Press Story

Think-tank outlines cost-neutral plan to help more people off long-term benefits and into lasting work

Current system too fragmented and lacks the funding needed for better results – more effective support would be better for both the jobseeker and the taxpayer
By setting up companies able to “invest-to-save”, Mayors or councils could fund programmes to get people into work from the future savings they will generate by being in work - off-benefits and paying tax
Devolution of Work Programme to Mayors or councils will enable joint investment and local innovation, which would mean better success rates
£9,000 per claimant or more could be unlocked – which should then be reinvested in better support, such as paid work placements or better training.

Devolving the government’s Work Programme could boost employment by freeing up funding for proven and innovative ways of getting people into work, says leading think-tank IPPR North.

“Welfare Earnback” sets out how some of the toughest challenges could be solved by the public sector investing together, to get people off benefits and into decent employment.

The current Work Programme, run centrally by the Department for Work and Pensions, is not joined up and lacks the funding it needs to help the most vulnerable into work, the report warns.

From 2017, the replacement “Work and Health Programme” will be run jointly with some major cities such as Manchester and Sheffield.

But to make this new programme work for the hardest to help, IPPR North argues that under the Department for Work and Pensions’ (DWP) new scheme, mayors should be able to create new companies which bring together the public sector and target support based on what each claimant needs and what local employers want. Where there is no mayor, a local authority leader or leaders could bring the public sector together.

The report says they will need new tools to do this effectively. For instance, they should be able to set up paid job placements to build up jobseekers’ CVs - these are not currently offered by central government but evidence shows can be effective.

Luke Raikes, research fellow at IPPR North and co-author of the report, said:

“Today’s set-up for helping people into work is bad for jobseekers, bad for taxpayers, and bad for the public sector.

“It lacks the investment and innovation that’s required, and this failure often ends up costing taxpayers more.

“Devolution is a unique opportunity to bring the public sector together, to invest in the support and capture the savings that result.

“What counts is what works, and Mayor or council –led companies should be free to invest in whatever support people need if it’s proven to save money – this includes ‘job guarantees’ which can be highly effective but aren’t currently an option.

“The Department for Work and Pensions should seriously explore this invest-to-save approach when they replace the current Work Programme with the Work and Health Programme.”

“Investing-to-save” – i.e. bringing forward the money saved from someone not being on benefits, and spending this saving upfront to get them into work – would be good for both the person looking for work and good for public services, the report finds. For instance:

The tax-benefit saving for a moving a single man living in council tax band C private rented sector housing in Sheffield from long-term JSA into a minimum wage job for 30 hours a week is £8,600 per year.
The annual tax-benefit saving for moving a single woman on employment and support allowance, living in council tax band C private rented sector housing in Southwark, who moves into a job paid at £8.25 per hour, is £9,000 for a 20-hour week.

For the people left behind by the current system, this new approach could mean a sustained job and a secure income.

ends

Contact:

Ash Singleton, a.singleton@ippr.org, 07887 422 789

Sarah Horner, s.horner@ippr.org, 07584 604 607

Notes to editors:

The report, Welfare Earnback: an Invest to Save Approach to designing the new Work and Health Programme, is available here: http://www.ippr.org/publications/welfare-earnback

In 2017, voters in Greater Manchester, the Sheffield City Region, Liverpool City Region, Tees Valley, the North East and the West Midlands will head to the polls to elect new ‘Metro Mayors’, who will join newly-elected London Mayor Sadiq Khan to form a new cadre of powerful city leaders.