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Welfare Reform on the Web (March 2012): Social security - UK - welfare to work

Boom or bust: can a market free-for-all deliver jobs for personal budget holders?

H. Davies

Community Living, vol. 25, no.2, 2011, p. 18-19

The personal budgets allocated to disabled people of working age may include a sum for the purchase of employment support. It is acknowledged that employment support costs 8,000 per successful outcome on average, but the personal budget holders receive nowhere near this figure. Employment services providers are responding by competing on the basis of price rather than quality and provision is fragmenting. The author calls for intensive support and guidance for commissioners of employment support services, an incentivising of job outcomes, the realistic costing of quality support services, performance monitoring, and a single interface between the customer and funders.

Can the youth contract unlock young people's potential?

N. Puffett

Children and Young People Now, Jan. 10th-23rd 2012, p. 12-13

With youth unemployment rising to record levels, attempts to tackle the issue formed a key plank of the Government's 2011 Autumn Statement stimulus package. The 1bn Youth Contract will include moves to get more young people into work experience, jobs and apprenticeships through incentives for employers, with additional support for the most vulnerable 16- and 17-year-olds. This article presents a critique of the scheme.

Cash reward for putting young jobless into work

J. Kirkup

Daily Telegraph, February 21st, 2012, p. 1

In a speech in East London deputy prime minister Nick Clegg set out details of 126m in funding to pay for companies and charities to work with young people not in education, employment or training, offering them services and support such as skills training and interview practice.. They would be paid up to 2,200 for every jobless youth placed in employment or training. The scheme would be the first to use 'payment by results' contracts for under-18s.

MPs challenge track record of welfare-to-work company

A. Gentleman

The Guardian, Feb 10th 2012, p. 9

The record of welfare-to-work company A4e came under scrutiny from MPs, as they questioned why a company with an 'abysmal' record of delivering government programmes had been awarded new contracts to provide the coalition's Work Programme when it launched in Summer 2011. Details of large dividends received by Emma Harrison, A4e's chair, also emerged during questioning of the company's chief executive officer, Andrew Dutton. He confirmed that all of its UK turnover last year, estimated at between 160m and 180m, derived from government contracts, and of the 11m paid in dividends to the company's five shareholders, 87% went to Harrison. The committee's chair, Margaret Hodge, the Labour MP for Barking, asked civil servants why welfare-to-work companies with a poor track record of fulfilling previous contracts had been given new work.

(See also The Guardian, Feb. 21st 2012, p. 6; The Guardian, Feb. 23rd 2012, p. 1 and p. 6; The Guardian, Feb. 24th 2012, p. 1)

The introduction of the Work Programme

National Audit Office

London: TSO, 2012 (House of Commons papers, session 2010/12; HC 1701)

In 2011, the Work Programme replaced virtually all welfare to work programmes run by the Department for Work and Pensions (the Department) in England, Scotland and Wales. It offers support to unemployed people who have been claiming Jobseeker's Allowance or Employment Support Allowance to help them get, and keep, jobs. This report assesses how the Department managed risks to value for money in introducing the Work Programme using an evaluative framework. It is too early to fully assess the Work Programme as there is not yet reliable data on how successful it is in getting people into work. However, the report identifies risks that the Department will need to manage well if value for money is to be achieved. The Department and providers have made assumptions about how many people the Programme will get back into work but there is a significant risk that they are over-optimistic. There is also an increased risk of fraud and error going undetected. The Department needs to ensure that the providers do not cut corners to stay in profit, such as targeting easy to reach people, reducing service levels or treating sub-contractors unfairly.

PAYE, tax credit debt and cost reduction

Committee of Public Accounts

London: TSO, 2011 (House of Commons papers, session 2010/12; HC 1565)

The report details the huge challenge facing HM Revenue & Customs (the Department) to resolve longstanding problems with the administration of PAYE (Pay As You Earn) and tax credits, while making substantial reductions to its running costs. The Department needs to stabilise its administration of PAYE following the problems encountered after a new processing system was introduced in 2009. It also needs to recover a significant amount of outstanding tax credit debt while minimising the amount of new debt being accumulated. While an extra 900 million has been allocated to tackle tax avoidance, at the same time, following the 2010 Spending Review, the Department is required to reduce its running costs by 1.6 billion over the next four years. The Department has made progress in improving PAYE administration since the Committee's last examination of this area in 2010. However, as a consequence of the Department's handling of the 2009 transition to the new PAYE Service, it has had to forgo up to 1.2 billion of income tax underpaid from 2004-05 to 2009-10. Under current plans, it will take until 2013 before all processing backlogs are cleared and the new PAYE Service is operating as intended. The Department needs to focus on improving data quality in particular to sustain progress in PAYE administration. Without a clear plan for reducing tax credit debt, the level of uncollected debt will continue to rise to an estimated 7.4 billion by 2014-15. The Department has been forced to acknowledge that much of this debt will never be recovered from tax credit claimants, and recently wrote off some 1.1 billion of debt dating back to the introduction of the scheme.

Sick and disabled people could be forced to work for nothing

S. Malik

The Guardian, Feb. 17th 2012, p. 1

Some long-term sick and disabled people faced being forced to work unpaid for an unlimited amount of time or have their benefits cut under plans being drawn up by the Department for Work and Pensions. Mental health professionals and charities said they feared those deemed fit to undertake limited amounts of work under a controversial assessment process could suffer further harm to their health if the plans went ahead. The new policy, outlined by DWP officials in meetings with disabilities groups, was due to be announced after legal changes contained in clause 54 of the Welfare Reform Bill had made their way through Parliament. The policy could mean that those on Employment and Support Allowance who had been placed in the work-related activity group (Wrag) could be compelled to undertake work experience for charities, public bodies and high-street retailers. The Wrag group included those who had been diagnosed with terminal cancer but had more than six months to live; accident and stroke victims; and some of those with mental health issues.

Tesco pays up in row over jobseeker project

S. Malik and P. Wintour

The Guardian, Feb. 22nd 2012, p. 6

Tesco offered paid placements with a guarantee of a job to all those people it took on for work experience through a government scheme, after claims that it was using benefit claimants as unpaid labour led to a consumer backlash and in-store protests. Tesco said the 1,500 unemployed people on jobcentre work experience schemes referred to the company over six months would be given a choice of staying on benefits and completing the placement unpaid, or accepting a four-week paid placement with a guaranteed offer of a job at the end if the trial went well. The move came as Superdrug and the electronics retailer Maplin, along with the mental health charity Mind, said they were withdrawing from the work experience programme and similar schemes. A Tesco supermarket in central London was forced to close after it was invaded by members of the Right to Work campaign protesting against a job advert looking for permanent workers in exchange for expenses and jobseeker's allowance only.

(See also The Guardian, Feb. 27th 2012, p. 4; The Guardian, Feb. 29th 2012, p. 6)

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