadow Work and Pensions Secretary, added that research showed “barely a third of all people put through the

275 Evans et al., New Deal for Lone Parents: Second Synthesis Report of the National Evaluation Centre for

Alanysis of Social Policy, June 2003, p21 276 ibid. p16 277 ibid. p70 278 Insite Consulting, Integrated findings from the Evaluation of the first 18 months of Lone Parents Work

Focused Interviews, March 2004 279 Conservative Party, Better Public Services, Better Value, Conservative Spending Plans, 2005-2008,

http://www.conservatives.com/tile.do?def=policy.listing.page 280 “Tories set out plan to privatise Jobcentres”, Financial Times, 7 October 2004, p4

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programme found a job lasting three months or longer … The New Deal is not a route off welfare, it is a revolving door back on to it”.281 9. Further reading

1. Holland, J., Evaluation of the Extension to NDLP Eligibility, October 2004 2. Insite Consulting, Integrated findings from the Evaluation of the first 18 months of

Lone Parents Work Focused Interviews, March 2004 3. Somerville, W., “New Deal for Lone Parents”, Welfare to Work Handbook, Chapter

22, pp291-300 second edition, 2004 4. Phillips, M., New deal for lone parents evaluation, DWP, March 2003 5. Evans et al., New Deal for Lone Parents: Second Synthesis Report of the National

Evaluation Centre for Alanysis of Social Policy, DWP and Bath University, June 2003.

6. “Evaluating New Deal for Lone Parents”, Working Brief, October 2000 7. Hasluck, C., The New Deal for Lone Parents - a review of evaluation evidence: a

summary of evidence from the monitoring and evaluation of NDLP, Institute for Employment Research, Employment Service Research and Development Report (ESR) ESR 51, June 2000

8. David Willetts MP and Nicholas Hillman, A Raw Deal for Lone Parents, Centre for

Policy Studies, June 2000 9. Hamblin, M., A Report on lone parent client satisfaction survey: part of evaluation of

New Deal for Lone Parents Phase 3, ESR 39, February 2000 10. Hales et al, Evaluation of the New Deal for Lone Parents: early lessons from the

phase one prototype – findings of surveys, DSS Research Report 109, January 2000 11. Finch et al., A further look at the evaluation of NDLP phase one data: focus on

childcare, DSS In-house Report 68, January 2000 12. Green, A., Evaluation of the New Deal for Lone Parents: a comparative analysis of

the local study areas, DSS In-house Report 63, January 2000 13. Finch et al, New Deal for Lone Parents: learning from prototype areas, DSS

Research Report 92, May 1999 14. Woodfield et al., New Deal for lone parents: evaluation of innovative schemes, DSS

Research Report 89, April 1999

281 “Chancellor defends Welfare to Work”, Financial Times, 8 April 2005, p2

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15. Hales et al, Evaluation of the New Deal for Lone Parents: a preliminary assessment

of the ‘counterfactual’, DSS In-house Report 42, May 1998 16. Education and Employment Committee, Pathways into work for lone parents, 28 July

1998, HC 646 1997-98

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III List of abbreviations DfEE Department for Education and Employment DfES Department for Education and Skills DSS Department of Social Security DTI Department of Trade and Industry DWP Department for Work and Pensions EC Employment Credit ERA Employment Retention and Advancement ETF Environment Task Force ETO Employment and Training Option ETP Employer Training Pilot HIE Highlands and Islands Enterprise IAG Information Advice and Guidance JSA Jobseeker’s Allowance LLSC Local Learning and Skills Council LOT Longer Occupational Training LSC Learning and Skills Council NAO National Audit Office ND25+ New Deal for 25 Plus ND50+ New Deal for 50 Plus NDDP New Deal for Disabled People NDLP New Deal for Lone Parents NDP New Deal for Partners NDPA New Deal Personal Adviser NDYP New Deal for Young People

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NEP National Employment Panel NETP National Employer Training Programme NIACE National Institute for Adults Continuing Education NIESR National Institute for Economic and Social Research NVQ National Vocational Qualification OECD Organisation for Economic Co-operation and Development PSA Public Sector Agreement QCA Qualifications and Curriculum Authority RSP Regional Skills Partnerships SEnt Scottish Enterprise SIBS Short Intensive Basic Skills SSC Sector Skills Council SSDA Sector Skills Development Agency SVQ Scottish Vocational Qualification TEC Training and Enterprise Council TIS Travel to Interview Scheme VS Voluntary Sector Option WBLA Work Based Learning for Adults WFI Work Focused Interview WTC Working Tax Credit