House of Commons Welsh Affairs Committee
The Work Programme in Wales
Third Report of Session 2013–14
Volume I: Report, together with formal minutes, oral and written evidence
Additional written evidence is contained in Volume II, available on the Committee website at www.parliament.uk/welshcom
Ordered by the House of Commons to be printed 22 October 2013
HC 264 Incorporating HC 999-i, Session 2012-13 Published on 4 November 2013 by authority of the House of Commons London: The Stationery Office Limited £15.50
The Welsh Affairs Committee
The Welsh Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Office of the Secretary of State for Wales (including relations with the National Assembly for Wales).
Current membership David T.C. Davies MP (Conservative, Monmouth) (Chair) Guto Bebb MP (Conservative, Aberconwy) Geraint Davies MP (Labour, Swansea West) Glyn Davies MP (Conservative, Montgomeryshire) Stephen Doughty MP (Labour, Cardiff South and Penarth) Jonathan Edwards MP (Plaid Cymru, Carmarthen East and Dinefwr) Nia Griffith MP (Labour, Llanelli) Simon Hart MP (Conservative, Carmarthen West and South Pembrokeshire) Mrs Siân C. James MP (Labour, Swansea East) Karen Lumley MP (Conservative, Redditch) Jessica Morden MP (Labour, Newport East) Mr Mark Williams MP (Liberal Democrat, Ceredigion)
The following Members were also members of the Committee during this Parliament
Stuart Andrews MP (Conservative, Pudsey) Alun Cairns MP (Conservative, Vale of Glamorgan) Susan Elan Jones MP (Labour, Clwyd South) Owen Smith MP (Labour, Pontypridd) Robin Walker MP (Conservative, Worcester)
Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk
Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at TU TU TU TU TU www.parliament.uk/welshcomTU UUUUUU T T T T T T
The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in printed volumes.
Additional written evidence may be published on the internet only.
Committee staff The current staff of the Committee is Marek Kubala (Clerk), Anwen Rees (Committee Specialist), Alison Mara (Senior Committee Assistant), Baris Tufekci (Committee Assistant), and Jessica Bridges-Palmer (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Welsh Affairs Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 3264; and the Committee’s email address is [email protected]
The Work Programme in Wales 1
Contents
Report T T T T T PageT
SummaryB 3
1 IntroductionB 5 TheB Work Programme 5 PrimeB providers and subcontractors 5 TheB payment model 6 OurB inquiry 6 DevolvedB responsibilities 7
2 WorkB Programme performance in Wales 8 FindingB sustained employment 8 NumberB of people entering work 10 RegionalB variations within Wales 11 Employment rates in Wales 13 MinimumB performance levels 13 WhyB is the Work Programme performing less well in Wales? 14
3 SupportingB different groups in society 16 JobB outcomes for different claimants groups in Wales 16 HelpingB those furthest from the labour market 17 LoneB parents 19
4 CompatibilityB with Welsh Government and EU funded schemes 21
5 EmployerB engagement 24
6 Post-WorkB Programme support 26 MandatoryB Intervention Regime 26 IsB two years long enough? 27
ConclusionsB and recommendations 28
AnnexB A: The differential payment model 30
AnnexB B: Performance by providers 31
AnnexB C: Jobs Growth Wales statistics 33
FormalB Minutes 34
WitnessesB 35
ListB of printed written evidence 35
2 The Work Programme in Wales
ListB of additional written evidence 35
ListB of Reports from the Committee during the current Parliament 37
The Work Programme in Wales 3
B B B B B SummaryB
The Work Programme is the latest government-contracted employment programme, which aims to support long-term jobseekers into work and off unemployment benefits. Launched in June 2011, the Work Programme replaced a number of previous welfare-to- work programmes and consolidates employment support for a very wide range of jobseekers into a single mainstream programme. Providers, who are predominantly commercial companies, provide support to participants, for example with building CVs, interview techniques, confidence-building, mentoring, work experience and skills training, and receive payments for finding participants sustained employment (usually defined as 13 or 26 weeks).
Our key conclusions and recommendations are:
• One in nine people in Wales who joined the Work Programme in its first two years found sustained employment. Although this is not greatly dissimilar to the Great Britain average, we are concerned that the proportion of jobseekers who secure sustained employment through the Work Programme in Wales is the lowest in Great Britain.
• We are broadly encouraged that the Work Programme’s performance has been improving over time, both in Wales and Great Britain. We note, however, that performance in Wales has fallen behind the Great Britain average for the most recent cohorts to have completed one year on the programme.
• The Work Programme was designed to be an improvement on previous welfare-to- work schemes by incentivising providers to support jobseekers with the most severe barriers to employment. This is a worthy ambition, and a significant challenge, but the programme’s success in this respect is yet to be proven.
• We recommend that the Department for Work and Pensions review whether there are means better to incentivise providers to support jobseekers with the most severe barriers to employment, including Employment and Support Allowance claimants. This should include a review of the differentiated pricing structure.
• We are concerned that lone parents in Wales are struggling to find sustained employment through the Work Programme compared to other parts of Great Britain. The two providers in Wales, Working Links Wales and Rehab Jobfit, must ensure that both they and their subcontractors have specific measures in place to support lone parents into work.
• The restriction in Wales on Work Programme participants being able to access European Social Fund training and skills courses is detrimental to the performance of the Work Programme in Wales and, ultimately, for the opportunities available to the long-term unemployed.
• We urge the Department for Work and Pensions and the Welsh Government to resolve the current situation where Work Programme participants in Wales are unable to
4 The Work Programme in Wales
access the full range of training courses available to them, unlike in England. This should be achieved by February 2014.
• We urge the Department for Work and Pensions to enable participants to exit the Work Programme if required in order to access Jobs Growth Wales.
In this report, conclusions are printed in bold and recommendations are printed in bold italics.
The Work Programme in Wales 5
1 B B B B B IntroductionB
B B B B B TheB Work Programme
1. The Work Programme is the latest government-contracted employment programme, which aims to support long-term jobseekers into work and off unemployment benefits. Launched in June 2011, the Work Programme replaced a number of previous welfare-to-work programmes, including the remaining New Deals for young people, the Flexible New Deal, and Pathways to Work, the previous scheme for Incapacity Benefits (IB) claimants. It therefore consolidates employment support for a very wide range of jobseekers, including many with health problems and disabilities, into a single mainstream programme.
2. Most jobseekers are referred onto the Work Programme if they remain unemployed and on benefit after receiving the support offered to them through Jobcentre Plus (JCP) for between 1 three to 12 months (depending on the benefit type).P P P P P P ReferralPPPPPP is mandatory for Jobseekers Allowance (JSA) claimants and some Employment and Support Allowance (ESA) claimants considered capable of work-related activity.
B B B B B PrimeB providers and subcontractors
3. Jobseekers are attached to externally contracted Work Programme providers for a period of two years. Providers are predominantly commercial companies and take responsibility for offering the support long-term jobseekers require, which might include help with building CVs, interview techniques, confidence-building, mentoring, work experience and skills training. Participants remain on unemployment benefits until they find work and can be referred by the provider to JobCentre Plus for sanctioning if they do not comply with certain conditions, such as attendance at meetings with their Work Programme adviser or training courses. There are 18 prime providers delivering 40 separate contracts in 18 regional Contract Package Areas (CPAs) across Great Britain.
4. Prime providers were encouraged by DWP to deliver services through supply chains of subcontractors from the private, public and voluntary sectors, including niche providers with experience of supporting jobseekers with more complex barriers to employment. Most prime providers deliver services through subcontractors to some degree, though some of the largest deliver “end-to-end” services in-house.
5. The Work Programme is designed to allow providers greater freedom to choose how best to support unemployed people, without prescription from government—an extension of the so- called “black box” approach.
6. In Wales (‘CPA 13’) the DWP has awarded the Work Programme contract to two prime providers: Working Links and Rehab Jobfit. They employ 73 subcontractors, almost half from the voluntary and community sectors.
1 There are some exceptions. For example, prison leavers claiming JSA are referred to the Work Programme from the very start of their benefit claim.
6 The Work Programme in Wales
B B B B B TheB payment model
7. The Work Programme has an innovative differential pricing model in which providers can claim higher payments for placing jobseekers into sustained work, according to the payment group they are in. There are eight payment groups in Wales (nine in England), based largely on benefit type being claimed. Providers receive higher payments for supporting participants who are deemed to have the most complex barriers, such as ESA ex-IB benefit claimants. The payment groups, and maximum payments available to providers, are set out in Annex A.
8. Providers receive payments in three main ways:
i. Attachment fee: an initial payment made when contact is first made between Work Programme provider and participant;
ii. Job outcome fee: a larger payment made when the participant finds work, comes off unemployment benefit and remains in work for 13 or 26 weeks, depending on the 2 payment groupP FP FP FP FP FP F (thisPPPPPP does not have to be in the same job or for a continuous period; job outcomes are defined as 13 or 26 weeks employment within a two year period); and
iii. Sustainment fee: a monthly payment to providers for up to 80 subsequent weeks as long 3 as the participant stays in work and off benefit.P FP FP FP FP FP F
B B B B B OurB inquiry
4 9. We announced our inquiry into the Work Programme in Wales in November 2012,P F F FP P P FP F FP ttt thePPPPPP 5 second of two inquiries into the impact of welfare reform in Wales.P FP FP FP FP F P F PPPPPP We received 16 submissions of written evidence and took oral evidence from Work Programme providers and subcontractors operating in Wales, charities, and Mr Mark Hoban MP, the then Minister of Employment in the Department for Work and Pensions. We made a highly useful visit to a Work Programme centre in Pontypridd, run by Working Links. We are grateful to all who contributed to our inquiry and facilitated our visit.
10. Since its launch in June 2011, the Work Programme has been the subject of scrutiny of other select committees in the House of Commons. In February 2013 the Public Accounts Committee 6 published a Report on Department for Work and Pensions: Work Programme outcome statisticsP P P .P P P F F F F F F This focussed on the first set of published statistics about the Work Programme.
11. The Work and Pensions Committee has published two major reports on the Work Programme. The most recent, Can the Work Programme work for all user groups?, was published
2 The job outcome fee is triggered at 13 weeks for ESA, ex-IB and more difficult JSA cases. Monthly sustainment fees are paid for longer (up to 80 weeks) in relation to participants in those categories. 3 Providers may also receive incentive payments for jobs delivered beyond a certain level, set at the estimated intervention plus 30% (i.e. 1.3 times the estimated level of non-intervention). Incentive payments apply to the same groups as the minimum performance levels (MPLs): namely JSA 18–24, JSA 25+, and new ESA claimants (see paragraphs 26-28). 4 Our terms of reference were to examine: the development of the Work Programme in Wales and its payment-by results model for contractors; the impact of the new payment model on welfare-to-work contractors, and whether there is effective collaboration between Work Programme providers; whether jobseekers on the scheme are able to access the full range of services they require; and whether the scheme is embedded in local areas and responsive to the needs of different communities. 5 The first is the Second Report of Session 2013-14, The impact of changes to housing benefit in Wales, HC 159.
6 Public Accounts Committee, Thirty-third Report of Session 2012–13, HC 936
The Work Programme in Wales 7
7 in May 2013.P FP FP FP FP FP F WePPPPPP refer to some of the Work and Pensions Committee’s findings in this Report. We do not seek to duplicate the comprehensive work of the Work and Pensions Committee. This Report focuses on the performance of the Work Programme in Wales and on specific issues relevant to Wales.
B B B B B DevolvedB responsibilities
12. In Wales employment and welfare benefits are non-devolved policy areas which are the responsibility of the UK Government. The Welsh Government is responsible for skills policy in Wales and provides a range of support, including pre-employment assistance, for individuals 8 seeking employment.P FP FP FP FP FP F
7 Work and Pensions Committee, First Report of Session 2013-14, HC 162
8 Ev 58
8 The Work Programme in Wales
2 B B B B B WorkB Programme performance in Wales
13. In this Chapter, we explore the performance of the Work Programme in Wales, compared to other parts of Great Britain.
14. Statistics about the Work Programme are periodically released by the Department for Work and Pensions (DWP). To date, the Department has released three sets of statistics since the 9 programme’s launch in June 2011. The most recent set of data covers the period to June 2013,P P P P P F F F F meaning data is available for the first two years of the Work Programme’s operation. The DWP has divided the data into year one (June 2011-March 2012) and year two (April 2012-March 2013), and the data for April to June 2013 constitutes the first three months of year three.
15. The DWP’s statistics show that, in general, the performance of the Work Programme in Wales is slightly below the Great Britain average. In some respects, the Work Programme has performed less well in Wales than most other contract package areas (CPA) in Great Britain. We examine some of the specific trends below.
B B B B B FindingB sustained employment
16. The success of the Work Programme will ultimately be judged by the number of long-term unemployed people for whom the programme helps secure sustained work (that is, 13 or 26 weeks). The DWP categorises this as a “job outcome” and it is by this measure that prime providers receive a job outcome payment.
17. In Wales 69,590 people were referred by Jobcentre Plus onto the Work Programme during its first 25 months (compared to 1.3 million in Great Britain). Of these, 7,550 people completed 13 or 26 weeks of sustained employment during that period which equates to 10.8% of those 10 referred onto the Programme.P FP FP FP FP FP F
18. Table 1 shows the performance of the Work Programme in each of the 18 CPAs. It shows that Wales’s job outcomes to referral rate of 10.8% is the lowest of any CPA. The next lowest is the ‘North East Yorkshire and the Humber’ CPA with a rate of 11.2%. The Work Programme is performing best in the ‘Surrey, Sussex, Kent’ CPA, where 14.8% of people referred onto the Work Programme found sustained work. The proportion in Scotland is 12.4% and the Great Britain average is 12.8%.
9 The first set (released in November 2012) covered the period June 2011 to July 2012. The second (released in June 2013) covered the period up to March 2013. The third (released in September 2013) covered the period up to June 2013. 10 Including only those participants who have been on the Work Programme for the minimum length of time necessary to attain a job outcome, the proportion of referrals to outcomes was 12.5%. This compares to the Great Britain average of 14.7%. Department for Work and Pensions Tabulation Tool.
The Work Programme in Wales 9
Table 1: Performance of the Work Programme by contract package area, June 2011 to June 2013
Proportion of job Job outcome outcomes to Referrals payments referrals Great Britain 1,310,720 168,420 12.8% Surrey, Sussex & Kent 64,520 9,530 14.8% East of England 92,380 13,410 14.5% Coventry, Warwickshire, Staffordshire and the Marches 50,250 7,140 14.2% Manchester, Cheshire and Warrington 89,320 12,400 13.9% Thames Valley, Hampshire and Isle of Wight 53,370 7,360 13.8% West London 81,590 10,890 13.3% East Midlands 94,020 12,320 13.1% Birmingham and Solihull, the Black Country 92,070 11,790 12.8% East London 113,610 14,510 12.8% South Yorkshire 40,680 5,090 12.5% Scotland 127,410 15,780 12.4% West Yorkshire 62,330 7,650 12.3% North East 81,300 9,800 12.1% Merseyside, Halton, Cumbria and Lancashire 87,460 10,510 12.0% Devon and Cornwall, Dorset and Somerset 37,770 4,490 11.9% Gloucestershire, Wiltshire and Swindon, West of England 35,170 3,970 11.3% North East Yorkshire and the Humber 37,890 4,230 11.2% Wales 69,590 7,550 10.8%
Notes: Figures are rounded to the nearest ten and thus may not sum. Figures less than five are suppressed. Rounding errors mean the ratio of job outcomes to referrals for some local authorities may be over- or under- stated.
Source: HC Library analysis via DWP Tabulation Tool
19. OneT T T T T T in nine people in Wales who joined the Work Programme in its first two years found sustained employment. Although this is not greatly dissimilar to the Great Britain average, we are concerned that the proportion of jobseekers who secure sustained employment through the Work Programme in Wales is the lowest in Great Britain.
20. A different way to present the statistics is by the percentage of people referred to the Work Programme each month who achieved a job outcome 12 months later (for example, the percentage of people referred in June 2011 that had been in employment for 13 or 26 weeks by June 2012). This cohort-based measure gives a better picture of trends in performance. Figure 1 shows how Wales compares to Great Britain.
10 The Work Programme in Wales
Figure 1: People referred to the Work Programme who achieved a job outcome 12 months later
Percentage
16%
14% Great Britain 12%
10% Wales 8%
6%
4%
2%
0% Jul 11 Oct 11 Apr 12 Jun 12 Jun 11 Jan 12 Mar 12 Feb 12 Nov 11 Dec 11 Aug 11 Sep 11 May 12
T T T T T Source:T Department for Work and Pensions, Work Programme data visualisation
21. Figure 1 shows that the Work Programme’s performance has steadily improved over time at both the Great Britain and Wales levels. The proportion of people referred to the Work Programme in September 2011 who achieved a job outcome 12 months later was similar for Great Britain and for Wales (9.6% and 9.4% respectively). This had diverged by the time of the June 2012 cohort: 13% of the June 2012 cohort in Great Britain achieved a job outcome 12
months later compared to 10.6% of the same cohort in Wales. T T T T T WeT are broadly encouraged that the Work Programme’s performance has been improving over time, both in Wales and Great Britain. We note, however, that performance in Wales has fallen behind the Great Britain average for the most recent cohorts to have completed one year on the programme.
B B B B B NumberB of people entering work
22. The DWP does not collate statistics on the number of people who enter work through the Work Programme because the focus is on sustained employment (the DWP’s main indicator is jobseekers who have secured employment for 13 or 26 weeks). However, the Employment Related Services Association (ERSA)—the trade body representing employment providers— produces unverified statistics of people who enter work through the Work Programme. In June 2013, ERSA estimated that 23% of jobseekers on the Work Programme in Wales entered work since June 2011. This is lower than any other region operating the scheme, although only slightly below the 24% of jobseekers in Merseyside, Halton, Cumbria and Lancashire (CPA 6), North East Yorkshire and the Humber (CPA 18), and Devon, Cornwall, Somerset and Dorset (CPA 11). 11 The average across Great Britain was 26%.P FP FP FP FP FP
11 Employment Related Services Association, Work Programme Performance Report, 20 June 2013, p 12
The Work Programme in Wales 11
B B B B B RegionalB variations within Wales
23. Table 2 sets out Work Programme’s performance in different local authority areas in Wales. The Work Programme has been most successful at providing sustained employment for jobseekers in Flintshire (14% of participants) and least successful in Gwynedd and Anglesey (both 9%). Table 2 also shows that there are no major differences overall in the performance of the two prime providers in Wales. Both Working Links and Rehab Jobfit have received more than 34,000 referrals and each has an 11% job outcome performance.
12 The Work Programme in Wales
ose 12% 10% 10% 13% of job of job outcomes Proportion to referrals
8% 10% 13% 10% 90 11% Links Links Job outcome payments
130 14% 130 110 10% 110 80 13% 80 100 10% 100 0 3,860 11% 3,860 0 830 3,180 350 11% 3,180 350 1,070 130 12% 1,070 130 1,480 160 11% 1,350 200 15%
bulation Tool n the Wales total. totals country Local authority 2,930 340 12% 340 2,930 1,500 150 10% 150 1,500 country of Wales. Some people living in England cl 9% WP Ta ger tha of job of job outcomes Proportion to referrals Referrals er, June 2011 to June 2013 Working 13% 390 40 10% 40 13% 390 60 7% 70 8% 900 90 8% 900 70 100 12% 770 90 12% 770 100 160 13% 1,340 160 12% 160 13% 1,340 160 250 11% 2,310 220 11% 2,310 250 250 11% 2,400 280 12% 280 11% 2,400 250 150 10% 1,440 190 10% 1,440 150 Jobfit Job outcome payments
170 12% 170 1,450 120 440 10% 440 4,720 490 180 180 15% 180 180 1,230 160 820 1,730 170 10% 1,730 170 1,770 170 1,470 4,540 1,450 120 8% 1, 1,370 160 12% s and Work Programme provid
3,170 340 11% 340 3,170 1,070 150 14% 150 1,070 11% 34,320 3,660 11% 34,77 3,660 11% 34,320 10% 10% 13% 14% 11% 1,140 130 11% 1,130 130 11% 1,140 13% 940 120 13% 940 120 13% 940 11% 610 60 10% 630 60 11% 610 ision in Wales, meaning the total for Wales CPA is lar of job of job rs in neighbouring CPAs. Source: HC Library analysis via D outcomes Proportion to referrals Referrals s data for the Wales CPA and Tables 2 and 4 show data for the
10% 2,810 260 11% 920 110 12% 960 110 11% 920 1 show 600 290 280 940 350 320 11% 1,510 160 11% 160 11% 1,510 320 gramme prov her provide Job Total Rehab by local authority in Wale outcome payments
7,560 1 PPPPPP 790 90 11% 390 50 11% 390 90 790 2,710 330 12% 1,280 330 2,710 4,630 470 10% 2,320 470 4,630 6,360 700 11% 1,670 200 12% 830 200 1,670 2,930 280 10% 4,770 530 11% 2,370 530 4,770 3,500 340 10% 1,770 160 9% 870 160 1,770 1,660 150 9% 2,940 340 12% 1,490 340 2,940 2,720 360 13% 69,380 1,310,720 168,420 13% Referrals
Tydfil 240 2,270 PPPPPPReferrals in this table differ from Table 1, because Table Neath Port Talbot Gwynedd Isle of Anglesey Blaenau Gwent Torfaen 2,910 Swansea Carmarthenshire 3,010 Merthyr Caerphilly 5,750 Caerphilly Cardiff 9,250 Rhondda, Cynon, Cynon, Taff Rhondda, Monmouthshire 140 1,250 Newport Bridgend Ceredigion Denbighshire 210 1,890 Powys Wrexham Flintshire 2,480 Pembrokeshire 250 1,880 The Vale of Glamorgan 2,150 Conwy Wales Great Britain 1 PPPPPP may include Work Programme participants served by ot to the Welsh border will have been referred to Work Pro outcomeTable 2: Referrals payments and job
The Work Programme in Wales 13
B B B B Employment rates in Wales
24. It is difficult to make meaningful correlations between labour market trends and the performance of the Work Programme. In April-June 2013, there were 1.37 million people in Wales in employment, 29,000 more than in April-June 2011 when the Work Programme was introduced. The employment rate increased from 68.2% in April-June 2011 to 69.4% in April-June 2013.
25. Unemployment in Wales at the time of the launch of the Work Programme (April- June 2011) was 8.5%. By April-June 2013 unemployment had reduced to 8.2%. Over the 12 same period UK unemployment fell slightly from 7.9% to 7.8%.P FP FP FP FP FP
B B B B B MinimumB performance levels
26. The DWP imposed contractual minimum performance levels on prime providers for three specific claimant groups on the Work Programme: Jobseekers Allowance (JSA) claimants aged 18 to 24 years old; JSA claimants aged 25 and over; and new Employment and Support Allowance (ESA) claimants. The DWP decided not to set minimum performance levels for the other eligible claimant groups, such as early access JSA, ESA ex- Incapacity Benefit, ESA volunteers and prison leavers, as these client groups represented “unknown territory” for the programme. Progressively challenging minimum performance levels were set for each of the first seven years of the Work Programme.
27. The performance of the 40 contract providers across Great Britain in supporting the JSA 18-24, JSA 25+ and new ESA claimant categories is set out in Annex B. In year one of the programme, providers did not meet minimum performance levels for any of the three claimant groups. In year two, several providers exceeded the minimum performance levels for the JSA 18-24 and JSA 25+ groups, although the overall average across all providers was slightly below the DWP’s minimum performance levels. Minimum performance levels were not met in either year for the new ESA claimant group (we discuss this in more detail in Chapter 3).
28. Table 3 shows the performance of Working Links Wales and Rehab Jobfit against the minimum performance levels for the three claimant groups. It also compares their performance to the other 38 contract providers. Neither Working Links Wales nor Rehab 13 Jobfit met the minimum performance levels in either year one or two.P P P P P F F F F PPPPPP In year two, Working Links Wales had the lowest job outcome rate for the JSA 18-24 group of any provider (24.5% compared to the minimum performance level of 33%). For the JSA 25+ group, Working Links Wales had the second lowest job outcome rate in year two while Rehab Jobfit had the fourth lowest (15.5% and 16% respectively against the minimum performance level of 27.5%).
12 ONS Labour Market Statistics, August 2013 13 Paragraph 33 sets out the providers’ explanation for their early difficulties with the programme.
14 The Work Programme in Wales
Table 3: Providers' performance in Wales compared to DWP Minimum Performance Levels (MPLs)
Year 1 JSA 18-24 JSA 25 and over New ESA claimants Job Job Job outcome Provider outcome Provider outcome Provider 1 ratio rankPPPPPP ratio rank ratio rank MPL 5.5% 5.5% 5.5% Great Britain 1.0% 1.0% 0.6% Rehab Jobfit (Wales) 0.6% =30 0.6% H H 0.4% =25 Working Links (Wales) 1.2% =12 0.6% =31 0.3% =31
Year 2 JSA 18-24 JSA 25 and over New ESA claimants Job Job Job outcome Provider outcome Provider outcome Provider ratio rank ratio rank ratio rank MPL 33.0% 27.5% 16.5% Great Britain 31.7% 27.2% 5.3% Rehab Jobfit (Wales) 26.6% =32 16.0% 37 3.8% 37 Working Links (Wales) 24.5% 40 15.5% 39 4.7% 28
1 PPPPPP FromPPPPPP a total of 40 providers
Source: DWP, Work Programme Official Statistics to June 2013
B B B B B WhyB is the Work Programme performing less well in Wales?
29. Witnesses gave different explanations for why the Work Programme was performing less well in Wales than other parts of Great Britain, including: the availability of fewer jobs, 14 15 including permanent and full-time jobs;P FP PF P P P PPPPPP the F F F F higher unemployment rate;PPPPPP F F F F F F aPPPPPP skills 16 shortage;P FP P P P FP F PPPPPPchallenges related to the rural nature of much of Wales, for instance with 17 transport;P FP FP P FP P F PPPPPPa reduction in voluntary organisations for providers and subcontractors to 18 collaborate with;P FP FP F F F FP P P PPPPPPconfusion with the Welsh Government’s own employment 19 schemes;P FP FP FP FP FP PPPPPPand the restriction in Wales of Work Programme participants being able to access some other training courses (we discuss this issue specifically in Chapter 4).
30. Giving evidence, the Minister for Employment told us there was no need to be overly pessimistic about the economic situation in Wales. He emphasised that 32,000 more people
14 Q 5 [Citizens Advice Cymru]; Q 137 [Tydfil Training] 15 Q 53 [Working Links Wales] 16 Q 137 [Tydfil Training] 17 Q 123 [Agoriad Cyf] 18 Q 123 [Agoriad Cyf] 19 Ev 64 [Tydfil Training]
The Work Programme in Wales 15
were in employment compared to last year and that private sector jobs had increased by 46,000 since May 2010:
None of us should be complacent about what is happening, but, equally, we need to be very careful that we do not talk down the economy to the people of Wales because 20 the figures do not bear out [a pessimistic] analysis.P FP FP FP FP FP F
31. In respect of the lower performance of the Work Programme in Wales, the Minister placed the onus on the two prime providers in Wales to improve their performance. He noted that some providers in Great Britain were performing “exceptionally well” and exceeding their minimum performance levels, but others “could do better”. He said he had visited the providers in Wales and “they are aware of their challenges, and we are very keen 21 to help them and badger them to be successful”.P FP FP FP FP FP F
32. The Minister acknowledged that Working Links Wales and Rehab Jobfit were operating in a “quite challenging environment” in Wales because they had a smaller pool of 22 subcontractors to utilise and there was a higher proportion of temporary jobs.P P P F F F FP P But he stressed that the Welsh labour market was improving and that Wales was not “in any way particularly more challenging than other nations across the UK”. He gave the example of 23 Scotland—“where both providersP FP FP FP FP FP F excPPPPPP eeded the targets by some way”— to demonstrate that the Work Programme could work “in very challenging parts of the country and be very successful”. He was “confident that we can make progress [in Wales] and the 24 providers need to make progress too”.P FP FP FP FP FP F PPPPPP
33. The two prime providers in Wales accepted that there had been early challenges with the Work Programme, particularly because the first year had been the start-up phase. Working Links Wales, however, was confident that the Work Programme was “working for Wales” and “gathering momentum”. Working Links was “very confident about year 25 three”.P FP FP FP FP FP F RehabPPPPPP Jobfit remained confident in its ability to perform to its targets over the 26 duration of the contract.P FP FP FP FP FP F
34. T T T T T TheT two prime providers in Wales have struggled to meet the Department for Work and Pension’s minimum performance levels. We note that they are operating in a challenging environment, in part due to the high number of temporary jobs in Wales. Provided the labour market in Wales continues to improve, the performance of the two providers in Wales ought to improve in years three and four of the programme.
20 Q 208 21 Q 145 22 Q 146. A higher proportion of temporary jobs would make it harder to remain in sustained employment for 13 or 26 weeks and thus be eligible for a job outcome payment. 23 The providers in Scotland are Ingeus UK Ltd and Working Links. 24 Qq 146–147 25 Q 85 26 Q 43
16 The Work Programme in Wales
3 B B B B B SupportingB different groups in society
35. In past welfare-to-work programmes providers have sometimes tended to prioritise long-term jobseekers who are relatively job-ready, while sidelining jobseekers with more significant barriers to employment. The Work Programme was designed to reduce this risk of “creaming and parking” by employing an innovative differential pricing model. Jobseekers are allocated to one of eight payment groups (nine in England), based largely on benefit type being claimed, with some sub-categories according to age, and a separate group for JSA claimants with the most significant barriers to work, such as serious drug problems and homelessness. There is also a separate category for prison leavers. As we have indicated, providers can claim greater financial rewards for finding sustained employment for jobseekers whom DWP considers to be harder to help.
B B B B B JobB outcomes for different claimants groups in Wales
36. Table 4 sets out how jobseekers from the eight different payment groups fared under the Work Programme in Wales compared to the Great Britain average.
Table 4: Work Programme referrals and job outcome payments in Wales: June 2011 to June 2013
Wales Great Britain Proportion Proportion Job of job Job of job outcome outcomes outcome outcomes Payment group Referrals payments to referrals Referrals payments to referrals
Total 69,380 7,560 11% 1,310,720 168,420 13% JSA 18 to 24 13,160 2,010 15% 241,400 40,910 17% JSA 25 and over 21,450 2,300 11% 557,340 75,930 14% JSA Early Entrants 18,510 2,800 15% 264,000 43,210 16% JSA Ex-IB 1,230 80 7% 18,350 1,200 7% ESA Volunteers 1,910 50 3% 46,620 1,410 3% New ESA claimants 8,000 250 3% 116,400 4,500 4% ESA Ex-IB 2,630 10 0% 33,410 310 1% IB/IS Volunteers (England) - - - 2,700 340 13% JSA Prison Leavers 2,480 50 2% 30,500 630 2%
Notes: Figures are rounded to the nearest ten and thus may not sum.
Job outcome payments for the JSA 18-24 and JSA 25+ payment groups are made after the participant has been in employment for six months. Job outcome payments for all other payment groups are made after the participant has been in employment for three months. IB refers to Incapacity Benefit, IS to Income Support.
Source: HoC Library analysis via DWP Tabulation Tool
37. The DWP’s data can also be segregated by the specific characteristics of claimants, such as gender, ethnicity and disability. Table 5 presents this data in Wales compared to the Great Britain average.
The Work Programme in Wales 17
Table 5: Job outcome performance in Wales by claimant characteristic, June 2011-June 2013
Proportion of Job job outcomes to Referrals outcomes referrals GB comparison Men 47,130 5,300 11.2% 12.9% Women 22,240 2,260 10.2% 12.7% People with a disability 22,930 1,300 5.7% 7.3% Lone parents 4,070 480 11.8% 15.3% Ethnicity: white 64,090 6,970 10.9% 12.7% Ethnicity: BME 2,600 290 11.2% 13.2% Aged 50+ 10,800 700 6.5% 8.5% All participants 69,380 7,560 10.9% 12.8%
Note: Figures are rounded to the nearest ten.
Source: DWP Tabulation Tool
B B B B B HelpingB those furthest from the labour market
38. Some witnesses raised concerns that the Work Programme was failing to meet its aim of supporting the most challenging claimants. As discussed above, all providers failed to meet the minimum performance levels for new ESA claimants in the first two years of the programme. The Employment Related Services Association (ERSA) estimates that only 15% of ESA claimants had entered work through the Work Programme since June 27 2011.P FP FP FP FP FP F InPPPPPP Wales ten ESA ex-Incapacity Benefit claimants found sustained employment 28 through the Work Programme, out of 2,630 referrals (Table 4).P FP FP FP FP FP F
39. Specialist subcontractors explained there had initially been a slow entry of ESA 29 participants to the Work Programme but that numbers were beginning to increase.P P P P P P F F F F F Other witnesses suggested that ‘creaming and parking’ was taking place on the Work Programme. We heard that prime providers operated a “traffic light” approach to supporting individuals: “People who were seen as furthest away from the labour market were de-prioritised and only got any support at all after having very strong local 30 advocacy”.P FP FP FP FP FP F CharitiPPPPPP es told us that this was having a detrimental impact on the physical 31 and mental health of some individuals.P FP FP FP FP F P F OxfamPPPPPP Cymru believed that the differentiated payment levels were not sufficiently incentivising providers to assist jobseekers with the 32 most complex barriers.P FP FP FP FP FP F
27 “Work Programme stats show Wales has UK’s lowest dole-to-job success rate on flagship scheme”, Wales Online, 21 June 2013 28 Figures are rounded to the nearest ten. 29 Q 92 30 Q 8 [Oxfam Cymru] 31 Ev 43 [Citizens Advice Cymru]; Ev 37 [Oxfam Cymru] 32 Q 8
18 The Work Programme in Wales
40. Reporting in May 2013, the Work and Pensions Committee found “growing evidence that the Work Programme is failing to reach jobseekers with the most severe barriers to employment”. It concluded that “the current pricing structure, based largely on the type of benefit jobseekers are claiming, is a very blunt instrument for identifying jobseekers’ needs”. The Committee said that “in the longer-term [...] the DWP should consider whether a more thorough assessment of individuals’ barriers to work [...] should be the 33 basis of a future needs-based differential pricing structure”.P FP FP FP FP FP F
41. We questioned the prime providers about the differentiated payment model. Rehab Jobfit said that the payment amounts in themselves were not “an issue”, but defining people only by their benefit classification type did “not necessarily reflect the challenges 34 that those particular individual customers may face”.P FP FP FP FP FP F ThPPPPPP e subcontractor Remploy, on the other hand, noted that committing substantial funds to individuals with complex barriers came with a “heightened financial risk”: it suggested the Work Programme could 35 include a “greater upfront payment” to cover some of these costs.P FP FP FP FP FP F PPPPPP
42. The Minister accepted that the low job outcome rates for ESA claimants needed to improve. He aimed to “drive up performance” and said that he had asked every provider to provide “an action plan to demonstrate how they are going to improve job outcomes for the ESA payment groups”. He explained:
It is important, rather than writing these people off, as has happened in the past, when people are stuck on incapacity benefit for years without anyone looking at them, we want to make sure that we give them help to get them back into work. This is the first time that any Government have launched a major programme to help people who have been out of work though ill-health back into employment, and it is 36 something that we are proud of.P FP FP FP FP FP F
43. The Minister had also set up a ‘Building Best Practice Group’ to help organisations delivering the Work Programme find the best ways to support the harder to help. The Best Practice Group, which was chaired independently, would “develop a framework so 37 [providers] can all benefit from as much expertise as possible”.P FP FP FP FP
44. T T T T T TheT Work Programme was designed to be an improvement on previous welfare- to-work schemes by incentivising providers to support jobseekers with the most severe barriers to employment. This is a worthy ambition, and a significant challenge, but the programme’s success in this respect is yet to be proven.
45. T T T T T WeT recommend that the Department for Work and Pensions review whether there are means better to incentivise providers to support jobseekers with the most severe
33 Work and Pensions Committee, Can the Work Programme work for all user groups?, Summary 34 Q 65 35 Ev 62 36 Q 167 37 HC Deb, 12 July 2013, col 456W. The group is chaired by Andrew Sells.
The Work Programme in Wales 19
barriers to employment, including Employment and Support Allowance claimants. This should include a review of the differentiated pricing structure.
B B B B B LoneB parents
46. One of the biggest differences between the Work Programme’s performance in Wales and Great Britain is among lone parents. 11.8% of lone parents in Wales found sustained work through the Work Programme compared to 15.3% at the British average (Table 5).
47. The charity Gingerbread published a study in March 2013 which found that single parents only received limited generic help on the Work Programme and from JobCentre Plus, despite being assured personalised specialist support. The study, which interviewed 27 single parents, found: “The Work Programme as it currently stands is not delivering the employment support that single parents (and other claimants) need to realise their work 38 aspirations”.P FP FP FP FP FP F KirstyPPPPPP McHugh, Chief Executive of ERSA, responded to the report by stating:
“This research highlights some serious issues facing lone parents looking to get back to work. Work Programme providers recognise many of the points highlighted in the report, including lack of access to affordable childcare and the need for a smooth handover from Jobcentre Plus. [...] It is essential that expertise is shared to make the 39 best quality support available to lone parents”. P FP FP
48. Oxfam Cymru told us that there was “an absence of personalised support” for many jobseekers on the Work Programme and there had been a “consistent failure” by providers 40 to “recognise the care responsibilities of single parents”, who were nearly all women.P P P P P F F F F PPPPPP The Welsh Government also identified childcare as an area that required further 41 research.P FP FP FP FP FP
49. Tydfil Training, a subcontractor operating the Work Programme in South Wales, said:
You have to look at things like childcare provision and access to affordable and reliable childcare provision. [.... At Tydfil Training] we found that, if a lone parent presented themselves and said they did not have a particular issue with childcare, the majority could progress into work because the nature and type of work that is available at the moment did lend itself somewhat to a lot of the aspirations of some of the lone parents [...]. Certainly, the competitiveness that is confronting the average jobseeker is hard, and, when you multiply that by additional barriers, be it disability or a particular other characteristic, then that is probably why the Welsh scene is 42 more difficult than it is UK-wide.P FP FP FP FP FP
38 Gingerbread, Tailor-made? Single parents’ experiences of employment support from Jobcentre Plus and the Work Programme, March 2013, p 71 39 “Work programmes fail to recognise single parents’ needs, study claims”, The Guardian, 12 March 2013 40 Q 21 41 Ev 58 42 Q 136
20 The Work Programme in Wales
50. The Minister accepted that there was room for improvement in supporting lone parents on the Work Programme. He was keen for the Best Practice Group to look specifically at this issue. He cited some positive examples of providers (including Working Links) finding suitable employment for lone parents with companies such as Marks & Spencer: “We need to find what has worked in that situation and what we can replicate elsewhere, because we need to move more people closer to the labour market. [...] That needs to happen more often, in more places and for more people”. It was necessary to be more “creative” to support lone parents. He noted that additional child care support would be available as part of the move to Universal Credit to assist people working fewer than 16 43 hours a week.P FP FP FP FP FP
51. T T T T T WeT are concerned that lone parents in Wales are struggling to find sustained employment through the Work Programme compared to other parts of Great Britain. Working Links Wales and Rehab Jobfit must ensure that both they and their subcontractors have specific measures in place to support lone parents into work.
52. T T T T T GivenT this is a particular problem in Wales, we ask the Department for Work and Pensions to ensure the lessons learned from the Best Practice Group about how best to support lone parents are communicated to providers and subcontractors in Wales.
43 Qq 155–156
The Work Programme in Wales 21
4 B B B B B CompatibilityB with Welsh Government and EU funded schemes
53. One significant difference between the Work Programme in Wales and England is that Work Programme participants in Wales are unable to access a range of other publicly- funded training courses once they begin the programme. The Welsh Government’s Welsh European Funding Office determined that Work Programme participants would not be allowed to access other courses funded by European Social Funds (ESF) because it 44 constituted double-funding under EU rules.P FP FP FP FP FP F AsPPPPPP a result, all ESF-funded courses in Wales are unavailable to Work Programme participants, including if the jobseeker was taking the course prior to referral onto the Work Programme. The Scottish Government has taken a similar decision in Scotland. This is not the case in England, where customers 45 are able to access Skills Funding Agency programmes which are part funded by ESF.P FP FP FP FP FP F
54. Many witnesses, including the two prime providers in Wales, highlighted the ESF 46 course restriction as a significant barrier.P FP FP FP FP FP F RPPPPPP ehab Jobfit described it as “one of our biggest constraints in Wales” because many ESF-funded courses complemented the Work Programme:
It is not about duplication of funding but about complementary support, so mental health awareness, drug and alcohol support and basic skills training. There are a number of funding streams through ESF that are really complementary to what we 47 do.P FP FP FP FP FP
Working Links Wales said that the Work Programme had been designed to be integrated with other programmes so the ESF restriction created “an issue”. The provider was also aware of people being faced with a “dilemma” because they had been given an opportunity on Jobs Growth Wales—a European-funded Welsh Government scheme which provided a paid job placement for six months—while beginning the Work Programme (statistics on 48 Jobs Growth Wales are provided in Annex C).P FP FP FP FP FP F ERSA,PPPPPP the trade body representing providers, said “the fact that the Welsh Government took a political decision not to allow 49 ESF funding to be used” hindered the effectiveness of the Work Programme in Wales.P FP FP FP FP FP
44 The Welsh Government’s written evidence states: “WEFO has to demonstrate added value for ESF investments and this includes satisfying the European Commission that ESF funding does not duplicate or substitute for the Member State’s own programmes. Due to the ‘black box’ nature of the Work Programme contracts, it has been concluded that it would not be possible to show added value for any ESF employment project support to individuals on the Work Programme” (Ev 60). The Department for Work and Pensions, however, state that the rules have been interpreted in a different way in England and Wales: “In England, the ESF approach is a little more tolerant [...] In general the key requirement is to avoid duplication and demonstrate added value. In short risk mitigation. Wales takes a very different approach, risks/concerns about added value, substitution and additionality addressed through a clear line that participants in the Work Programme cannot access ESF funded provision at the same time. In short risk avoidance.” (Ev 64) 45 Q 196 [Department for Work and Pensions] 46 See also Q 12 [Oxfam Cymru] 47 Q 45 48 Q 51 49 Q 47
22 The Work Programme in Wales
Rehab Jobfit called for “greater collaboration between different arms of government” to 50 resolve the issue.P FP FP FP FP FP F
51 55. Subcontractors, such as Tydfil Training, Remploy and Agoriad Cyf,P P P F F F F FP P P F PPPPPP raised similar concerns. We were told that the ESF restriction created difficulties for jobseekers both before and during their placement on the Work Programme. Tydfil Training said:
[...] we were initially finding that some individuals would engage with a European- funded programme, they were happily working towards a successful outcome, they would get referred to the Work Programme, and then it came to an end, which felt 52 farcical really. [...] That was not a good situation for the customer to arrive in.P FP FP FP FP FP
Then, once participants began the Work Programme, subcontractors needed “all the ammunition that we can get our hands on to try and develop a realistic back-to-work programme for this individual”.PPPPPP PPPPPPThe ESF restriction was thus “frustrating” for both the 53 subcontractor and the jobseeker.P FP FP FP FP FP F PPPPPPRemploy — which operates in both England and Wales—said that lifting the restriction would allow better collaboration between providers and subcontractors and smaller community organisations. Remploy sometimes had to use its own staff in Wales “to compensate for the lack of access to ESF [...] whereas if we could access ESF activity we could have them focussed more on their core job, of working with 54 employers and getting people to work”.P FP FP FP FP FP F PPPPPP
56. We questioned the Minister for Employment about the impact of the ESF course restriction in Wales. He described the Welsh Government’s decision as “disappointing” and the double-funding rationale a “mystery”. He believed that the restriction disadvantaged providers in Wales compared to those in England. It was “almost as if the 55 Work Programme providers [in Wales] have their arms tied behind their backs”: P FP FP FP FP FP F
In England, what I would characterise is that the really good [provider] performers are very good at levering resources of money from different areas and working with people across local councils and with training providers to maximise resources that can be used to help someone get a job. I would like to see the same approach applied 56 in Wales.P FP FP FP FP FP F
57. The Minister believed that “a more collaborative and supportive approach from the Welsh Assembly Government will be hugely helpful in getting more people into work”. He was “very keen” to meet the new Welsh Government Minister for Education and Skills,
50 Q 52 51 Q 91 52 Q 105 53 Q 105, Ev 53 54 Q 107 55 Qq 107, 175, 193 56 Q 178
The Work Programme in Wales 23
57 Huw Lewis AM, to try and resolve the situation.P FP FP FP FP FP HePPPPPP told us several times that lifting the 58 ESF restriction was “a very simple thing” for the Welsh Government to do.P FP FP FP FP FP F
58. In written evidence, the Welsh Government explained that it was required to satisfy European Commission rules in respect of ESF and argued that its approach helped to “maximise public funding in Wales and indeed UK Government funding by avoiding duplication”. ESF courses were specifically targeted at unemployed people who were not on the Work Programme (for instance, JSA and ESA claimants prior to referral on the Work Programme, or 16 to 17 year olds most of whom cannot claim benefits) and, to date, had helped almost 48,000 people into employment. Although the Welsh Government was currently reviewing the implications of European funding post-2014, including “ESF- supported employment and skills activity”, it did not indicate to us that the decision would be reviewed. There was also no indication that the Welsh Government would discuss this 59 matter with the UK Government.P FP FP FP FP FP F
59. T T T T T TheT restriction in Wales on Work Programme participants being able to access European Social Fund training and skills courses is detrimental to the performance of the Work Programme in Wales and, ultimately, for the opportunities available to the long-term unemployed. It is regrettable that fewer opportunities are available to Work Programme participants in Wales to develop their skills and learning compared to participants on the same programme in England.
60. T T T T T ThereT is also a clear incompatibility between the UK Government’s Work Programme and the Welsh Government’s Jobs Growth Wales scheme. Jobseekers on the Work Programme are unable to take up a paid job placement through Jobs Growth Wales.
61. T T T T T WeT urge the Department for Work and Pensions and the Welsh Government to resolve the current situation where Work Programme participants in Wales are unable to access the full range of training courses available to them, unlike in England. This should be achieved by February 2014.
62. T T T T T WeT call on the Secretary of State for Wales to use his influence to help resolve this unsatisfactory situation.
63. T T T T T WeT urge the Department for Work and Pensions to enable participants to exit the Work Programme if required in order to access Jobs Growth Wales.
57 Q 176 58 Qq 181-182, 185 59 Ev 58
24 The Work Programme in Wales
5 B B B B B EmployerB engagement
64. Encouraging employers to recruit long-term unemployed people will be a key factor in the job outcome performance of the Work Programme. But there have been concerns that employers are not sufficiently aware of the Work Programme. The Work and Pensions Committee reported in May 2013 that “general awareness of the Work Programme 60 amongst employers appears to be low”,P FP FP FP FP FP aPPPPPP view shared by some of our witnesses. Rehab JobFit believed the Work Programme could operate as a “free recruitment service for 61 employers” but “ at this stage employers are not always aware of the Work Programme”.P P P P P P F F F F F
APPPPPP survey by the Chartered Institute of Personnel and Development in the summer of 2012 62 found that only 51% of employers were aware of the scheme.P P P P P F F P F F FWe FPPPPPP received few contributions to our inquiry from employers.
65. Some witnesses suggested that providers could better promote the Work Programme to employers. The Federation of Small Businesses Wales (FSB Wales) questioned whether providers were advertising their services to small businesses in an effective way:
Some features of the Work Programme do have potential benefit to small businesses such as the offer of a free recruitment service, pre-screening of candidates, and work trials. A significant problem is that anecdotal evidence suggests that many members 63 are simply unaware of the scheme or its relevance to them.P FP FP FP FP FP F
Tydfil Training pointed out that small businesses were more risk-averse than larger ones 64 and “increased employer confidence” was a key priority for the Work Programme.P P P P P P F F F F F F 65 Remploy said there was a need to “simplify” employer engagement.P P P P P P F F F F F FFSBPPPPPP Wales suggested employer demand could be improved by a direct financial incentive for taking 66 on Work Programme participants.P P P P P P F PPPPPP A F F F F F wage incentive is currently available for employers who take on Work Programme participants aged 18 to 24 years old, as part of the Youth Contract.
66. A particular difficulty in the Welsh context was that employers could be confused by the range of different UK and Welsh government employment programmes on offer, including the Work Programme and Jobs Growth Wales. ERSA said there was “real confusion among [employers] about the Work Programme, apprenticeships, the Wales- 67 specific Work Choice and all these different public sector-funded schemes”.P FP FP FP FP FP F FSBPPPPPP Wales shared this view, commenting that “the welfare-to-work space is an increasingly crowded
60 Work and Pensions Committee, Can the Work Programme work for all user groups?, para 74 61 Ev 49 62 CIPD, Labour Market Outlook: Focus on the Work Programme, November 2012 63 Evw11 64 Qq 96, 106 65 Q 125 66 Evw11 67 Q 80. See also Working Links Wales (Q 62)
The Work Programme in Wales 25
68 policy landscape”.P FP FP FP FP FP F TydfilPPPPPP Training, which runs both the Work Programme and Welsh Government schemes, agreed there was a “significant level of confusion” amongst employers and noted that employers seemed “more conducive” to Jobs Growth Wales than 69 the wage incentive available for 18 to 24 year olds under the Work Programme.P FP FP FP FP FP
67. The Minister believed that the primary responsibility for employer engagement lay with the providers: “providers can go out there and talk to any business they want. [....] They need to go out and find those jobs, and there are some very successful examples of 70 employer engagement across the Work Programme”.PPPPPP PPPPP FP FP FP P FP F HePPPPPP said that the two providers in Wales could make improvements in this area:
Work providers—I know that the two in Wales do—need to improve their employer engagement effort. They need to increase the supply of jobs that are available to 71 people who have been out of work for some time.P P PPPPPP
He rejected the suggestion of a wage incentive scheme (other than that for those aged 18 to 24 years old) because such schemes had a “chequered history in their effectiveness” and could lead to the creation of short-term public sector jobs, as with the Future Jobs Fund. The DWP had decided to “go down other routes” with the Work Programme with the 72 focus on sustained employment.P FP FP FP FP P
68. T T T T T ItT is clear that many businesses and employers still lack knowledge about the Work Programme and its relevance to them. Providers, including Rehab Jobfit and Working Links in Wales, need to continue to engage employers about the Programme and the benefits it can provide as a free recruitment service.
69. T T T T T TheT Government also has a responsibility to raise awareness of its flagship employment scheme amongst businesses, who ultimately are its primary “customers”. We endorse the Work and Pensions Committee’s call for the Department for Work and Pensions and the Employment Related Services Association to produce a national action plan for engaging employers in the Work Programme before the end of 2013.
70. T T T T T TheT situation in Wales is particularly confusing for employers due to the myriad of different UK Government and Welsh Government welfare-to-work and employment schemes available to them. We call for the UK Government and the Welsh Government to develop a more co-ordinated provision of information for employers in Wales about the different employment schemes available, for the benefit of businesses and jobseekers in Wales.
68 Evw11 69 Ev 64, Q 108 70 Q 197 71 Q 197 72 Q 201
26 The Work Programme in Wales
6 B B B B B Post-WorkB Programme support
71. Once referred by Jobcentre Plus, individuals remain on the Work Programme for two years. Towards the end of our evidence-taking, the first cohorts of jobseekers who had failed to find sustained employment after two years were leaving the programme. The Minister estimated that, in June 2013 (the first month that participants could leave), Rehab JobFit and Working Links returned more than 1,320 people each from Work Programme centres in Wales, although these statistics were not yet verified by the UK Statistics 73 Authority.P FP FP FP FP FP F PPPPPPOfficial statistics on those having spent 24 months on the programme were 74 published for the first time in September 2013, for those referred in June 2011.P FP FP FP FP FP F
B B B B B MandatoryB Intervention Regime
72. Some witnesses were concerned at the uncertainties about the post-Work Programme process. In March 2013, ERSA told us that it feared Work Programme participants would 75 be “dumped again” after the two years.P FP FP FP FP FP
73. In May 2013 the DWP announced the process for those participants who had completed two years on the Work Programme without securing sustained employment. JSA and ESA claimants leaving the Work Programme would return to Jobcentre Plus to be placed on the “Mandatory Intervention Regime”. This would be a “more intensive regime” involving “more frequent meetings with [Jobcentre Plus] advisers and increased use of 76 mandation”.P FP FP FP FP FP F PPPPPPWeekly signing on would be routine and some people would be required to meet their adviser every day. Anyone failing to comply with mandatory activity would lose their benefit for four weeks for a first failure, with penalties of up to three years for serial offenders. JobCentre Plus advisers would conduct a “thorough assessment interview” to “understand how best to build on [the returnee’s] time on the Work Programme” and, at their first meeting, the jobseeker would agree a “back-to-work plan laying out what they are required to do”. The DWP’s press notice stated that Work Programme leavers would be “targeted by a hit squad of specialist advisers as part of a tough approach to get them 77 into a job.”P FP FP FP FP FP F
74. The Minister explained that the Mandatory Intervention Regime was piloted in Leicestershire and Derbyshire in 2012. The new regime would provide further support to people with the most complex barriers: “The Work Programme will move them closer, but there may be still some work to do. There is a dedicated team of advisers at each job centre who work closely with them, identifying alternative provision or support they need to remove those barriers.” Martin Brown, Work Services Director (Wales), Jobcentre Plus,
73 Q 202 74 Department for Work and Pensions, Work Programme official statistics to June 2013, September 2013, p 9 75 Q 65 76 HC Deb, 6 June 2013, cols 1254-55W 77 Department for Work and Pensions press release, “Government announces details of post Work Programme support”, 31 May 2013
The Work Programme in Wales 27
added that the focus for his teams was “very much around carrying on where the Work 78 Programme has left off”.P FP FP FP FP FP F PPPPPP
75. The Minister argued that daily signing on could have a positive impact on claimants: “I have talked to Jobcentre Plus advisers who feel that daily signing on has got some people to face up to what is happening in their lives”. He accepted that some people who returned from the Work Programme were dealing with very complex barriers, but for others the “barrier to work was really one of attitude, and sometimes a closer relationship with 79 Jobcentre Plus helps that”.P FP FP FP FP FP F
B B B B B IsB two years long enough?
76. Some witnesses argued that the two year period of the Work Programme was not long enough for providers to assist people with the more severe barriers to employment. Rehab Jobfit told us that, “for the hardest-to-help customers, a slightly longer time frame would 80 be beneficial to us”.P FP FP FP FP FP F
77. The Minister said the DWP was considering this “important issue very carefully”, although he did not indicate whether the Department would extend the programme for some participants:
People do have different barriers to work. They have a complexity of barriers to work, and they may take different times to eliminate those barriers. [...] we are always looking for ways to improve [the Work Programme] and trying to make sure the support that is given matches the need.
We need to do a bit more work in understanding why it is that people perhaps have not been helped by the Work Programme. [... Jobcentre Plus] are undertaking exit interviews for people who return from the Work Programme and we are looking at that data quite carefully, to understand who it had worked for and who it has not worked for. That will help inform not just the shape of the Work Programme in the future but also, perhaps, some pre-Work Programme support we can offer as 81 well.P FP FP FP FP FP F
78. T T T T T ParticipantsT leaving the Work Programme after two years will be some of those with the most severe barriers to employment. We note the case advanced by providers for a longer timeframe to assist such participants. It would be regrettable if people with complex barriers were making good progress on the Work Programme and were then required to leave.
79. T T T T T WeT recommend that the Department for Work and Pensions consult by February 2014 on whether the timeframe of the Work Programme should be extended for specific categories of claimant.
78 Q 203 79 Qq 203, 206–207 80 Q 53 81 Q 210
28 The Work Programme in Wales
B B B B B ConclusionsB and recommendations
Conclusions
1. One in nine people in Wales who joined the Work Programme in its first two years found sustained employment. Although this is not greatly dissimilar to the Great Britain average, we are concerned that the proportion of jobseekers who secure sustained employment through the Work Programme in Wales is the lowest in Great Britain. (Paragraph 19)
2. We are broadly encouraged that the Work Programme’s performance has been improving over time, both in Wales and Great Britain. We note, however, that performance in Wales has fallen behind the Great Britain average for the most recent cohorts to have completed one year on the programme. (Paragraph 21)
3. The two prime providers in Wales have struggled to meet the Department for Work and Pension’s minimum performance levels. We note that they are operating in a challenging environment, in part due to the high number of temporary jobs in Wales. Provided the labour market in Wales continues to improve, the performance of the two providers in Wales ought to improve in years three and four of the programme. (Paragraph 34)
4. The Work Programme was designed to be an improvement on previous welfare-to- work schemes by incentivising providers to support jobseekers with the most severe barriers to employment. This is a worthy ambition, and a significant challenge, but the programme’s success in this respect is yet to be proven. (Paragraph 44)
5. The restriction in Wales on Work Programme participants being able to access European Social Fund training and skills courses is detrimental to the performance of the Work Programme in Wales and, ultimately, for the opportunities available to the long-term unemployed. It is regrettable that fewer opportunities are available to Work Programme participants in Wales to develop their skills and learning compared to participants on the same programme in England. (Paragraph 59)
6. There is also a clear incompatibility between the UK Government’s Work Programme and the Welsh Government’s Jobs Growth Wales scheme. Jobseekers on the Work Programme are unable to take up a paid job placement through Jobs Growth Wales. (Paragraph 60)
7. Participants leaving the Work Programme after two years will be some of those with the most severe barriers to employment. We note the case advanced by providers for a longer timeframe to assist such participants. It would be regrettable if people with complex barriers were making good progress on the Work Programme and were then required to leave. (Paragraph 78)
Recommendations
8. We recommend that the Department for Work and Pensions review whether there are means better to incentivise providers to support jobseekers with the most severe
The Work Programme in Wales 29
barriers to employment, including Employment and Support Allowance claimants. This should include a review of the differentiated pricing structure. (Paragraph 45)
9. We are concerned that lone parents in Wales are struggling to find sustained employment through the Work Programme compared to other parts of Great Britain. Working Links Wales and Rehab Jobfit must ensure that both they and their subcontractors have specific measures in place to support lone parents into work. (Paragraph 51)
10. Given this is a particular problem in Wales, we ask the Department for Work and Pensions to ensure the lessons learned from the Best Practice Group about how best to support lone parents are communicated to providers and subcontractors in Wales. (Paragraph 52)
11. We urge the Department for Work and Pensions and the Welsh Government to resolve the current situation where Work Programme participants in Wales are unable to access the full range of training courses available to them, unlike in England. This should be achieved by February 2014. (Paragraph 61)
12. We call on the Secretary of State for Wales to use his influence to help resolve this unsatisfactory situation. (Paragraph 62)
13. We urge the Department for Work and Pensions to enable participants to exit the Work Programme if required in order to access Jobs Growth Wales. (Paragraph 63)
14. It is clear that many businesses and employers still lack knowledge about the Work Programme and its relevance to them. Providers, including Rehab Jobfit and Working Links in Wales, need to continue to engage employers about the Programme and the benefits it can provide as a free recruitment service. (Paragraph 68)
15. The Government also has a responsibility to raise awareness of its flagship employment scheme amongst businesses, who ultimately are its primary “customers”. We endorse the Work and Pensions Committee’s call for the Department for Work and Pensions and the Employment Related Services Association to produce a national action plan for engaging employers in the Work Programme before the end of 2013. (Paragraph 69)
16. The situation in Wales is particularly confusing for employers due to the myriad of different UK Government and Welsh Government welfare-to-work and employment schemes available to them. We call for the UK Government and the Welsh Government to develop a more co-ordinated provision of information for employers in Wales about the different employment schemes available, for the benefit of businesses and jobseekers in Wales. (Paragraph 70)
17. We recommend that the Department for Work and Pensions consult by February 2014 on whether the timeframe of the Work Programme should be extended for specific categories of claimant. (Paragraph 79)
30 The Work Programme in Wales
B B B B B AnnexB A: The differential payment model
Maximum payments in year 1 of contracts Payment group Attachment fee Job outcome Sustainment fee Total fee (monthly) 1. JSA aged 18-24 £400 £1,200 £2,220 £3,810 2. JSA aged 25+ £400 £1,200 £2,795 £4,395 3. JSA Early Access £400 £1,200 £5,000 £6,600 4. JSA Ex-IB £400 £1,200 £5,000 £6,600 5. ESA Volunteers £400 £1,000 £2,300 £3,700 6. New ESA claimants £600 £1,200 £4,700 £6,500 7. ESA Ex-IB £600 £3,500 £9,620 £13,720 8. JSA Prison leavers £300 £1,200 £4,000 £5,500
Notes: Attachment fees taper off and are nil from year 4 of contracts. Job outcome fees will be reduced in later years of contracts. B AnnexB B: Performance by providers
The Wo rk Prog ramme in Wales 31
New ESA claimants 6.4 33.6 4.2 19.7 4.1 24.7 5.4 23.7 6.9 JSA 25+ 31.7 27.2 5.3 40.7 24.0 6.2 28.7 30.1 5.7 28.1 19.4 3.5 JSA 18-24
0.4 34.7 22.7 0.4 34.7 4.2 1.7 37.3 23.7 1.7 37.3 4.4 0.6 25.0 28.4 0.6 25.0 4.8 0.3 25.1 29.7 0.3 25.1 6.1 New ESA claimants
3 0.7 34.7 28.8 6.0 34.7 3 0.7 5 0.4 32.6 26.7 4.3 32.6 5 0.4 6 0.7 33.8 21.7 6.2 33.8 6 0.7 0.9 0.4 26.6 29.0 4.3 26.6 17.1 4.2 0.9 0.4 31.1 1.0 0.5 0.8 0.6 0.8 0.8 JSA 25+ 1.0 1.0 0.6 1.8 1.3 1.3 1.1 1.0 0.7 0.6 1.0 0. 0.7 0.9 0.6 26.1 30.2 5.1 26.1 0.9 0.6 0.7 0.7 1.3 0.4 29.7 34.3 3.7 29.7 1.3 0.4 0.7 1.2 1.4 0.5 33.6 34.8 7.6 33.6 1.4 0.5 1.2 Year 1 (Jun 11-Mar 12) Year 2 (Apr 12-Mar 13) JSA 18-24
Lancs 0.3 0.9 0.5 28.4 0.9 0.5 Lancs 0.3 ngton 1.5 1.1 1.0 38.6 24.0 38.6 1.1 1.0 ngton 1.5 k Country 0.4 0.3 0.3 29.7 0.3 0.3 Country 0.4 k k Country 1.3 0.8 0.9 33.6 0.8 0.9 Country 1.3 k rrington 1.2 0.9 1.0 36.3 0.9 1.0 rrington 1.2 Somerset 0.7 0. t, Somerset 0.8 1. area l, Black Country Country Black l, 0.1 0.2 - e, Warrington nd London London Midlands 1.3 rrals by contract and customer group, June 2011 to March 2013 rrals by contract and customer Birmingham, Solihull, Blac Birmingham, Solihull, East of England Birmingham, Solihull, Blac Birmingham, Solihull, Devon, Cornwall, Dorset, Devon, Cornwall, Manchester, Cheshire, Warri Merseyside, Halton, Cumbria, Manchester, Cheshire, Wa
Coventry, Warwicks, Staffs, the Marches 1.1 Coventry, Warwicks, Staffs, the Marches 0.7 Glouc, Wilts, Swindon, West of West Wilts, Swindon, Glouc, England 0.6 Glouc, Wilts, Swindon, West of West Wilts, Swindon, Glouc, England 0.7 East London London East East Midlands East London London East East of Engla Annex B: Performance by providers ESG All providers All providers Newcastle College Group Pertemps Birmingham, Solihul B B B B B B outcomes to refe Ratio of job Provider Contract EOS-Works Serco Careers Development Group Seetec East Ingeus UK Prospects Serv A4e A4e East Ingeus UK JHP Group Working Links (Emp) Working Links Dorse Devon, Cornwall, Seetec Rehab jobfit Rehab jobfit Avanta Enterprise Manchester, Cheshir G4S A4e Seetec
32 The Work Programme in Wales 6.6 45.2 6.2 28.9 18.8 5.7 41.7 24.8 6.0 34.1 29.1 6.0 31.8 21.8 5.9 29.6 35.4 8.0
1.0 0.2 7 0.4 31.6 32.9 5.4 31.6 7 0.4 4 - 24.9 15.7 2.8 15.7 24.9 4 - 0.6 0.6 0 0.7 0.6 29.4 17.2 5.3 29.4 0.7 0.6 0 5 1.0 0.8 25.7 15.4 5.5 25.7 1.0 0.8 5 3 1.3 0.5 36.7 32.3 5.7 36.7 1.3 0.5 3 2 0.9 0.8 29.4 22.0 5.5 29.4 0.9 0.8 2 2 0.6 0.3 24.5 15.5 4.7 24.5 0.6 0.3 2 5 0.9 0.2 32.8 36.0 5.3 32.8 0.9 0.2 5 5 0.9 0.2 25.4 26.9 4.8 25.4 0.9 0.2 5 1. 1.9 1.0 0.9 0.8 1.1 0.7 0.6 1.3 0.2 1.3 0.8 0.7 37.1 25.3 5.2 37.1 0.8 0.7 1.3 1. 1. 1.1 1.2 0.3 36.5 38.7 4.4 1.7 1.8 0.8 39.6 41.7 0.2 0. 0.6 0.6 0.4 26.6 16.0 3.8 26.6 0.6 0.4 0.6 2.0 1.8 0.6 27.8 35.5 5.0 27.8 1.8 0.6 2.0
ria, Lancs 0.2 0. Isle of Wight Isle of Wight 1.0 1.6 1.2 39.4 1.3 2013 s, Isle of Wight Wight s, Isle of 0. Kent The Humber t 0.7 ondon ondon Yorkshire Yorkshire 1. Yorkshire Yorkshire 1. Yorkshire 0. Surrey, Sussex, Kent Scotland Scotland NE Yorks, The Humber
Thames Valley, Hamp Scotland Scotland Wales Merseyside, Halton, Cumb West Yorkshire North East West London West London
Newcastle College Group NE Yorks, G4S G4S Ingeus UK Ingeus UK Source: DWP, Work Programme Official Statistics to June Avanta Enterprise A4e Surrey, Sussex, A4e South Serco South Avanta Enterprise Ingeus UK Working Links North Eas Ingeus UK Ingeus UK Rehab jobfit Wales Rehab Working Links Ingeus UK Ingeus UK Maximus Emp UK Thames Valley, Hamps, Maximus Emp UK Reed in Partnership Ingeus UK Interserve Working West London West L Futures West
The Wo rk Prog ramme in Wales 3331
3% 19% 38% 40% 100% total % of
93 569 1,179 1,240 3,073 All leavers completers/
4% 1% 70% 25% 100% total % of
8 44 717 257 1,018 les opportunity by 10 September 2013 leaving months before 6 Participants
2% 22% 48% 27% 100% total % of
unity, 301 (15%) were unemployed at September 2013. who months Participants completed 6
mpleted/left a 6 month Jobs Growth Wa 462 2 PPPPPP 49 1 PPPPPP Other, incl. unemployed/unknown Other, incl. Further education, training Activity of participants who had co Activity of participants who Employed 983 Total 2,055 Apprenticeships 561
Annex C: Jobs Growth Wales statistics Annex C: Jobs Growth Wales B B B B B B 1. Includes other government training programmes 2. Of those who had completed a 6 months opport Source: Welsh Government
34 The Work Programme in Wales
B B B B B FormalB Minutes
Tuesday 22 October 2013
Members present:
David T.C. Davies, in the Chair
Geraint Davies Nia Griffith Glyn Davies Simon Hart Stephen Doughty Jessica Morden Jonathan Edwards Mr Mark Williams
Draft Report (The Work programme in Wales), proposed by the Chair, brought up and read.
Ordered, That the draft Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 79 read and agreed to.
Annexes agreed to.
Summary agreed to.
Resolved, That the Report be the Third Report of the Committee to the House.
Ordered, That the Chair make the Report to the House.
Ordered, That embargoed copies of the Report be made available (Standing Order No. 134).
Written evidence was ordered to be reported to the House for printing with the Report, together with written evidence reported and ordered to be published on 3 July and 3 September.
[Adjourned till Tuesday 19 November at 9.15 a.m.
The Work Programme in Wales 35
B B B B B WitnessesB
Tuesday 19 March 2013 T T T T T PageT
TTTTTT Chris Johnes,TTTTTT Director UK, Poverty Programme, Oxfam Cymru, and
TTTTTT Fran Targett ,TTTTTT Director, Citizens Advice Cymru Ev 1
TTTTTT Kirsty McHugh,TTTTTT Chief Executive, Employment Related Services
Association, MarcellaT T T T T T Maxwell, DirectorT T T T T T of Wales, Working Links Wales,
and ChrisT T T T T T Peel , ManagiT T T T T T ng Director, Rehab Jobfit Ev 7
Tuesday 4 June 2013
TTTTTT Gareth Parry,TTTTTT Director, Remploy Employment Services, Paul TTTTTT Gray, ChiefTTTTTT
Executive Officer, Tydfil Training Consortium Ltd and Arthur Beechey,TTTTTT Chief Executive Officer, Agoriad Cyf Ev 16
Wednesday 3 July 2013
TTTTTT Mark Hoban MP TTT , TTT Minister for Employment, Department for Work and
Pensions, and T MartinT T T T T Brown, TWorkT T T T T Services Director (Wales), Jobcentre Plus Ev 27
B B B B B ListB of printed written evidence
1 Oxfam Cymru Ev 37 2 Citizens Advice Cymru Ev 40, Ev 44 3 Employment Related Services Association (ERSA) Ev 44 4 Rehab JobFit Ev 46 5 Department for Work and Pensions Ev 50, Ev 64 6 Remploy Employment Services Ev 53, Ev 62 7 Working Links Wales Ev 54 8 Tydfil Training Consortium Ltd Ev 57, Ev 63 9 Welsh Government Ev 58
B B B B B ListB of additional written evidence
(published in Volume II on the Committee’s website www.parliament.uk/welshcom)
1 Llamau Ev w1 2 Rhondda Cynon Taf County Borough Council Ev w2 3 Welsh Local Government Association Ev w6 4 A work programme client, Swansea Ev w8 5 N-ergy group limited Ev w9
36 The Work Programme in Wales
6 Barry Training Services Limited Ev w9 7 Futureworks at Pembrokeshire County Council Ev w10 8 Federation of Small Businesses Ev w11
The Work Programme in Wales 37
B B B B B ListB of Reports from the Committee during the current Parliament
Session 2013–14 First Report The Voluntary Code of Practice in the dairy sector HC 155 Second Report The impact of changes to housing benefit in Wales HC 159 First Special Report Crossing the border—road and rail links between England and HC 158 Wales: Government Response to the Committee’s Third Report of Session 2012–13. Second Special Report Support for Armed Forces Veterans in Wales: Government HC 263 Response to the Committee’s Second Report of Session 2012–13. Third Special Report The Voluntary Code of Practice in the dairy sector: Government HC 635 Response to the Committee’s First Report of Session 2013–14.
Session 2012–13 First Report Broadband Services in Wales HC * Incorporating HC1367-i-iii, Session 2010–12 580* Second Report Support for Armed Forces Veterans in Wales HC * Incorporating HC 1812-i-ii, Session 2010–12 131* Third Report Crossing the border: road and rail links between England and HC 95 Wales First Special Report Representation of consumer interests in Wales: Government HC 111 Response to the Committee’s Seventh Report of Session 2010–12 Second Special Report Inward Investment in Wales: Government Response to the HC 125 Committee’s Eighth Report of Session 2010–12 Third Special Report Broadband Services in Wales: Ofcom Response to the HC 806 Committee’s First Report of Session 2012–13
Welsh Affairs Committee: Evidence Ev 1
Oral evidence
Taken before the Welsh Affairs Committee on Tuesday 19 March 2013
Members present: David T.C. Davies (Chair)
Guto Bebb Simon Hart Geraint Davies Mrs Siân C James Glyn Davies Jessica Morden Jonathan Edwards Mr Mark Williams Nia Griffith ______
Examination of Witnesses
Witnesses: Chris Johnes, Director UK, Poverty Programme, Oxfam Cymru, and Fran Targett, Director, Citizens Advice Cymru, gave evidence.
Q1 Chair: Good morning, Mr Johnes. Fran, we are Fran Targett: It is quite hard to know. From the almost on first name terms on this Select Committee; perspective of our clients, we do not have any you are a permanent member of the Committee. evidence that shows anything specifically different, Thank you for coming along. I am going to kick off but, if pushed, I would have to look at the sort of the question session. Mr Johnes, slightly off topic, economic position that people in particular parts of Oxfam are now working to relieve poverty in Wales. Wales are facing and the dearth of available full-time, Is that so? reasonably paid jobs in parts of those areas, so I Chris Johnes: Yes. We have been working in the UK wonder whether there is a link between those things. since 1996 and in Wales since 2000. Q6 Chair: Mr Johnes, you said in your evidence that Q2 Chair: I am not being facetious. I always thought people are being encouraged to take jobs that do not you were concentrating your efforts in Africa and match their skills. Would you not think it is better for places where there is famine, but obviously I am people to take the job that is available rather than wait, wrong. potentially indefinitely, for the dream job they would Chris Johnes: We have been working to relieve really like to have? different aspects of poverty across the world for 40 Chris Johnes: What was concerning us were the years and, in the UK, for the last 15 or 16. We do not examples we came across where young people in work purely on famine relief; we work also on longer- particular were undertaking very relevant specific term development, and that is where the work in the work-based volunteering and work experience that UK comes in. was putting them clearly on the path towards good sustainable jobs and being pushed into, in one Q3 Chair: In your estimation, there are levels of particular case we have highlighted, Poundland jobs, poverty in Wales and the UK that are so great they which take you out of a certain level of the labour need the help of an NGO like Oxfam. market. There is a question about whether you are Chris Johnes: We would not classify poverty in the going to get the best long-term results for the person UK at the same level as poverty in some of the least and their family versus a short-term result. Frankly, is developed countries in the world—for example, the the short-term result a good result for the person or Congo—and we never state that that is our work, but for the Work Programme provider who can tick a box there are undoubtedly real levels of poverty and and say they have hit a target? disadvantage in the UK, which is why we work here, as do several other organisations who work globally, Q7 Jonathan Edwards: You both suggest that the such as Save the Children. payments-by-results model does not incentivise prime providers to invest in people who are difficult to Q4 Chair: Do you think the Government ought to be assist—for instance, if they have literacy or drug and diverting some of the money they currently use for alcohol problems. How much of a problem is this in poverty relief in the third world back towards Wales Wales? perhaps? Fran Targett: From our client base, we do not have a Chris Johnes: Given the UK’s relative level of wealth huge amount of evidence about that, so it is very compared with most other countries, it has the difficult for me to give you anything definitive. Most resources to do both. of our inquiries are around the link between the Work Programme and the benefits system rather than other Q5 Chair: Ms Targett, the DWP data show that the problems, but, in those terms, the majority of our Work Programme is performing less well in Wales clients are those we describe as the furthest from the than the British average. Have you any thoughts as to labour market, so those are the people we are seeing why that is the case? who are having the most problems. Ev 2 Welsh Affairs Committee: Evidence
19 March 2013 Chris Johnes and Fran Targett
Chris Johnes: For our part, we do a lot of work with Q10 Guto Bebb: You claim that the furthest away people who are quite a long way from the labour from the workplace are the ones who are not getting market. The vast majority of our work is, in one way supported. In other words, you are advocating the line or another, helping people to get closer to the labour that these people are being parked. In terms of market. A significant proportion of the people we concept, do you believe that that situation is worse work with are in the position where, at some point, than under the programmes of support that existed they are likely to find themselves in the Work before the Work Programme was launched? Programme, and it is not an area where the majority Chris Johnes: Our evidence would suggest it is. What are finding much in the way of clear support. In our we have seen under the Work Programme, which is evidence, we have given obvious examples about partly a consequence of funding and may partly be a where particular individuals have clearly been de- consequence of reduced political co-operation in prioritised for support, even when they were Wales between different levels of government, is a themselves keen to take further steps to develop their reduction in integration between support services. skills towards seeking work. That is certainly how we experience it in the projects in which we are working, which means that the join- Q8 Jonathan Edwards: Do you think there are any up between what we might call informal early stage other changes the Government could introduce to help support—basic confidence building and, in the worst people who are furthest away from the labour market? cases, supporting people to kick habits—and the more The DWP tell us in their evidence that the present formalised work training is not as clear as it used to system is structured in a way to help those people be. furthest away from the labour market. Chris Johnes: The evidence we have come across at Q11 Guto Bebb: The Genesis Programme has local level with the projects we have worked with— recently been closed down because it was such a some of the evidence we have provided on behalf of massive failure. Is that necessarily a problem for the one of the Work Programme providers in terms of Work Programme, or does it say that there are too what they described to our project partner is many people involved in this area in the Welsh remarkably frank—is that clearly it is not happening. context? We saw evidence of people being put into a traffic Chris Johnes: I am not sure the Genesis Programme light system. People who were seen as furthest away was regarded as a complete failure in all areas. from the labour market were de-prioritised and got any support at all only after having very strong local Q12 Guto Bebb: The Welsh Assembly has pulled the advocacy. That clearly implies that the system of funding, and the outcome figures are pretty incentives to help people furthest from the labour disgraceful. Work Programme providers in my market is not seen as strong enough. I am not exactly constituency make the point time and time again that sure of the details of the pricing mechanism, but, if there is confusion out there, because there are so many you are getting a system where somebody who is projects funded by European money that target the clearly seen as going to require lots of support is being same client base and confuse the offer. de-prioritised, the system is not working. We are not Chris Johnes: That is the case and that is one of the in a position to make a direct comparison with the justifications the Welsh Government use for not impact of not being able to access, on the part of the allowing what they would call duplicated funding, but Work Programme provider, other support such as that the reality is that on the ground you have lots of funded by ESF, which might be available in areas with people who are benefiting from one level of support, comparable difficulties in, say, England. often funded through Welsh Government or ESF sources, which allows them to develop informal skills. Q9 Jonathan Edwards: Last month, the Court of When they move on to the Work Programme, they Appeal found that the regulations used by the UK cannot access that support, and Work Programme Government for their back-to-work schemes were providers in their evidence have made it clear that unlawful. How disappointed are you that in today’s they find that undermines their work. business in the House of Commons the Government are introducing legislation to second-guess that Court Q13 Guto Bebb: You made the point that the Welsh of Appeal judgment? Government did not want duplicated funding of Chris Johnes: Is that one more for you? It is about clients. Is the problem, therefore, with the Work sanctions. Programme or the Welsh Government not allowing Fran Targett: The question is more about sanctions. that duplication to happen? It did happen under the Given what we have found from the evidence of our previous programmes. clients about the sanctions regime and the way it is Chris Johnes: It did, and that was my point. I am not being implemented, to strengthen that potentially quite sure how that fits with Work Programme makes it even more difficult for those people. Much of providers saying there is duplication in support. what we gave in evidence, and are still seeing coming Guto Bebb: They are not being allowed to refer their through bureaux doors across Wales, is where good clients on to those programmes. cause or good reason, whichever we are going to call Chair: We probably have to move on, because quite it in the future, is not taken seriously. Whatever the a few people want to put supplementaries. legislative base, it is going to be very important not only that the base is fair but also that it is administered Q14 Geraint Davies: I do not mean to jump about, in a fair way. but Mr Johnes mentioned the example of a highly Welsh Affairs Committee: Evidence Ev 3
19 March 2013 Chris Johnes and Fran Targett skilled person going to Poundland. To what extent do Chris Johnes: Probably, the Work Programme you think there is a mismatch? I am particularly providers might clarify the exact payments-by-results concerned because the Government say there are systems, but I make two observations. One is that we 1 million more in jobs but we know there is no greater have heard plenty of anecdotal evidence of that kind overall output; growth is flat. There is a concern about ourselves. The second is that, in these kinds of highly skilled people going into low-skilled jobs with schemes, it is fairly common to have incentives that low productivity and then being out of the work would reward things that are seen as staging points to stream. Do you think this is a big problem, and how finding work, and therefore going to an interview or should it be confronted? Should there be a more securing a qualification might count as those. Once sophisticated filter or allocation, or is the incentive you have very strong financial incentives to hit those system wrong? kinds of targets, there is a risk that in a sense it Chris Johnes: The particular case we have seen— corrupts the target. others have given evidence on similar cases—suggests to me that the incentive system is problematic. If the Q18 Nia Griffith: You were referring to a Catch-22 incentive is purely about securing a job regardless of situation in response to Guto Bebb. I have a people’s skill levels, this kind of misallocation is constituent who was forced to go on the Work likely to happen because that is the way the incentives Programme in November because he had been are driving both the Work Programme provider and, unemployed for a year. He then had a fantastic to a certain extent, the individual in terms of the jobs opportunity to take up a Jobs Growth Wales place they can seek. On a wider level, from our programme with a company that was expanding. That could work, we would see people going into very low-paid genuinely have become a real job after six months, part-time work almost as a necessity, because in many but he was told he could not leave the Work parts of south Wales, as I am sure you are aware, there Programme. But the Work Programme is all about are not too many alternatives. trying to find a job. It seemed that he had been successful. He had done what he was supposed to do Q15 Chair: Would you accept that it is better to be in three months on that programme and was told he in a low-paid part-time job than no job at all? could not leave for two years. He is seeing a nice job installing windows, a practical thing to which he Chris Johnes: I would overall, but we are finding would be really suited, passing him by because he is cases where people, who were clearly on the path to told he cannot leave the Work Programme. Is there no developing higher-level skills so they could go on to escape? Is there no way that someone, having been more productive jobs, are being pushed to the very successful in the Work Programme because they have bottom of the labour market, when they might have done what they have been told—they have looked at got a better outcome for themselves if they had been local employment opportunities and found something, given a little more time to go into high-level jobs, and and the employer is eligible for funding from the a better outcome for the economy as well because it Welsh Government—can take that opportunity? is a better use of their skills. Chris Johnes: In the evidence in front of you from all the witnesses, you will see examples very similar Q16 Geraint Davies: There is a hierarchy of skills to that, and that would suggest it is not an isolated and jobs. Is there a danger that the high-skilled people problem. The difficulty here appears to be the join-up are displacing low-skilled people in low-skilled jobs, between Welsh Government-funded and Westminster- so not only do the highly skilled people not get high- funded programmes. That is emerging as a significant skilled jobs down the stream but low-skilled people problem, and one where we need to move towards the are being displaced by the high-ability people? greater levels of flexibility we had previously because, Chris Johnes: Almost certainly. One of the areas whatever the political arguments for it, we are most where some of this evidence is gained from saw a concerned about what happens on the ground and to big recruitment by a supermarket in the region; 2,000 individuals trying to find jobs and provide for their people applied for 600 jobs in one day. They all went. families. A whole lot of people from the projects we work with, who would have been able to take on those low- Q19 Nia Griffith: We can all understand that you skilled jobs, were just displaced by people who were must not double-fund things, but would there not be a in a much better position to compete for jobs, so we way of escaping from the Work Programme because are seeing that quite clearly. you have found something else and therefore leave another place for somebody else in the Work Q17 Nia Griffith: Is there such a thing as a payment- Programme? by-results scheme that is rewarding people being sent Chris Johnes: The technicalities of that would have for interview? I have had a number of cases where to be answered by somebody who is better informed people have been sent for interview for things they on the details of the Work Programme than I am. are clearly not suited to and are then turned away, or they are being told that there is a job on offer. They Q20 Chair: Ms Targett, do you know about that? turn up at a building site. Having made the effort to Fran Targett: I do not know the technicalities of that. get there and spent several hours waiting, they find It is important that I declare almost an interest. I sit that there is no job at the end of the day. Can you tell also on the committee for the Big Lottery for Wales. us whether this is a common occurrence, and why it Some of the funding from the Big Lottery is allocated might be happening? through our life skills project to getting people back Ev 4 Welsh Affairs Committee: Evidence
19 March 2013 Chris Johnes and Fran Targett into work, and we come across precisely this issue of Q24 Mr Williams: I want to turn back to where we people who are funded by that means not being started with Jonathan Edwards’ questions on those allowed to be mandatorily eligible for the Work furthest from the labour market and those with poor Programme. The Welsh European Funding Office literacy and numeracy and drug and alcohol problems. have made clear to the Big Lottery that it is the One of the evidence papers we read talked of a mandatory part of it that puts those people out of downward spiral in the livelihoods of the individuals scope, which means that sometimes, when they have involved leading to serious consequences in physical started on a programme and move into a mandatory and mental health. Far from having a scheme that is position for the Work Programme, there is that helping those groups, we are escalating difficult mismatch in the middle. That is a problem for people situations and making it more difficult for them to who work to that Big Lottery funding and obviously return to the labour market. You talked about for the Big Lottery as a funder. evidence. I know that a lot of it is going to be anecdotal, but can you elaborate a little more on some Q21 Jessica Morden: We talked earlier about the of the difficulties and problems those hard-to-reach Work Programme performing less well in Wales than groups are experiencing, and your experiences of in the rest of the UK. It is performing particularly them? badly for Welsh women. Do you recognise the picture Fran Targett: From our perspective, a large amount painted by Gingerbread? They did some research of the evidence we gave was around the way the recently that showed that single parents, who had been sanctions regime is implemented. We have a large promised personalised support, felt they were offered number of examples of people with health problems, very generic support. There was a failure to recognise, particularly mental health problems, where perhaps for instance, their need for affordable child care and they are not good at keeping appointments for all sorts flexible working, and that was one of the problems of reasons. It does not appear to be the sort of support with the Work Programme. they have been used to in other schemes where Chris Johnes: Absolutely, and we have seen evidence somebody is a support worker and reminds them that of that in England as well with the programme work they have an appointment and goes along. we do there. Running through some of this evidence, there is also an absence of personalised support for Q25 Mr Williams: Representing a rural many people. Unfortunately, we have seen a constituency, can I put in context some of the practical consistent failure on the part of both providers and difficulties people have? The very inflexibility of the the jobcentre from time to time to recognise the care system means that sometimes my constituents cannot responsibilities of single parents, sometimes to the get to appointments. They have not got their own point of urging them to undertake activities that would transport and are reliant on a non-existent public have been illegal in terms of leaving their children transport system. I do not want to open up the whole without support. This has been quite a serious failure debate about that, but it is a problem some of my of understanding of the needs of lone parents, who constituents have experienced, which again obviously are nearly all women. compounds their situation of helplessness. Fran Targett: We also see that in some of our Fran Targett: Absolutely. We have an example of evidence around the sanctions and how they are somebody in a rural area who was subject to sanctions undertaken. There is evidence from bureaux of following non-attendance at an interview. That was women being sanctioned when their reason for not linked to a health problem. The sanction is that their being able to be at a particular interview has been lack benefit income is reduced. When interviewed and of child care. Those things follow through from the asked, “Will you be continuing to seek work during sorts of things Chris is talking about. the period?”, he very honestly said, “I will find that very difficult because I don’t have access to Q22 Jessica Morden: One of the most common broadband. I have to go to the town to get on to a complaints I get is, for instance, that one constituent computer to do these things, and I haven’t got any last week told me he felt he had been parked in front money for the fare.” There is something in the of a computer and made to log on to a jobcentre sanctions regime that compounds the difficulties for website, and left there, and he was perfectly capable somebody who genuinely wants to seek work but of doing that in a library or at home. Is that something finds it very difficult. That is the sort of example that that has come through in the evidence? we are seeing, when the sanctions flow in, that makes Chris Johnes: It has not come through quite so it almost impossible for some of these people, clearly. Most of the specific things we get are from particularly those with health problems, to seek work, people who are either at the very back of the queue which is what they want to do and presumably what and furthest from the labour market or people who are we all want them to do. very close to it and are being pushed into Chris Johnes: For the long-term unemployed, many inappropriate jobs. I suspect this is happening to of the problems they are facing in terms of their people who are seen somehow as slightly more personal wellbeing and health are not new. The Work capable of undertaking learning for themselves and Programme does not create those problems; they have are caught in that middle group. been there for a long time. There are elements happening around the Work Programme that Q23 Jessica Morden: So in the hub group. exacerbate it, but there is complete lack of self- Chris Johnes: Yes. It might be the traffic light amber esteem. We spend a lot of time in our society valuing group rather than the green or red group. people by what they do in their job. If you are Welsh Affairs Committee: Evidence Ev 5
19 March 2013 Chris Johnes and Fran Targett completely outside that, you are outside the them to make sure those people do not fall through mainstream of society. If you are out there for a long the net. time, you get cut off. People increasingly feel that There are some issues in the guidance that we think they lose control of their lives. A description given in need to be clarified. While we absolutely accept that one of the case studies about people turning to drink it would be inappropriate for Jobcentre Plus, for as a result of that is not untypical. It is very sad, but instance, to advise a client about to be sanctioned on it is also interesting in terms of rhetoric used by other how they appeal or what they appeal about, we do parts of government who think that that is a cause think a person should be told, given that the appeal of being long-term unemployed, not the consequence, has to be made within five working days. People which people might want to reflect on. should be told that when they are about to be We have very clear evidence that it leads to deeper sanctioned, whoever gives that information to them mental health problems. Mental health issues are one first. Then, they have the opportunity to consider of the most common problems in what you might call whether the sanction is fairly applied, and they are the deprived estates, be they in city centres, in the able to appeal and can seek help. Those are two valleys or small town peripheries, and we see that slightly different things, both of which we think getting worse. One of the reasons we see it getting should happen. worse is that people’s level of hope with the current Chair: You seem to have sparked off a lot of interest levels of economic difficulty is declining as they see with this comment. growth in competition for jobs. The other thing that is making it worse at the moment is the reduction in Q28 Mrs James: To finish off this section and give the available levels of benefits from different sources, you both an opportunity to respond, you are working which is just squeezing people more and more. at the cutting face, so to speak; you are dealing with The final issue, which is probably more exaggerated people who have gone through these sanctions. What because of different types of political dialogue in effects do you think these inappropriately applied England than in Wales, is the level of labelling and sanctions are having on the claimants whom you come stigma directed at people who do not have work. I across, and how adequate do you think the would argue that that has become markedly worse Government’s hardship payments have been in these over the last few years. It means that people who are sorts of circumstances? out of the labour market feel even more embarrassed Fran Targett: The experience we are facing with the and shamed than they would have done before. That clients who are coming to this is that people are already finding it difficult to manage. Once the is not a new phenomenon; it is a worsened one. sanctions are applied, they and we are concerned about how they pay for their housing, fuel and food. Q26 Mrs James: I want to talk a little bit more about Don’t forget that some of these are people with sanctions. My first question is to CAC. In your families, so at this time people have to make a really evidence, which you have already alluded to, you talk difficult set of decisions about what they can afford to about sanctions being applied inappropriately. How pay, and potentially it gets them into debt, from widespread is this problem is, and why do you think having been just about managing their lives. it is happening? We are also seeing people whose health is impacted, Fran Targett: It is hard to know how widespread it because they feel a real loss of hope. They have been is. It has been a consistent inquiry across Wales. trying to get a job; something happens; they are Sometimes, it goes down a little by quarter, but it sanctioned; they do not have any money to pay for appears to be continuing in our figures. In our figures, their normal living; they feel that nobody cares, and it is not the biggest area of our inquiries, but for the our experience is that any of them who have mental individuals it impacts it is the biggest thing in their health problems certainly go downhill. lives. In our experience, this is not affecting a vast number of people because we know only about the Q29 Mrs James: Generally, do you think sanctioning ones who make it to our doors, but for those people it has a role in encouraging participation in the Work is a very serious situation and it faces a substantial Programme? number of people. Fran Targett: I find it very hard to understand sanctioning somebody who is already at the safety net. Q27 Mrs James: The DWP guidance to providers Maybe we need to think more carefully about sets out a number of steps they should take before a incentives rather than sanctions as a way forward. I participant is sanctioned. Do you think the guidance am not sure sanctions are an appropriate way. is being followed properly? There appears to be a lack of communication between the various tiers of the Q30 Chair: What sort of incentives? system. Fran Targett: I think it is more important that we Fran Targett: It is two things: there is probably poor encourage people to want to work. communication and in our experience in some cases poor administration. A client is told something but it Q31 Chair: How do we do that? is not recorded, and therefore it is not passed on to Fran Targett: For instance, some of Oxfam’s Jobcentre Plus; or Jobcentre Plus is told and it appears programmes—that is one example, but there are many it loses track of the information. Some of it is certainly others—to increase people’s self-esteem and put them administrative, and at DWP and provider level we on courses, which are not necessarily directly related want to see improved, better communication between to a job but enable them to become more confident, Ev 6 Welsh Affairs Committee: Evidence
19 March 2013 Chris Johnes and Fran Targett are the sorts of things that will incentivise people to possible avenues. Some statistical context to this is take the next steps. absolutely crucial. We can all pluck examples from the sky that give the impression that a scheme is either Q32 Guto Bebb: You mentioned the lack of brilliant or useless, and I do not think it takes us co-ordination and consultation between Work further forward at all. Programme providers and the jobcentre in terms of Chair: In a couple of sentences then, tell us what you sanctions. I am quite surprised by that. The Work would do if you were a Minister. Programme providers cannot sanction without getting Fran Targett: Far be it from me. One of the things I the jobcentre to agree. There would have to be a would want to come back to is the discussion we had degree of consultation, because the Work Programme earlier about making sure that all of the opportunities provider cannot do the sanctioning independently. to help those people are brought together and help the Fran Targett: I understand that. However, we have individual rather than have barriers between them. certainly come across cases where a client has been That is probably the first thing. In terms of whether told one thing by their Work Programme provider, this is endemic or just a few examples, I will get you only to find that that is not the outcome in terms of those figures. I do not know how large they are, but what Jobcentre Plus say. you are right: we see the people at the hardest end. I do not think it matters that it is a few people. If Q33 Guto Bebb: But that is consultation. anyone is suffering because of these issues, we should Fran Targett: When challenged about that, there is a be concerned about it, because we are talking about lack of communication between the two organisations very vulnerable people. to help that client to overcome the situation. That is Chris Johnes: Can I just make two quick points in where, from our perspective, the lack of relation to your question? First, the incentive system communication applies. We would also say that there in the Work Programme needs to be right, to make are places where it appears that there isn’t clarity sure that people who are furthest away from the labour about a particular decision. We have several examples market get the right kind of support. Whatever the where somebody is expected to be at both a Work balance is at the moment, it is fairly clear that it is not Programme interview and something that Jobcentre working. Secondly, we need to have greater access— Plus have asked them to go to. There appears to be a I am not so fussed about the providers; I am worried bit of a mismatch between the two organisations about about people—by people in need of the full range of which of those takes precedence in terms of sanction training support to get it. It clearly happens in some or not. The client is told, “If you come here, you’ll be places and not in others. fine,” whereas that is not the case. Those things need I would flag up—this may be a controversial point to be cleared up. given the way public services have gone in the UK over the last few years—that you have a mixed market Q34 Guto Bebb: You said that a lot of people are here. Some people are providing the service for coming through. I am sure you have the figures. If this commercial gain, the Work Programme providers and is a big issue, surely you would have some figures some of their voluntary sector partners, and others for for us. non-commercial gain are being funded in this context Fran Targett: I refer back to our evidence that gave by the Welsh Government. That creates very unusual you a picture of the numbers of clients we are dealing dynamics at the interface between service providers. with in terms of benefits and tax credits. That is one of the tensions that has probably not been Guto Bebb: I am concerned specifically with explored and one we have certainly encountered. sanctions. Q37 Geraint Davies: Do you think the sanctions in Q35 Chair: If you have got those figures, it would place will be more effective after the introduction of be helpful to have them. the empty bedroom tax, the withdrawal of council tax Fran Targett: I have not got those figures here today, relief and the freezing of benefits? In other words, the but we can give them to you. people at the very bottom are being squeezed more, Chair: That would be very helpful. and these sanctions are squeezing them again. What do you think will be the impact of this double Q36 Simon Hart: I have an extension of what Guto squeeze? Will it be helpful or will it drive people into Bebb asked. I had a quick glance at your written despair or crime? What do you think? evidence in both cases to make sure I had not missed Chris Johnes: I cannot see how it would be helpful. something. I just want to do a role reversal here, for The examples of the sanctions given in the evidence two reasons. First, I am not clear yet what your from the CAC have clearly been people who in one solutions are, and how they would be paid for, given way or another were trying to comply. They may not the numerous examples of failures of the system that have been able to comply properly because they did you have both given. If you gave us just one not have proper information. We work with people paragraph, putting yourself in the Minister’s shoes for who do not even understand they can go on to the a minute, and told us how we should be doing it, that Work Programme, mainly because of language would be important. As to the actual examples you problems but sometimes it happens because of mental have given, it is really important to know whether health problems as well. I am not clear how increasing these are the exception or the rule. If your work load the financial squeeze on them is going to make them is anything like ours, the people who end up in front look harder for work, because most of them are of us tend to be those who have exhausted all other looking to the best of their ability already. It is just Welsh Affairs Committee: Evidence Ev 7
19 March 2013 Chris Johnes and Fran Targett going to put them in a more dire financial situation. In there are people who need support workers and do not many cases it will mean, frankly, that social housing have them. Whether putting this money into creating providers will take up the slack and make bigger jobs is a better way is beyond our evidence. losses, because they will use eviction as the very last Chris Johnes: I am very loth to support resort. It assumes that there are people who are not institutionalisation unless it is absolutely necessary. trying at the moment because of the generosity of the benefits system. Those people may exist, but I do not Q39 Nia Griffith: I am not advocating that; I am just see any evidence of it, and we work with a lot of very referring to some of the people we are dealing with poor communities. and the types of problems they have. Fran Targett: I would agree with that. We are seeing Chris Johnes: The levels of support are limited and people who already have sanctions imposed on them probably will get worse as local authority funding is having to make choices, for instance, about paying restricted. Like Fran, I feel that to a large extent the their rent, so it cannot be a good thing. We also have issue of private sector involvement is outside our examples of people in shared accommodation where, remit, although we have some examples of projects for instance, a letter has gone astray and that means where we work directly with employers and which they have been sanctioned. We are moving shared often involve people who start off a long way from accommodation up to 35, so a wider group of people the labour market. Our outcomes on those are at least will be impacted by that. I do not see any of this as good as the Work Programme, although we are getting better. working with employers who are willing to engage with people who initially have quite low skills. Q38 Nia Griffith: Thirty five years ago, some of the people you are seeing now would have been in Q40 Geraint Davies: I just want to ask whether the institutions. First, do you think they are getting providers are providing coaching on self-esteem, adequate support in order to respond to a sanction? breaking habits and these sorts of things. Is Secondly, given the terrible success rate of the Work appropriate training provided? Programme, which is 3%, would it not be better just Chair: A quick yes or no. to give the money to employers to create more jobs, Chris Johnes: You have not finished your question. and scrap the whole thing? By whom is the appropriate training to be provided? Fran Targett: From the point of view of individuals, our evidence showed that a largish number of people Q41 Geraint Davies: By the Work Programme who were facing the sanctions regime have mental providers. health problems, not all of them diagnosed. Some of Chris Johnes: From what we have seen in the people them were self-diagnosed. There is still stigma around we work with, no. mental health and people are unwilling even to go to Chair: Thank you both very much. their GPs to talk about it. Some of them had support workers; some of them did not; it varied. Clearly,
Examination of Witnesses
Witnesses: Kirsty McHugh, Chief Executive, Employment Related Services Association, Marcella Maxwell, Director of Wales, Working Links Wales, and Chris Peel, Managing Director, Rehab Jobfit, gave evidence.
Q42 Chair: Thank you, Ms Maxwell, and Mr Peel. I a new entrant, new to Wales as well, the first year has understand that you have come in very much at the been a steep learning curve. We are implementing a last minute. new model. We deliver through a managing agent Chris Peel: We are a last-minute replacement due to model, so we do not directly deliver services the norovirus affecting my colleague, unfortunately. ourselves. We deliver through 12 end-to-end Chair: We are a friendly bunch on the Welsh Affairs subcontractors, most of which are from the third Select Committee. Don’t worry about that. I start off sector, or public sector. It has definitely taken us some by calling on Simon Hart. time to embed our model and get it working to how we want it to work. There is no doubt that the first Q43 Simon Hart: First, the DWP said that the Work year was a challenge. Programme in Wales was performing worse than the Referral numbers in the early months were extremely overall UK average and yet, if I read your evidence high, which impacted our original assumptions about correctly, your own interpretation of events is slightly different. It would be helpful to get clarity on the case loads. When you look at the overall job outcome numbers. Secondly, in theory, backed up by numbers, targets we were set, in effect, to move somebody into it would seem that the numbers are worse for women sustainable long-term employment, for us to achieve than men. I do not know whether you have any light our targets we need to sustain people in work for more you can shed on that. than six months. That first year represented only nine Chris Peel: I represent Rehab Jobfit. We are a new months of operation. We had a very short time to provider to the Work Programme. We are a joint implement a brand new model, and building those venture and third sector-led partnership between the strong local employment links has taken some time. Rehab Group and Interserve. From our perspective, as However, since the national statistics were released, Ev 8 Welsh Affairs Committee: Evidence
19 March 2013 Kirsty McHugh, Marcella Maxwell and Chris Peel which go up to July 2012, we are seeing month-on- across the UK, so obviously Wales is part of the remit. month improvements in our delivery, and we remain The question whether there is a regional or national confident over the duration of this contract in our picture in terms of performance across the piece, or ability to perform to our targets. whether ESF still has a role to play in relation to that, is an interesting one. The figures that the Government Q44 Simon Hart: Forgive me for not knowing the put into the public arena are very old; they tell you answer, but what are your targets? about our performance only up until January 2012, Chris Peel: The overall target nationally was set at a when people had started a job. We found that 207,000 job outcome rate of 5.5%. people had got into work by the end of September. Marcella Maxwell: It was 5.5% and we were just We are going to release new data in the next few below the average. We came in at 3.39% and the weeks, and I am pretty certain that they will show that average was 3.5%. It was the first year and was the about 300,000 people will have got into work across start-up phase, so it is very much a snapshot in time the whole of the UK. of what is a long-term programme, because people are In terms of our job start figure for Wales, at the end with us for two years. We do not expect to get a job of September, 10,000 people had entered work out of outcome for six months. That is when it is recognised 50,000 people who had been referred, so at that point as a performance measure by DWP. It is more helpful about 20% were getting into a job. That is pretty much to look at performance in terms of what we would call in line with the rest of the country. I do not think from cohort. That means the people who joined the that point you could draw strong conclusions about programme when it first kicked off in June 2011. whether there is a Welsh element coming through. Where are they now? We can give you some figures. That said, if you look at the geography around the Our job entry rate, in terms of people getting into UK, the old industrial areas are—surprise, surprise— work, not the job outcome—that is the sustainable generally doing a little worse than the south of performance—now stands at 29%. That will give you, England. The Department for Work and Pensions says hopefully, a sense of the trajectory. currently that it does not think the local economy has Chair: Both of you are giving very full answers. The an impact on the ability of the Work Programme to only thing that slightly worries me is the time. perform. We just do not think that is the case, but in terms of Wales, ESF is definitely an issue. Q45 Simon Hart: You have described in your written Marcella Maxwell: The Work Programme is really evidence the particular challenges that Wales presents. designed to be integrated with the funding streams of Is there a regional or county-based element to that? If other programmes. There is no doubt that, if it is not, so, how do you adjust the model to account for there could be an issue. As the two prime providers perhaps one or two unique features of the country? of the Work Programme in Wales, we work very Chris Peel: In Wales, structurally one of the biggest closely with the Welsh Government and the Welsh constraints we face is our customers not being able to European Funding Office through the joint access ESF-funded programmes. That differs from our Employment Delivery Board, on which we both sit, experience in England. We also deliver in England. If I compare the two areas, that is a big constraint on us. to try to shape some of that for the future round of the A lot of ESF-funded programmes complement what programme. There is a new round of ESF funding in we do on the Work Programme. It is not about 2015, and we would hope that the Work Programme duplication of funding but about complementary could be seen as the core employment programme support, so mental health awareness, drug and alcohol with which other employment programmes could be support and basic skills training. There are a number aligned and funded through European moneys. That of funding streams through ESF that are really would add huge value in terms of not just the complementary to what we do. The case referenced programmes themselves but in enabling support of earlier related to Jobs Growth Wales is a good people on the ground, all of whom we are all trying example of where that restriction has a major impact to help because they are the same people. on us in Wales. Chair: This is an interesting issue. Q47 Jessica Morden: On the European Social Fund and other publicly funded courses, if Work Q46 Guto Bebb: To what extent do you believe that Programme participants were allowed to access these the unwillingness of the Welsh Government to allow other publicly funded courses, does it mean that you clients from the Work Programme to access ESF would forgo your payment for them? programmes is responsible for the under-performance Kirsty McHugh: The Work Programme was designed so far? Possibly, that is no longer the case, and I hope to combine funding streams around the individual: the that is no longer the case. Do you think that has had stuff local authorities fund and the rest of UK ESF an impact? Work Programme providers in my funding. It was always supposed to be about constituency have argued that that is a huge restriction combining funding streams around the individual. The on their ability to deliver the programme. Is that a fact that public sector retrenchment, particularly local political decision by the Welsh Government? government cuts, has had an impact across the piece Chair: Perhaps we can have an overview from Ms is affecting the ability of the Work Programme to McHugh on that as well. perform. Specifically in Wales, the fact that the Welsh Kirsty McHugh: Indeed. I apologise for my slight Government took a political decision not to allow ESF lateness. I had to force my way into the building. I run funding to be used takes away some of those the trade association for the welfare-to-work industry building blocks. Welsh Affairs Committee: Evidence Ev 9
19 March 2013 Kirsty McHugh, Marcella Maxwell and Chris Peel
Q48 Jessica Morden: All I am asking is: if someone made representations to WEFO through the Joint goes on a European Social Fund course and are Employment Delivery Board. We were asked for any successful in getting work, does it mean that you still examples and case studies, not just Job Growth Wales get paid the same money? but other ESF funding examples, where people had Marcella Maxwell: They won’t be on that course, fallen between the two. because once they are eligible for the Work Programme they are no longer eligible to access ESF- Q52 Chair: Is Jobs Growth Cymru a placement or funded programmes. a job? Marcella Maxwell: It is a job for six months; it is a Q49 Jessica Morden: But, if you are arguing that subsidised job that the Welsh Government pay for they should be, what happens to that person in terms through an employer. of their relationship with you and your payment? Chris Peel: Being a provider of the Work Programme, Marcella Maxwell: In terms of designing it? That is this is a good example where it would certainly benefit why it is very important to identify where the us if there was greater collaboration between different additionality would be. What is the funding paying for arms of government. We have a contract where a that which is adding value to the Work Programme? number of our customers are mandated to us for two A good example could be child care. That programme years. We have to provide services against our would be designed around child care outcomes in contract based on that mandate. That is a particular terms of European funding; the employment outcomes example that needs to be escalated beyond us as Work would be down to the Work Programme. Programme providers, because it is a policy decision. Chris Peel: We have a core customer journey that we deliver through our 12 end-to-end providers. We set Q53 Geraint Davies: What is being said is that very clear standards about the types of services that people are, by its very nature, being locked into these must be provided to tackle holistic problems. It is things for two years when they could be doing proper certainly not about us abdicating from our core jobs. It seems to be counter-productive. responsibilities of delivering an holistic personalised Chris Peel: Our focus is on moving people into work service, but it is about that join-up and getting value and trying to support them in sustainable employment out of the other publicly-funded streams. We would as quickly as we can. be more than happy to show the Committee our Mr Williams: I was going to ask you how you rated standards that clearly define that customer agenda. your performance to date, but you answered it earlier. We look forward to the renewed figures in the next Q50 Nia Griffith: Can I go back to the case of few weeks to make our judgment on that. In the Ashley Jones that I brought up with the other previous session, the Chairman invited the witnesses witnesses earlier? We all know that Jobs Growth to sit in the ministerial chair and paint a picture from Wales is open only to young people who have been there. I am going to give you the proverbial bit of out of work for some time. He was out of work for blank paper. If you were starting again, what would some time, so he was made to go on the Work you do differently, if anything? Programme last November. Then an opportunity came Kirsty McHugh: There are real lessons to be learned up. He sought it because he was looking for work, as from the commissioning of the Work Programme. he had been told to do, on the Work Programme. This They have to be learned for future programmes, was an ideal opportunity. A company was expanding, including the Ministry of Justice and the outsourcing and there was an opportunity for six months under the of probation; and there are lessons from the live Jobs Growth Wales programme with the prospect of a running of the Work Programme as well. The very real job at the end. He is told that he cannot leave commissioning and set-up of the Work Programme the Work Programme and he has the best part of two was extremely rapid and there has been a range of years left. He does not feel he is learning anything repercussions, in particular around supply chains. new, when there is another exciting opportunity. What Government get into power; they scrap all the existing can we do about this? Why can’t he be released from welfare-to-work schemes; and they set up a work the Work Programme and transferred? We do not want programme, which essentially is a pretty well- double funding; we just want him to be released. Why designed scheme. However, the commissioning for can that not happen? that was very quick. The invitation to tender went out Kirsty McHugh: What does he want to go to? just before Christmas and bids had to be in by 14 February. That did not allow enough time for proper Q51 Nia Griffith: He wants to start on Jobs Growth conversations with potential subcontractors to solidify Wales, which is a real opportunity and a chance to use supply chains. That led a lot of organisations—small his skills in which he is quite competent. He would charities—to feel, “I had these indicative like to be allowed to leave the Work Programme, conversations; they didn’t turn into contracts, and I which he was forced to sign up to in November. Why was used as bid candy.” A lot of the concerns about can’t he leave instead of staying there for another 18 bid candy are around the rapid procurement that was months? just too fast to allow those proper conversations. Marcella Maxwell: We cannot comment on an The programme went live in June 2011 with a big individual issue, but we have had numerous similar launch, but it was not fully up and running until the examples—not so much people wanting to leave the beginning of the following year. There was a period Work Programme but saying there is a Jobs Growth of six months of the most awful TUPE flows, with Wales opportunity and a dilemma there. We have 10,000 staff moving between providers, contracts Ev 10 Welsh Affairs Committee: Evidence
19 March 2013 Kirsty McHugh, Marcella Maxwell and Chris Peel being signed and offices let, but performance Chris Peel: Not through formal procedures as such. expectations were at 100% go from day one. There was a six-month start-up as well, and that was not Q57 Jessica Morden: You mentioned people who built into it. fail work capability assessments. How easy is it for The third thing I would flag is that we are very much them to go out and find work in your experience? in favour of payment by results, but the economic Given that 40% of people who are deemed fit for work backdrop has been very different from that expected. win on appeal, are you seeing people you clearly think The OBR was predicting 2.6% growth at the time the are not fit for work? Work Programme was let, and in 2012 growth was Kirsty McHugh: Absolutely. There are some people only 0.2%. That had a big impact on providers at all being found fit for work through the work capability levels. There was no ability to adjust for that in any assessment who should never have been found fit for shape or form, and there is far less money in the Work work, so that is a real problem. While they are Programme overall than predicted. To go back to your appealing, inevitably they do not engage with the question about payment for outcome, there is not programme. Quite a lot of providers out there, enough money in the Work Programme to pay for particularly subcontractors and charities, will provide everything; there just isn’t, so you have to combine support for that individual to appeal the WCA, the work streams around it. Those would be the three because that is right for them. It is a bit of a sensitive things I would flag. area. As an industry, you do not want to be accused Marcella Maxwell: From my point of view I agree of parking those customers, but the WCA in its with all of that, but for the Work Programme current form is not good enough. particularly in Wales sitting down and designing that around where funding streams can be aligned is Q58 Jessica Morden: Can I ask the same question absolutely critical, recognising also that there are of Working Links and Rehab Jobfit? economic challenges. Unemployment in Wales still Marcella Maxwell: We get some instances. We get a sits at 8.6% compared with 7.8% in the UK. lot of people who have been assessed as fit for work, According to the last set of figures, in Wales, or the prognosis is that they will be fit for work in 12 unemployment increased by 6,000 at a time when it to 18 months’ time. Clearly, they have a number of was improving in the rest of the UK. There are some barriers when they come to see us. We treat everybody real economic challenges. If we are designing it again, as an individual, so when they come through the door we need to look also at local areas; it is not just one we do not look at their benefit type; we just assess size fits all. them based on what needs we think they have. Based Chris Peel: Customers furthest away from the labour on that, we design a plan around what support they market have multiple barriers to employment, such as might need. For some people with very severe issues, chronic health conditions—for example, people who the support can start off by looking at things like have a 12-month work capability assessment confidence building and some volunteering, just to get prognosis. I would like longer to deal with them people used to engaging. Quite a lot of people have beyond the 104 weeks. For the hardest-to-help not been on active benefit before; they have been on customers, a slightly longer time frame would be inactive benefits and they are moving into a transition. beneficial to us. So we recognise that. Part of what we do in our delivery model is trying to address those issues. Q54 Mr Williams: I am glad you said that, because that was one of the concerns of many of us. I alluded Q59 Chair: How personal are you willing to be? I in my earlier questioning to the spiral of decline that have had people in this situation where I just know people get into, which does necessitate more time. within seconds they will not find a job or be offered The next question is a practical one. How often does one. Theoretically, they are probably physically and DWP inspect your services and ensure that minimum even mentally capable of it, but, for reasons I will not standards are being delivered? What does it involve? spell out here, you just know that no employer would Chris Peel: We have a set of 16 defined minimum ever give them a job. What do you do when you get service standards, which we think are pretty people like that? Are you willing to talk to them about prescriptive. Part of those standards is about dress and the way they react to people? preventing things like creaming and parking. In our Marcella Maxwell: Yes. We deal with everybody as programmes, our subcontractors must see every an individual, and that is not uncommon. There will customer on a one-to-one basis every two weeks, for be people coming through our door with whom we example, and we are then held to account against have some very basic things to address. They will be those minimum service standards. We have regular very nervous; they might not have been used even to compliance audits conducted by DWP into our ability engaging. Part of our supply chain skill set is talking to deliver to those standards. We have monthly to people who have those sorts of needs and issues compliance monitoring audits conducted by DWP. and trying to address them. We would never say, “We cannot do anything to help you.” We think we can. Q55 Mr Williams: They talk to clients. Chris Peel: One of the things on which we are being Chris Peel: Those audits are based on the evidence far more proactive with our Jobcentre Plus colleagues that we collate within our audits. We talk to our is warm handovers. Our knowledge of the customer customers. does not begin once we have attached them but while they are still in the Jobcentre Plus process. We can Q56 Mr Williams: But DWP do not. begin to provide support around it. Welsh Affairs Committee: Evidence Ev 11
19 March 2013 Kirsty McHugh, Marcella Maxwell and Chris Peel
Chair: I think we have a question on that. It was a groups in Wales and each has a slightly different good phrase. payment attached to it. For instance, those deemed most hard to help ultimately would have the biggest Q60 Guto Bebb: On Jobs Growth Wales, can you payment attached, so it recognises that there is more clarify the extent of the subsidy available to an work to do with people who will need more support employer in comparison with what the Work and builds in that incentive. In my view, it does not Programme can offer? Jobs Growth Wales is a six- encourage people to park or put people aside, because month period, isn’t it? it is in all our interests to do that. Marcella Maxwell: It is a six-month period. I do not Chris Peel: The payment differentials themselves do have the exact figure in my head, but I know it is not cause us an issue. The amount we get paid is not more than the equivalent of the youth contract, which an issue. For me, it is about making sure that people’s is incorporated within the Work Programme. needs have been appropriately assessed before they get referred to us; that we have stronger processes in Q61 Guto Bebb: It is more than the Work place for warm handovers; and sometimes just Programme. referring people by benefit classification type does not Marcella Maxwell: Yes; it is about double. necessarily reflect the challenges that those particular individual customers may face. Q62 Guto Bebb: That does create a degree of Kirsty McHugh: To give you a national figure, for competition perhaps. people coming through on the work programme, generally about 31% have self-declared health Marcella Maxwell: Potentially, yes, and also for us it 1 can cause confusion with employers. They do not conditions . There is a higher number who have really care whether it is Welsh Government or UK low-level depression and so on and are not self- Government-funded; they just want somebody who is declaring. Therefore we are looking at substantial ready for work. Part of our sell in our offer to needs here. employers is to try to explain and unravel some of One other thing to throw into the pot is that for those that. That is another reason we need more clarity here, people who have a lot of needs it will take the full because it is very helpful to employers as well. two years to get them back into work. There is no point in pretending otherwise. Therefore, it will take Q63 Guto Bebb: On the work capability assessment, a while for those figures to grow in terms of job I would refer the Committee to the PAC report on outcome. The first jobseekers in the Work Programme Atos Healthcare. I agree entirely with Jessica Morden started in June 2011, and they will be coming to the on that point. In terms of those hardest-to-reach end of their two years of support in June 2013. There clients, the accusation being made is that they are not is nothing in place after that, so at the moment they getting the support they need. As providers in Wales, will just go back to Jobcentre Plus. You have been how would you respond to that accusation? building and supporting them as a provider and then Chris Peel: We disagree with that. As part of our they are just dumped again. That might be something model as a new market entrant, particularly given the you want to have a look at. heritage of one of our shareholders, the Rehab Group, which is all about working with people with Q66 Mrs James: Mr Peel, you mentioned warm disabilities, we deliberately chose a supply chain with handovers. The initial DWP evaluation stated that strong first sector representations and providers that there were too few warm handovers going on. Why have a good track record of delivering a range of is that not happening? Do you think it is a realistic holistic services to customers. That is what we are aspiration, given the amount of work and case loads very focused on providing. Our model is based on that you have to deal with? getting to understand the customer as quickly as we Chris Peel: I was not around in Jobfit at the start of can in the programme, the multiple barriers they face the programme; I started in October, but in the time I and putting in a long-term package of support to have been in the organisation I have been really overcome those barriers. That means that sometimes impressed by the ethos of collaboration among you put job opportunities to one side to tackle other ourselves, Jobcentre Plus and Working Links. For issues first, because it is about sustainable example, my teams have monthly meetings with employment. Jobcentre Plus to work through the practical ways we can get better integration between what we do. There Q64 Guto Bebb: In terms of the financial incentives, are also quarterly forums with the director for could you give the Committee an idea of the Jobcentre Plus in Wales, which we and Working Links differential for the hardest to reach? I do not think attend, to discuss common themes about how we get there is any easy client in the Work Programme better practical collaboration in place. The intent is because all have been unemployed for at least nine absolutely there; it just takes time sometimes to bed months, but differentials would be important. down those relationships and get them working Marcella Maxwell: There is a differential of effectively. Wales is a very large area covering three payments. It does get a bit technical and complicated. Jobcentre Plus districts, with a very large branch network. We have over 50 locations as well, and, Q65 Chair: You have submitted evidence on that. particularly with the subcontractor model, we are Marcella Maxwell: I have got the exact figures, but working hard on getting better links between our there is a differential of payments attached to the 1 DWP figures show 267,540 out of 878,000 referrals (31%) different payment groups. There are eight payment are registered as having a disability. Ev 12 Welsh Affairs Committee: Evidence
19 March 2013 Kirsty McHugh, Marcella Maxwell and Chris Peel subcontractors and individual branches at local level, My Way Up, which we have developed over 10 years but the intent is there. of delivering similar programmes. That assesses not just somebody’s skills needs, which would be one Q67 Mrs James: Do you think those meetings are thing, but also their health issues, whether they have enough to assure things like quality of the service? any confidence issues, or even motivational issues, Often information can be out of date by the time you drug and alcohol problems—everything. That will meet. Things happen very quickly. Do you have a inform what we call the work plan for the individual mechanism by which you can consult in between and the type of interventions, whether they are those specific set times? delivered by us—because we deliver on the ground Chris Peel: We are now doing a number of practical ourselves in Working Links—or through specialist things to address those very issues, such as co- provision. If, say, somebody has drug and alcohol location. If you take Neath and Cardiff, for example, issues, for instance, we would refer them. We work we have made co-location arrangements where our with very good organisations—for instance, Salus— advisers will spend a day in the jobcentre to put in across Wales. We would first refer somebody to those place that better on-the-ground intelligence2. interventions, because we know that before people can Marcella Maxwell: I would echo that. The more think about work in those instances we need to information at the point that somebody is transitioning address other issues. They might have housing issues; from Jobcentre Plus to the Work Programme the better they might be ex-offenders coming out of prison. We the outcome will definitely be. For the individual, have a huge number of issues. also, it can be quite frightening. If you are going into Chris Peel: Our model is largely similar. It is slightly another programme, you might not understand it; you different in so far as we are a managing agent and might have been on other programmes before. We have 12 end-to-end subcontractors. We have passed have worked very hard to develop that with Jobcentre on elements of the black box to our supply chain Plus. I have to echo that we have a very good partners, but we manage the quality of what our relationship with Jobcentre Plus in Wales. For our supply chain partners deliver through our minimum ESA customers, who are the ones with some of the standards. All customers must be seen within two most challenging issues, we are going to trial weeks at a face-to-face welcome interview. That something in Cardiff, for instance, where we work welcome interview has a diagnostic that is there to with Jobcentre Plus at the point when somebody is diagnose their holistic needs, and then it is about an coming over to us so that we can explain together appropriate action plan and course of interventions to what it is they are going to expect on the Work address those multiple barriers. Beyond our 12 end-to- Programme. It is also good for Jobcentre Plus end subcontractors, like Working Links, that includes because, after all, they do not always know what it is using a number of voluntary specialist interventions we are delivering. The more involvement we have as well. To date, since we started in Wales, we have with each other the better the outcome for the people used 52 different third sector partners beyond our tier we are all trying to help. one suppliers to support those customers, typically on things like mental health issues and drug and alcohol Q68 Mrs James: It sounds as if you are confident support, so in that regard it is a very similar approach that you are getting enough information at the point to Working Links. of handover to personalise the service for the individuals or participants. Q70 Nia Griffith: We have heard evidence about Marcella Maxwell: It is getting better. It is definitely sanctions being applied inappropriately. What would work in progress, but it is a lot better, and there is be your comment about the way that sanctions certainly the intent to work together. operate? Is there confusion between yourselves and Chris Peel: We have 50,000 customers on the Jobcentre Plus? Are there better ways of working the programme in Wales. It would be very difficult to system? What would you suggest as reforms? have processes in place where you get all the Chris Peel: My view is that a large proportion of our information on every customer at the point of referral. customers have been mandated on to the programme. It is about identifying those customers most in need We are then responsible for informing Jobcentre Plus and making sure that there is appropriate if those customers are not participating against the communication at the time of referral. interventions that have been set out against that mandate. That could be mandated activity; attending Q69 Mrs James: Can you tell us a little more about job interviews; being proactive around job search, and how you identify people? If you are not identifying so on. by benefit type, how do you determine the service that individuals require? Q71 Nia Griffith: Do you think they know exactly Marcella Maxwell: When they come to Working what they are supposed to be doing? Are you saying Links we carry out an assessment process. At the that they are landed on you without a chance for you point they are referred to us—what we call to explain to them exactly what your expectations are? “attached”—they are allocated a personal adviser, Chris Peel: Our approach is through regular one-to- who, in most cases, will be with them throughout the one support and dialogue with the individuals. We two years, so they get to know them and build that take fully into account mitigating circumstances, like really important relationship. We then undertake an sickness and reasons why people cannot attend. We assessment. We have quite a sophisticated tool called properly explain the sanction process to our customers 2 Note by witness: commenced in April 2013 as well; that is explained to them properly by Welsh Affairs Committee: Evidence Ev 13
19 March 2013 Kirsty McHugh, Marcella Maxwell and Chris Peel
Jobcentre Plus. We are not making decisions on competitive labour market, which this is, sometimes whether benefits should be sanctioned, but in a where people who are recently unemployed are mandated programme we have a responsibility, if competing for the same jobs, we are working in a appropriate, within the guidelines set for us to refer hard environment. that on to Jobcentre Plus for a decision. Q74 Chair: To be a bit cheeky, how many people Q72 Nia Griffith: Do you make any allowances for have you taken on under your own scheme in difficulties of access? We have a lot of people living Working Links? in quite isolated places and it is difficult for them to Marcella Maxwell: In the past we have had a number get there, particularly if someone in the family is sick, of people. Recently, we have had some people from or something like that. the Work Programme—not many. We have had people Chris Peel: That is a very big consideration in a who have been our customers, as we call them, and number of areas and regions within Wales, and that is we have helped into work. All the people who work absolutely taken into account. I do not have the for Working Links in Wales are from communities in specific numbers here, but in terms of volumes we are which our clients work, and some of them are talking about a minority of referrals for DMA customers. sanctions. Our approach is to build a strong, one-to- one relationship with the customer, which is a two- Q75 Chair: Mr Peel, have you taken on anyone from way process. They are accountable to us; we are the Work Programme? accountable for what we provide to them, and we set Chris Peel: Yes, we have. Being a managing agent that out very early on in the programme. model, we have very thin employment. We have a contact centre in Swansea, which has taken on Q73 Geraint Davies: I want to ask a very quick customers. We have four local authority supply chain question about people coming off employment and partners, and there have been some really good support allowance who have particular needs. You are examples of job creation back into the local authority. paid to try to get them up to speed to work. Is there a case to be made for the employer to be given some Q76 Jonathan Edwards: One of the criticisms of the sort of subsidy as well? At the margin, employers may Work Programme and its successor schemes is that, be facing a choice between someone who has come essentially, it undercuts or undermines paid off ESA and has a history of disability, or whatever, employment. How would you answer those and someone who perhaps has not. Even with your criticisms? best efforts, from the employer’s point of view, it still Kirsty McHugh: The Work Programme is not about does not add up. Do you think there is a case for that? job creation as such. It is not like the Future Jobs Fund Kirsty McHugh: It is an interesting question. We do or similar programmes along those lines. It is not the not want to label people and say, “This is an ESA case that it undercuts other programmes or schemes jobseeker and therefore they are more difficult to because the providers get paid only if they get people employ.” In selling that individual to an employer, you into work. I do not think there is an element of conflict are always talking about what they can do rather than at all. what they cannot do. However, the labour market is as it is. By and large, people on employment and support Q77 Jonathan Edwards: I am thinking of it from allowance will have significant barriers to the the perspective of an employer, because if you take workplace. At the moment, there is really nothing in people from the Work Programme you do not have to place to help the employer, though under the Work pay wages, do you? Programme providers do a significant element of in- Kirsty McHugh: Yes; you do have to pay wages. work support. The majority of their payments are around sustaining people in employment. That is the Q78 Jonathan Edwards: At the same level. way the programme is structured. Kirsty McHugh: Yes. There is no subsidy for the Marcella Maxwell: From our point of view, it is about employer taking on somebody from the Work having that relationship with the employer first off and Programme, unless it is somebody under the Youth the employer knows that when we do place someone Contract. If they take on somebody aged 16 to 24 via with them we are not handing them over and handing the Work Programme, the Youth Contract subsidy is them off. I call it a tripartite relationship among about £2,000 and something a year. It is not very ourselves, the person we are getting into work and the much, but it offsets the national insurance costs. That employer, and it is very important for us. was the idea of it, but there is otherwise no subsidy We talked earlier about displacement, which is quite for employers to take on somebody under the Work an important point. There are a large number of entry Programme. level jobs that customers with barriers will be happy to access and are suitable for them. If you get Q79 Jonathan Edwards: There is evidence at a UK somebody the right job, the employer is very happy level that subcontractors are not receiving the referrals with that person. We do not want to label people, but they were expecting under the scheme. What is the if they have particular issues, yes, we will work with situation in Wales? the employer to say, “Okay, they might have some Chris Peel: In our model, we have 12 end-to-end particular health issues. Can we help you to subcontractors. They have received their full accommodate that?” We work very closely and it is allocation of referrals based on the referral volumes quite successful, but there is no doubt that in a that we receive. We segment our supply chain by Ev 14 Welsh Affairs Committee: Evidence
19 March 2013 Kirsty McHugh, Marcella Maxwell and Chris Peel geography and align providers to Jobcentre Plus, so Q81 Geraint Davies: Are there areas of England that we do not have competition within our supply chain. are particularly successful in terms of the Work All our partners have received their referrals. On top Programme and the like where there can be cross- of that, to date we have used 52 additional specialist referencing and sharing of best practice in Wales? providers as well in the services that we provide. Kirsty McHugh: There is good practice out there. The Marcella Maxwell: Working Links have five industry is a very collaborative one, which is providers where we subcontract entirely the interesting for me given that it is supposed to be a programme in geographical areas; they are delivering black box and people are in competition with one our model in different parts of Wales. Their referrals another. What you have seen from Rehab and would very much reflect the referrals that we get. Working Links is a lot of collaboration, even though They get exactly what we will get proportionate to they are competing. At the moment, we have a that area. Underneath that, we have about 60 other working group looking at employment and support subcontractors who deliver a range of specialist allowance customers and what best practice is around support, which could be nationally across Wales—for them, because that is an area where the whole industry instance Salus for mental health—or they could be needs to improve. providers who deliver things for what we call spot purchase. We would buy something to deal with the Q82 Mr Williams: I have a question on transparency very specific need. It could be somebody with issues of data. In the evidence, concerns were raised about to do with sight or something like that, so we would the restrictions you are under in terms of the release purchase a very specific service through that. of performance data. I detected slight impatience in We have not heard formally that people feel they have some of the answers that you have given us. You not had enough referrals. It was a slow start in terms portrayed a very positive picture. It is perhaps not of the numbers of people coming through from the borne out yet by the figures to date, and earlier you ESA client group where we would tend to use explained why. What is the impact of that lack of specialist providers first. In the first few months of transparency, and how should it be addressed? I the Work Programme there were fewer people coming noticed that in the evidence you talked about the need to have synergy between local authorities in particular, through with those sorts of needs, so that reflected and to date that has been lacking. their needs, because we would apply a demand-led Kirsty McHugh: And MPs. You want to know what service. is going on in your area, quite rightly, and at the Kirsty McHugh: As to ESA, it has been very acute. moment the Work Programme providers cannot give For a long time the number of people coming through you any information. You have to wait until the Office on employment and support allowance was only about of National Statistics and DWP publish the data. At 8% of the total number of referrals when providers the moment it is not frequent enough. Because of the were anticipating it to be 30 %. It is only in the last time lag, the stuff that the Department will put out at few months that they have been coming through in the end of May will tell you only about people who any numbers. They would disproportionately be have got into work by the end of January of this year. served by voluntary sector subcontractors, so they You will never get a live running picture, so we need have really lost out through that. In the past, there to look at what is reported and how frequently it is has been an issue about DWP forecasting particular reported. That is in the public interest, and providers volumes of jobseekers coming through and those want that. volumes not coming through. The prime contractor is told to expect a certain amount. They have then told Q83 Mr Williams: Have you made those the subs and they have not appeared, so that has also representations to DWP? been a concern as well. Kirsty McHugh: The Minister knows.
Q80 Jonathan Edwards: The Welsh Affairs and Q84 Mr Williams: What has been the response of Work and Pensions Select Committees have carried the Minister? out reviews of the Work Programme. I am informed Kirsty McHugh: I could not possibly tell you what by the clerks that the evidence from employers to both the Minister said. inquiries has been very scarce. Do you think that Mr Williams: It would be interesting to have a employers out there have sufficient knowledge about written answer to that. the Work Programme? Kirsty McHugh: I have to say it is still an issue. We Q85 Jessica Morden: On that point, you share the work very closely with the CBI in particular. We contract for Wales and you have different models. produced a joint leaflet between Asda and the CBI, Whose model is getting the best results, and what is which went out to all CBI members, plus the networks your forecast? When the next set of figures comes out of trade associations, British chambers of commerce in May will you be doing much better than the 3.1% and so on. However, a CIPD survey a little while ago job outcomes? showed that only 49% of employers even knew about Marcella Maxwell: I am not going to say anything the Work Programme, and there is real confusion about being better than Rehab or Jobfit, but we are among them about the Work Programme, very close, which reflects where we are and the labour apprenticeships, the Wales-specific schemes. Work market. In terms of the future, we are very positive Choice and all these different public sector-funded that in the second year we will meet some of our schemes. They do get confused. It was a priority. performance levels, if you take it overall, but not all Welsh Affairs Committee: Evidence Ev 15
19 March 2013 Kirsty McHugh, Marcella Maxwell and Chris Peel of them. Because of the way things are calculated, I work. What success have people who used to work in call it a super tanker. We are very confident about year Remploy factories had in getting work through you? three. I cannot possibly comment on how Rehab feel; Chris Peel: I do not have that specific breakdown, but they can talk for themselves. The important thing is an anecdotal view is that, if people have historical that it is working for Wales and I feel confident that work experience, they are far more employable than it is working for Wales. It has taken a little while to those who have never worked, so their previous get off the ground for the reasons that we have talked experience in Remploy factories is beneficial to us in about this morning, but it is now gathering aligning their skill sets to other opportunities we are momentum. Our job is to make sure that that gathers sourcing. pace and gets real traction. Chair: Thank you all very much indeed, and I also thank the Committee. We are almost on time. Q86 Geraint Davies: In terms of Remploy factories that closed down, people were required to get other Ev 16 Welsh Affairs Committee: Evidence
Tuesday 4 June 2013
Members present: David T.C. Davies (Chair)
Guto Bebb Simon Hart Geraint Davies Jessica Morden Glyn Davies Mr Mark Williams Nia Griffith ______
Examination of Witnesses
Witnesses: Gareth Parry, Director, Remploy Employment Services, Paul Gray, Chief Executive Officer, Tydfil Training Consortium Ltd, and Arthur Beechey, Chief Executive Officer, Agoriad Cyf, gave evidence:
Q87 Chair: Good morning, everyone. Thank you from end-to-end, why does there need to be a prime very much indeed for coming along this morning. We in the first place? have already met outside, but if you want to do a Paul Gray: To be perfectly honest with you, the quick introduction you are very welcome to do so. If nature of how larger contracts are awarded now you could explain very briefly what your organisations precludes organisations like ours from a financial do, that would be fantastic and then I will start the capability viewpoint. In terms of the scope and questions. structure of these contracts, they have gone beyond Paul Gray: Good morning, everyone. My name is organisations like ours. In previous incarnations, when Paul Gray. I am the chief executive of a third sector there were a number of different providers in Wales, organisation called Tydfil Training based in the Heads organisations like Tydfil Training were capable of of the Valleys area. In relation to the Work running as the administrator, the managing agent and Programme, we are a subcontractor to the Rehab the delivery body. The size and complexity of these JobFit Group, one of the two prime contractors for the contracts now mean that, for organisations like ours Wales region. We provide what is termed an we need a larger partner to provide the financial end-to-end provision. To clarify that, customers are viability, given the size of the contract that we have referred to us from Jobcentre Plus; 50% of the total now. cohort that will go into the Work Programme are sent Another aspect of it is that it liberates us, to a degree, to us; the other 50% would be sent to Working Links, to concentrate on the job in hand. Instead of having which is the other prime contractor for Wales. Being to have the management and the strategic discussions an end-to-end provider, we would be responsible for with organisations like the Department for Work and the whole customer journey from referral, delivery, Pensions, it frees us to work on a local level to answer advice, guidance, into work and in-work support. those questions that are posed to us by the local Gareth Parry: Good morning, everybody. My name is economy and by the customers that are coming Gareth Parry. I am a director at Remploy Employment through on the Work Programme. Services. We are a national Welfare to Work provider. Our primary contract in the UK is Work Choice, Q89 Chair: I do not want to labour this and I which we deliver across England, Scotland and Wales. probably do not fully understand it, but essentially you We also deliver six Work Programme subcontracts for are doing the whole thing, are you not? various primes across England, Scotland and Wales. Paul Gray: In terms of delivery. In Wales itself, we deliver as a subcontractor for Working Links, predominantly across Powys and the Q90 Chair: Yes. The Tier 2 subcontractors might do Neath Port Talbot areas. In terms of presence and size something specific. For example, if somebody has in Wales, in the last two years Remploy has supported come out of prison, they will give help with about 4,000 predominantly disabled people into addressing offender behaviour or drug problems or employment across Wales. whatever, but you are doing the whole thing. Why Arthur Beechey: Good morning. Bore da. My name couldn’t the Department just say to you, “Do the is Arthur Beechey. I am the chief executive of Agoriad whole thing”? Why do they have to go through a third Cyf. We subcontract the Work Programme from party, who presumably will have to take a cut, if you Working Links in Anglesey and Gwynedd. like, of the public money that is being spent on this whole thing? Q88 Chair: Thank you very much. You have Paul Gray: It goes back to a rationale that was successfully answered the first question without even brought to the fore during the introduction of the knowing what it was. Perhaps I can just ask you this. Flexible New Deal. The Department for Work and It does seem to me, looking at it, that it is a slightly Pensions felt that there were efficiency savings in complicated set-up, where you have a contractor who terms of the management cost of managing a plethora may have a subcontractor who will do virtually of small contracts. When we used to have direct everything that the contractor does if you are a Tier 1 contracts with the Department for Work and Pensions, subcontractor, if that is correct. So why bother having there could be upwards of 35 or 40 different contract the main contractor at all? If you are doing, as you holders on the Welsh scene. Given the economic say, the whole customer journey, the whole process climate, the Department for Work and Pensions Welsh Affairs Committee: Evidence Ev 17
4 June 2013 Gareth Parry, Paul Gray and Arthur Beechey wanted to try and rationalise their management of We see a greater proportion of individuals now that these programmes and brought in this prime come through from ESA as a benefit group. contractor model, which was introduced under the As the programme has developed, certainly from our Flexible New Deal programme of 2009Ð2010 and has experience, what we wanted to avoid, at the beginning lived on with the Work Programme. of the Work Programme contract, was being given a Gareth Parry: Other aspirations from that prime fait accompli from our prime contractor as to, “These contracting model were that prime contractors should are the Tier 2 providers that you will use. These are or could gain some economies of scale in certain the people that are going to provide advice and areas; they should be able to engage more strategically guidance.” We wanted the flexibility to go out within with advisory boards in local economies, in perhaps a our own local community and develop those way that an individual subcontractor cannot do or has relationships ourselves, and to a greater degree that is not been able to do in the past. It is possibly still too what we have done. Our prime contractor has early to tell how effective some of that strategy has supported us in doing this. We have access to a been, but that was some of the Department’s thinking specialist fund, which we can make a claim against so when they went down that route. that we can provide bespoke and tailored provision based around those specific needs that our customers Q91 Chair: Do you think we have the optimum are presenting to us. number of subcontractors at the moment overall? Do On some of the Tier 2 contractors that may not have you think that the current structure for Wales is about seen any customers from the beginning of the right in terms of the numbers of primes that are doing contract, there is the issue surrounding the make-up an end-to-end service and Tier 2 subcontractors, or do of customers who were coming to us in the early days we need more of one or of the other? Do you have and also the capacity-building exercises that had to be any criticisms that you would like to make? carried out in those early days to get the relationships Gareth Parry: Operationally, I do not think we are right and those foundation stones in the right place. falling over each other. One of the concerns of Welfare to Work is employers being hounded by Q93 Simon Hart: I want to come back to multiple organisations trying to do something. That inappropriate referrals in a minute. Do you both also has got a bit better. There has been a degree of agree with that? rationalisation of Wales and there is good Gareth Parry: There is no doubt, collectively, there is collaboration. The nature of the marketplace in Wales not a substantial number of referrals that have gone to is such that a lot of organisations know each other and Tier 2 providers. Part of that is that, by and large, have experience of working with each other, so, while most of the Tier 1 subcontractors took the financial there is a competitive element, there is a reasonable risks of the payments-by-results model and we do not collaborative element in the marketplace as well. My have the same type of financial resources that some of view would be that there is not a strong argument the primes had. Therefore, every decision we make either way to say that it is or is not. It feels okay at on a day-to-day basis has a financial risk assessment the moment, but, whether it could be improved, time attached to it. So there is a reality around Tier 2 will tell, I think. providers. It would not be realistic to ask Tier 2 Arthur Beechey: There is a restriction on providers to take a payment-by-results payment. It subcontractors’ ability to engage with ESF- funded tends to be more based on service fees; you are paying projects in particular, which affects economies of in advance in the hope that eventually you will get a scope and scale, particularly in rural areas where you job outcome, and there is a risk on that. Every are looking to get a critical mass of people, say, subcontractor will be making individual assessments through literacy or numeracy or group courses. That of risk every time they make a decision on whether is a big concern. Are we using all the resources and somebody should go to a Tier 2 provider. There is no capability that Wales has? I would say no. At the end doubt, I suspect, that that issue holds back some of of the day, going into these contracts, it has cost a lot the referral volumes going to Tier 2 providers. In our of money; it is up front really; so we want to try to own organisation, we use a limited number of Tier 2 reap the benefits. Things could have been helped an but not a high volume, partly because of the financial awful lot by ESF funding being available. assessment and partly because we would hope that we have some capacity in our organisation to deal with Q92 Simon Hart: We have had some evidence from some of those customer groups ourselves. Tier 2 subcontractors that they have received no or Arthur Beechey: Our situation is somewhat different very few referrals for the Work Programme. First, is because we get the Working Links allocation for that true? Do you endorse that view? Secondly, does Anglesey and Gwynedd and we work with those, but that really indicate that the system is failing? we have a catalogue of specialist provision that we Paul Gray: In terms of the Tier 2 provision, when the bring in as needed. programme initially started, a lot of us, as providers, needed to set up new structures and new relationships Q94 Simon Hart: I want to expand on that point with employers, and, predominantly, the demographic because there has been some reference in evidence to of the individuals that we were seeing was more what people describe as inappropriate referrals. What traditional JSA-type customers. As the programme would your definition be of inappropriate referrals, has developed, we have seen a greater proportion of and to what extent do you work with people like customers coming forward that are presenting barriers. Jobcentre Plus to filter them out, if that is the proper Ev 18 Welsh Affairs Committee: Evidence
4 June 2013 Gareth Parry, Paul Gray and Arthur Beechey way forward? A little bit of explanation of the criteria Paul Gray: Yes. It is interesting and, unfortunately, it would be helpful. is not the type of question to which there is a single Gareth Parry: We would not use the phrase answer. It is a bit of a mix of all areas of that. “inappropriate referrals” in our organisation. We take Certainly, in the Heads of the Valleys area, the the view that everybody coming to us on Work competitiveness for the vacancies that we experience Programme is referred to us under a contract that we is not particularly coming from a migrant situation, have with our prime contractor and we have an but from people who are recently being made obligation to work with that individual to the best of unemployed or are on notice of redundancy where our ability. We might have an individual view that we they have current skills, they have a current CV, and express surprise that this individual is on this they have a level of experience and expertise. At the programme, but we accept that for what it is, and we end of the day, the vast majority of jobs that we find take the individual jobseeker for what they are and we on the Work Programme are with SMEs—small to work with them as best we can. The biggest issues medium-sized enterprises. You have to put yourself in for us tend to be around motivation and belief, and the position of an employer in that situation, where self-esteem and confidence. That is where we have to what you want to do is mitigate the potential risk to spend an awful lot of time with people, to get them your organisation, financial or otherwise. to a point where other people may regard them as Chair: Absolutely. appropriate, but that is part and parcel of what we do Paul Gray: The competitiveness that our jobseekers as a subcontractor. are confronted with is enormous. There was a time a few years ago when you could almost earmark a Q95 Simon Hart: Is there much tie-up with whole pool of vacancies, which would be from Jobcentre Plus in the early stages of that process? national minimum wage up to £14,000 or £15,000 a Gareth Parry: It depends on the relationship you have year, which you could say typically would be the with local Jobcentre Plus offices. You have the types of vacancies that would be just right for the opportunity to have what you might regard as a warm majority of individuals who we would be working handover on occasion, where you can talk about an with. Now we are seeing recently unemployed people, individual case. You have to be careful about things who are more than capable and more than willing to like data protection, but you can get the background work for the type of rates that I described earlier, and to an individual if you need it. We would generally it is making it ever more competitive for the take the referral in and work with them. The key to individual. I would say that, as well as the inherent being a subcontractor on the Work Programme is skills barriers, this brings up another point that my building an individual relationship of trust and colleague brought up earlier about lack of access to confidence with the jobseeker, so, even if you have European funding. background knowledge, you are still starting from that Chair: We are going to come to that later. Let me not point of having to build a relationship with the kill somebody else’s question because I do want to jobseeker. Therefore, to a degree, you do your own bring that in. assessment of where the individual is at. Paul Gray: I agree, particularly with the fact that we Q97 Jessica Morden: You mentioned earlier the have never deemed anybody as an inappropriate ESA referrals, and in the first 14 months of the Work referral. Customers present themselves with multiple Programme, about 34% of what was estimated by barriers, and, again, we feel a duty of care to try and DWP came through as ESA referrals. What address those barriers to the best of our ability. difficulties did that present to you as specialist Certainly, within our delivery model, there is disability subcontractors? methodology for a dialogue with Jobcentre Plus. In Arthur Beechey: For us, that would be particularly some instances, we have had discussions as to whether where our strength was—the old Workprep and an individual would be a more appropriate referral for WORKSTEP programmes, and Pathways. It was quite the Work Choice programme or whether they would a shock for those clients and that part of the cohort be better suited to the Work Programme, but certainly that it was not available. The reasons for that I do not we feel that we have a duty of care. The term know, but we raise it quite often. “inappropriate referral” is not one that we would generally feel comfortable about. Q98 Jessica Morden: Do you see people in that ESA referral group who you would think were not fit for Q96 Chair: Mr Parry and Mr Gray, you rather work? euphemistically talked about customers turning up Arthur Beechey: Yes. We have seen some where there with multiple barriers to work. I forget the words you were health conditions that severely restricted their just used, Mr Parry, but I knew exactly what you were ability to engage, yes. We have seen cases like that. getting at and how you have to work with people to get them into a position where they can present Q99 Jessica Morden: These are people who have themselves and so on. I know what you are getting at, come to a work capability assessment and been but let me ask you this: is the major problem for your deemed fit for work? customers the fact that there are no jobs or that, as Arthur Beechey: Yes. things stand at the moment, they would not be able Gareth Parry: The challenge is seeing that individual to compete for jobs against people coming here from on the day you get the referral compared with seeing eastern Europe, who will do anything they can to go that individual in what could be two years away, and and get those jobs? trying to make a judgment of what the level of Welsh Affairs Committee: Evidence Ev 19
4 June 2013 Gareth Parry, Paul Gray and Arthur Beechey distance that can be travelled in that period of time Gareth Parry: The numbers on how many vary. It is is and how realistic at the end point of two years is probably about 300 to 350, depending on the sustainable employment. It is a challenge. categorisation, the timings of factory closures and Yesterday, I was talking to somebody from our things like that. I do not want to be distracted on to a Abergavenny office, who was saying that they had discussion about Remploy factories. recently worked with a 51-year-old gentleman who had never worked his entire life. He had a very severe Q103 Geraint Davies: Sorry. On the point about background of multiple epilepsy; he could have as seizures and SMEs— many as 10 seizures a day. About 18 months ago, his Gareth Parry: That is down to providers to work with medication was changed and he is a bit more stable an individual and an employer about what is the right now. He still has seizures each day but had never kind of solution. In that particular case, you should be worked in his life and had no work ethic. We have looking at Access to Work as a supplementary decided that we will work with that individual now programme, what in-work support packages can be that he is on slightly more stable medication. We have put together for the individual to work with that managed to get him voluntary work two days a week employer, and how we can work with the employer to to try and get him into a pattern of work ethic. We put in reasonable adjustments. For example, if people think, within the two-year period, there is a chance of have certain patterns of seizures at certain times of the getting that individual into work. day, you might be able to make some working hours It is a judgment call, is it not, when you see people adjustments. It is all about the package; it is not about on day one as opposed to when you see people at the having an individual, putting them into a job and then end of two years? Ultimately, we have to trust the skill just leaving them and the employer to sort it out. The of our advisers on the front line as to what they think job, as a provider, is to stay with that relationship until they can do. it is sustained, to make sure that the reasonable adjustments can be done. Q100 Jessica Morden: That is a really positive example, but in, say, your contract in Monmouthshire, Q104 Geraint Davies: But if I am a small employer do you see people who you think should not be there? and I have two options—there is a person who has Gareth Parry: We all probably see people, seizures and a person who does not, other things being particularly those, for example, who have medical equal—what is the incentive for me to take the person conditions who are awaiting surgical operations. You who has more challenging conditions? question why you are seeing some of those Gareth Parry: Employers are all motivated in individuals, but, again, I go back to our particular different ways. Particularly with the SMEs, and like view as an organisation. We will still work with those Merthyr, we work with lots of different SMEs. People individuals because we see them as being part of the are motivated—maybe they have family members contract, but there are always times when you think, who have health conditions or they have a background “Is this the right programme for this individual?” themselves of disability, where they have a tendency to want to be more supportive. They might have a strong sense of social responsibility and being part of Q101 Geraint Davies: Can I come back on these the community. Yes, there are other employers who points because Mr Gray mentioned the new job would say, “I do not want to take that individual. I opportunities of SMEs? It is very competitive, there want an individual who is going to be here 9 to 5”, are people being laid off who are competing, and we but there are lots of employers out there with are now talking about somebody in that particular different attitudes. example who is having seizures every day and we are asking a small business to take that person on, given Q105 Guto Bebb: I have heard two of you already that they only employ one or two people and there is mention the fact that one of the restrictions on the a risk of discontinuity. At a time when there are not ability of the Work Programme to deliver for the client many jobs out there, do you feel that the focus is right group in the Welsh context is the fact that you are on very difficult-to-employ people? Do they really unable to access ESF programmes, which are also have a chance of getting new jobs? Can you just aiming to support people back into employment. mention how many people who have been discarded Could you give us some examples of where you have from the Remploy factories, as far as you know, have experienced practical problems in your own positions? jobs through these systems? Also, could you try and explain why you think the Gareth Parry: As far as I know, not many of the Welsh European Funding Office has restricted the former Remploy factory employees have been ability to use ESF funding programmes for Work referred to the Work Programme. Most of them are Programme clients, whereas the situation in England still with Jobcentre Plus; some have gone to Work is the reverse? Choice. I do not think many have gone to the Work Paul Gray: If you look at the ESF issue as regards Programme but I could check that. The latest numbers the Work Programme, I see it as twofold: there is pre- I was aware of are that there are currently 99 former Work Programme and then there is when people are factory employees in employment as we sit here actually referred on to it. With pre-Work Programme, today. Those data are a few days old. what we have seen in the past is that there are a number of European-funded programmes. The Wales Q102 Geraint Davies: How many was it—99 out of Council for Voluntary Action has an Engagement how many? Gateway programme, which provides a lot of support Ev 20 Welsh Affairs Committee: Evidence
4 June 2013 Gareth Parry, Paul Gray and Arthur Beechey to unemployed people. There is also Jobs Growth within my organisation, but not both”? How do the Wales, which is another programme run by the Welsh clients respond to that confusion? Government, aimed at giving employer subsidies to Paul Gray: There is a definitive line, which is now 18 to 24-year-olds. Again, we were initially finding pre-Work Programme and post- Work Programme. that some individuals would engage with a European- Pre-Work Programme we can work with individuals; funded programme, they were happily working we have a liaison through Jobcentre Plus and through towards a successful outcome, they would get referred the Careers Service to deliver skills programmes to to the Work Programme, and then it came to an end, young people and adults, and for apprenticeships in which for us felt farcical really. We just felt that that our area. It is a very positive and productive was not a good situation for the customer to arrive in. relationship. Then, post-Work Programme, the tap is The second part of that is when they are actually on turned off as far as the European funding provision is the Work Programme. When we consider the number concerned. For many of our customers it is somewhat of barriers that many individuals present to us, we frustrating, to say the least. need all the ammunition that we can get our hands on Gareth Parry: I am conscious that we are a provider to try and develop a realistic back-to-work programme that delivers both in England and Wales. In terms of for this individual. I certainly feel that, if we had our delivery, we are only running marginally behind access to work-based learning, to other European- in performance—it is marginal only—in Wales from funded programmes, it would certainly give a where we are in England, where of course we can substantial increase in the amount of positive activity access ESF provision. We do have a view that in and positive investment that we could make into an Wales we end up utilising our existing staff sometimes individual. to compensate for the lack of access to ESF and doing In terms of the rationale behind why WEFO—the that other value-added activity, whereas if we could Welsh European Funding Office—feels that there is access ESF activity we could have them focused more an issue regarding this, I am not 100% certain. I do on their core job of working with employers and not know who is. We have heard stories around part getting people to work. While we are not suffering of the design of the Work Programme, which was substantially in terms of performance, we think our inherited from the Flexible New Deal, that it was Lord performance could be improved further if we could Freud’s notion of a black box approach, which we are get access to ESF. very positive about. We like the idea of having that degree of flexibility within our provision. But I do not Q108 Nia Griffith: Could I just take up what Mr know whether the European Funding Office feels that, Gray said—that previously you were able to access because you have a black box approach, because you the other streams of funding, but you are saying that, can do anything, that would necessarily mean that since the Work Programme has been in position, it is everything would be double-funded. much more difficult in the sense that people do not seem to be able to transfer out of the Work Q106 Chair: Why would it be a problem? If the Programme? This is the information that I am getting European Union are not objecting, why are WEFO from people. They have to be put on it; there are objecting to it? mandatory requirements. For example, 18 to 24-year- Paul Gray: That remains a mystery to me, olds, after nine months on JSA, are put on the Work unfortunately. If I had a wish list of what would make Programme. They do the things they are supposed do, the Work Programme better for our customers, there which is look for jobs. They find one; they identify would be only two things on it. One would be that it could possibly be one that would be part of increased employer confidence, so that there was a Jobs Growth Wales and actually has a future because greater degree of confidence in the employer market it is an expanding company. Then they are told they to try and formulate a positive progression for are trapped for two years on the Work Programme, individuals. Second would be access to a European but they have done what the Work Programme was funding provision. The other aspect of it, just as a looking to do—i.e. they have found a job—and yet final point, is that it curtails so many of the positive they are not allowed to be released. Is there something collaborations that we are developing. We have an wrong with the mechanism of the Work Programme excellent working relationship with our local authority that will not allow them to be released? through regeneration and economic development, but Paul Gray: There are a number of points around that you end up in ludicrous situations where you are and the relationship between the Welsh Government, trying to have a meaningful debate about how you Jobs Growth Wales and the Work Programme. Within can design methodologies, programmes and support the Work Programme there is still the youth contract, mechanisms to move people along, and all the time which provides a wage incentive scheme to employers you are getting this barrier of, “Sorry about that, but that is somewhat comparable with Jobs Growth Wales. that is European-funded so that will have to be”— Our experience in the real world is that we operate both. Because we also have a Welsh Government Q107 Guto Bebb: Obviously the situation in contract and a Work Programme provision, we see England is different because the Skills Funding both. We generally find that employers, for whatever Agency is able to allow access to ESF, so clearly this reason, seem to be more conducive to Jobs Growth is a made-in-Wales problem. Do your organisations Wales than the wage incentive scheme. That could be deliver ESF-funded programmes as well, and, if you down to the way that the payments are made for the do, how difficult is it to say to your clients, “You can subsidy to the employer or the way that the access this service or you can access that service programmes are marketed; it could be I don’t know Welsh Affairs Committee: Evidence Ev 21
4 June 2013 Gareth Parry, Paul Gray and Arthur Beechey what. We seem to have more demand for Jobs Growth performance in Wales is not significantly worse than Wales than for the wage incentive scheme. in England, but it is worse and obviously the Taking the point of what would happen if these unemployment figures in Wales are actually slightly barriers to ESF were removed and we were able to higher, so this is an issue. Could you clarify, from a access Jobs Growth Wales while an individual was in Work Programme perspective, is being offered a the Work Programme, what would be a nice situation position on Jobs Growth Wales a work placement or then would be to divert the funding that was originally is that a job outcome? earmarked for the wage incentive scheme to give Paul Gray: That is a job. greater incentive to other groups. To go back to the point that Mr Davies made earlier about what is there Q112 Guto Bebb: It is a job outcome from a Work for an employer to take on somebody with a disability, Programme perspective. we are trying to put together some kind of comparable Paul Gray: No, sorry. You would not be able to access programme, because the payment-by-results funding Jobs Growth Wales once you are in the Work is that much more for somebody on ESA or with a Programme. significant barrier. We try to pass over some of that money—that funding—to employers to try and Q113 Guto Bebb: Yes, but the point I am asking is, support that. If we had access to Jobs Growth Wales, would you see Jobs Growth Wales as a job outcome that would mean we could divert those funds that were or is it a work placement? earmarked for the youth group and maybe try and Paul Gray: If we had access to it? provide a greater level of funding to support other groups that are also as disadvantaged in the marketplace. Q114 Guto Bebb: The scheme. Would you classify that as a job outcome or a work placement? Paul Gray: It is a job outcome. It is; it is six Q109 Nia Griffith: Could I come back on this again? months’ paid— This one is really important, Chair. We all understand that you should not be double-funding things; we all understand that. But the problem seems to be that the Q115 Guto Bebb: Yes, but this is a key point. From individual cannot escape from the Work Programme, a Work Programme perspective, this is a key point and, as you quite rightly say, if they were funded in because it is a six-month contract; that is my other ways and helped in other ways, that money understanding. It is six months where there is no could be released to help other individuals. In other guarantee of a job at the end of that six-month period. words, it would not be wasted. They would not be This is a key point. So, therefore, I would argue that drawing on it twice, because the person who goes off from a Work Programme perspective, that would be on the other programme will be leaving you funds that seen as a job placement rather than a job outcome. could be used for other individuals. How do you see Gareth Parry: But the majority of the financial a way out of this, and what do you think we should revenue a Work Programme provider gets is once it be saying to both Governments to get this sorted? goes beyond the six-month point and achieves what is Paul Gray: First of all, it is terminology. I do not called the sustainment phase and the payment-by- think anybody should have to escape from the Work results model. It would be in the interests of the Work Programme. Programme provider to make sure that either that job itself is sustained or, at the end of the six months, Q110 Nia Griffith: That is what it feels like. They that individual is immediately found a second job to have found a job and they are not allowed to take it, continue their employment path. There is a vested and they are being kept on a scheme that is not a job. interest for the employment provider if that could be Paul Gray: That is frustrating for individuals. It is worked through. frustrating enough trying to get a job, apart from when you may feel that the bureaucracy around it is Q116 Guto Bebb: Just to clarify, it is a six-month curtailing you somewhat. I think we should carry out period with the hope of a continuation? some kind of dialogue, analysis or investigation with Gareth Parry: Yes. the Welsh European Funding Office to find out why there is this artificial barrier to accessing ESF funds. Q117 Geraint Davies: Just to nail down a point that If we could just find out what the rationale behind that Nia Griffith was making, do you think that someone is and try to develop some kind of forward strategy, who has a job through the Jobs Growth Wales even if it was available to particularly disadvantaged programme should be entitled to keep that job and groups or whatever it would be or anything in terms have it as a “get out of jail” card so that they are not of access to this provision that would be significantly put into the Work Programme when they already have beneficial to the programme, then maybe we would a job? Would that be a simple change? Irrespective of get to the point where people did not feel they needed all this funding stuff, the issue is what trumps what. to escape a programme but felt that it was there and What is happening now is that the Work Programme all aspects of Government, whether it is the Welsh is trumping real jobs in Jobs Growth Wales, so would Government or national Government, are trying to it not be better if the trump was the other way round? support the individual. Paul Gray: As far as I am aware, if a young person accesses Jobs Growth Wales, then for the six months Q111 Guto Bebb: On this particular issue, it is a that they are employed they would not go—if, during significant concern, because, as you rightly say, the that period then, that they— Ev 22 Welsh Affairs Committee: Evidence
4 June 2013 Gareth Parry, Paul Gray and Arthur Beechey
Nia Griffith: Can I just come in on this? There is a together to try to get resources together, get synergies, very short window. You have to be unemployed for and the economies of scope that I mentioned earlier. six months to be eligible for Jobs Growth Wales, but The Work Programme does seem to be subservient to if you are unemployed for nine months, you have to a lot of other initiatives. go on the Work Programme. If something does not come up in that time, what should you do? Decide Q120 Mr Williams: Gentlemen, what would you say you do not claim, in which case your name might fall to that? off the list altogether and nobody might know where Gareth Parry: On a pan-Wales basis I would say that you are, never mind the thought that you might not be there are some challenges. With unemployment being able to feed yourself, or you are compulsorily put on slightly higher, there is competition for vacancies that the Work Programme and then you cannot get off it. do come. There is a greater predominance of public The young person is really stuck unless they happen sector in Wales than in other parts of the UK. With to be savvy about it and they happen to know they austerity opportunities, the public sector are not as have to get something in that window between having prevalent as they perhaps were in the past. Then the clocked up six months of unemployment and not rural nature of parts of Wales is a challenge, and with being in training or whatever, and hitting the nine the economic situation and the performance of the months when they have to go on the Work Work Programme not meeting the financial Programme. It seems to me that there is an issue about projections that everybody thought we would have— not being able to escape. Unless they get it in that window, they are stuck on the Work Programme. Q121 Mr Williams: Were they unrealistic at the Chair: This is obviously a matter of great interest and start, or do you envisage much better news with the I have let it run on as far as I can. To keep to time next set of figures? That has been the message. We now, we are going to have to speed everything up are told to wait with bated breath for the next figures. and perhaps come back to this issue in a later session Gareth Parry: There are two elements to that. First, because it is, as you say, a very important point. Could performance is challenging given the economic I just ask—politely—everyone to try to be a bit more situation, and then the mix of candidate flows on to brief now in questions and answers so far as that is the Work Programme has created a different financial possible? result for providers. All that means that for subcontractors in particular, as well as primes, it is Q118 Mr Williams: The earlier discussion is part of financially tighter than we thought it might have been. the answer you are going to give me, but we will see. Therefore, how you spend your money, particularly in With regard to other challenges affecting the Welsh rural areas, is more of a challenge in getting volume- context specifically, the DWP’s data that came out in based activity to try and be more efficient. There are November revealed that Wales was performing less dynamics in Wales that are challenging. than the British average. Mr Parry alluded to the fact that this might be a significant contributory factor to Q122 Mr Williams: You said pan-Wales. Other than that. What other factors do you attribute to the fact the access to the European Structural Funds issue, is that Wales is seemingly performing less well than there a discernible difference in approach that you elsewhere in the UK? have noticed between England and Wales? Arthur Beechey: In Wales, perhaps the perception and Gareth Parry: No, other than some of the dimensions the status of the Work Programme is not the same as that I have mentioned around public sector/private in England. It came out as, “This is the flagship. This sector—that sort of thing. I would not say that we is the only game in town. Get on or miss the boat” have identified specifically a difference in Remploy type of thing. In our area, there are a lot of European- terms. funded programmes, some of them very largely Paul Gray: I do not want to add an awful lot more to funded such as Taith i Waith programmes and what that, the ESF issue apart. As I mentioned earlier, the have you, which are aimed at engaging with the vast majority of organisations that we are working economically inactive. There is a lack of engagement with are SMEs and it is down to confidence in that or a lack of recognition of the Work Programme as a particular sector and how they feel that they can Welfare to Work Programme with county councils. engage with the Work Programme effectively, The Anglesey Economic Regeneration Partnership has particularly in this very competitive market that we only ever been invited there once. There seems to be are being confronted with. a lack of recognition of it as a major programme and I do not think that helps at all, because when the macro Q123 Mr Williams: My important question is that a decisions are being made, there is no kind of factoring lot of us represent rural areas and, Mr Beechey, in in of the impact the Work Programme could have or your first remarks you mentioned the challenges of the contribution that it could make. rurality; you talked about literacy and numeracy programmes and the difficulty of getting that sizeable Q119 Mr Williams: Where do you attribute that? body of people to access support in those areas. Could Where would you put the blame for that—the DWP you say a bit more about the challenges of rural areas or active resistance from local authorities? like Powys or Ceredigion or north Wales where you Arthur Beechey: I do not know. It might be are based? self-generated within Wales. We have spoken about Arthur Beechey: It can start with just getting transport WEFO already. The economic climate is bleak, to and from. We have opened up, in our case, satellite whoever looks at it. Surely we should be working places. We have quite a good covering, but it is getting Welsh Affairs Committee: Evidence Ev 23
4 June 2013 Gareth Parry, Paul Gray and Arthur Beechey transport to and from, especially if you need people Q126 Guto Bebb: One of the key things is that the where group work would be an integral part of Work Programme should be an umbrella, because my bringing them on and developing their confidence and understanding of the Work Programme was that it was esteem. Also, we are finding that, with cutbacks supposed to pick and choose the relevant interventions everywhere, natural circles of support for people are to support the clients, whether that was coming from diminishing because lots of voluntary organisations ESF funding or not. By nature, therefore, in a Welsh are suffering. All that impacts upon how capable a context, because we have what I would describe as person is of engaging and benefiting from the Work this artificial divide, you are going to see different Programme. Those are some examples. people approaching different businesses, selling very much the same service. Does that create an added problem in a Welsh context? Q124 Guto Bebb: You have already mentioned the Paul Gray: To a degree. We also have to take some fact that the Economic Regeneration Partnership in credit for the fact that, in spite of the issues regarding Anglesey only had one meeting to discuss the Work European funding difficulties, we have still been able Programme. to develop effective relationships with bodies that are Arthur Beechey: Yes. not funded through ESF, where they can come to the table and provide a level of support to our customers. Q125 Guto Bebb: You have all mentioned the I do pride ourselves as an organisation that we have importance of SMEs, but do you think the business trawled through all the provision that could possibly community is actually aware of the Work Programme? be available, whether it is adult community learning— Just as an aside, I wrote to every member of the FSB whatever it may be—to try to develop some kind of and the tourist association in my constituency to support mechanism. At the end of the day, the inform them of the Work Programme, obviously employer does not want to know about our issues. mentioning both providers rather than any single What they want to know is, “Can you provide me with provider in case I was accused of favouritism. To what the type of individual that, given a level of support, is extent do you think the small business community are going to be good for my organisation?” in the same aware of what the Work Programme can offer them in way that we would be looking if we were recruiting. terms of recruitment? To a fairly substantial degree, we have tried our very Gareth Parry: It is nowhere near what it could or best to do that. should be. Part of that is the degree to which providers are or are not able to promote it themselves. Also, Q127 Jessica Morden: There was criticism last there is an element of initiative overload with month from the Work and Pensions Committee that employers. They get fed up. They are not, frankly, suggested, as they had some evidence in their report, interested whether it is called Work Programme or that the Work Programme was failing to reach Careers Wales. Whatever it is called, they are not jobseekers with the most severe barriers to interested. They want a good service to help them employment. It would be interesting to hear your recruit people who are prepared and able to do the points on that. Also, specifically the Work Programme jobs for which they are employed. Simplifying that was to last for two years for clients, and it is two years employer engagement piece is a challenge for all of now this June—presumably on 1 June. What is now happening to those people who have been two years us. on the Work Programme, particularly ESA referrals? Paul Gray: What we have tried to achieve is again Where are they going now, this minute? Where are with limited resource. Going back to the point Gareth they referred on to? made earlier, sometimes we are falling over each other Arthur Beechey: In our case, an agreement is made to try and knock down the doors of employers. It with the Jobcentre about how clients are handed back worries me sometimes whether, in answering the to them. They have said the expectation is they will phone to our employer engagers and everybody else, have detailed CVs, and we will share as much they have time to be in business and make a profit information as the client is willing for us to do with from what they want to do. Certainly, we have tried them about the interventions that have been made with to develop an effective strategy through our own local them as well. There are about 65 going back in June, authority as well. We work very closely with if I remember, from Gwynedd and Anglesey. I can get economic development and with regeneration, as well you specific figures if you want. as business clubs and the FSB, to try and get a Jessica Morden: Yes, that would be brilliant. consistent message out there. What is important as Gareth Parry: The Department made an well is that, within our own local authority, we have announcement last week about what would happen developed an employer liaison partnership. As much next for people, in that they will go back to the as we possibly can, we try to co-ordinate our activities Jobcentre and the Jobcentre are going to employ so that we are not all falling over each other and so personal advisers who will deliver what is broadly that employers can get not a one-stop shop but a described as a tough activity-based regime. consistent message regarding what the Work Programme or any other provision can support them Q128 Jessica Morden: In your case how many with. We have tried to centralise that process as much people from Remploy will you be passing on to the as we possibly can, again trying to leave more Jobcentre? resource for the client intervention rather than the Gareth Parry: I do not have those numbers to hand, I administrative burden. am afraid. Ev 24 Welsh Affairs Committee: Evidence
4 June 2013 Gareth Parry, Paul Gray and Arthur Beechey
Q129 Jessica Morden: What about for Tydfil activity. If that activity is not completed, they could Training? be subject to sanction. Paul Gray: Again, it will reflect how the numbers came in two years ago. I know it was a slow start and Q132 Geraint Davies: What sort of activity? then it was as if the floodgates erupted. I could not Gareth Parry: I would assume it is community-based give you exact figures, but I know there are two main activity or attendance on training courses, or it could areas within Jobcentre Plus that these individuals will be evidence of applying for jobs. be going into post-Work Programme. There is the Chair: We don’t absolutely know yet. mandatory intervention regime and the Jobcentre Plus offer. These two elements will be decided upon the needs of the individual customer once they have Q133 Geraint Davies: If you have only had, as you exited the Work Programme. have said, a 3% success rate, are we then saying that Another interesting point though, just in terms of post- 97% of people after that will have to have this daily Work Programme, is that now all these people are activity to stop them having their dole removed? Is going to become eligible for European funding that what is happening? provision. I do not know whether that is going to have Gareth Parry: Can I just say that I would take issue an effect now, with greater demand upon European with some of the figures being mentioned? The programmes as we see significant numbers exiting the performance data for both the contracts in Wales are Work Programme now becoming eligible and the looking at approximately in excess of 20% in terms demand for these programmes going up, where for of job starts now and roundabout 10% achieving job two years there has been a hiatus in terms of that outcomes. I do not have cohort data, but the June/July demand. Again, I do not want to overlabour the point, 2011 cohort data would be higher still than that. I do but you just wonder whether, if we could have had not think it is as gloomy a picture as is being access to this provision, we could have done it earlier suggested. on in the provision rather than delaying it until they Chair: I am at fault for deviating from the timetable, exit at the end. which we are already well behind on.
Q130 Chair: If I may say, when you look at the ratio Q134 Nia Griffith: Just taking up the Chair’s point, of job outcomes to referrals overall, it is 2% or 3%, we all understand the amount of effort and money that 4% in some cases. It is pretty low, is it not? I have might be needed for the hard-to-reach groups, but do heard an explanation before, but would they not have you not feel that for ordinary JSA, jobseekers or got the jobs anyway, if I may play devil’s advocate, whatever, the money will be much better spent on without any of this money being spent? It is 4% or stimulating growth in the economy than paying people 2%, and 5% maybe in some instances. to help them get into jobs? Then people like you, who Paul Gray: It has to be seen in the context of a are dealing with the really difficult people, would number of things. The original targets were somewhat obviously have the funds to help the people who are having real difficulties, but with regard to everybody optimistic, I fancy, given the state of the economy. else there is a heck of a lot of money going into this Also, the way that the information is collected as well programme for virtually no results. is that we are talking about people sustaining work for Gareth Parry: That is probably an issue for the 13 or 26 weeks before we count them as a success, procurement process for the Work Programme and which is different from some previous programmes. formerly, before that, FND as well. There was quite a We also have to be somewhat careful that we are not lot of evidence, if I remember, that at the time comparing apples and pears, inasmuch as I do not roundabout 90% of people who become unemployed think you could take performance of previous are back in employment within either three to six programmes and just extrapolate that as a benchmark months. That is why that timetable was put in. It was for the Work Programme achievement. always estimated on Flexible New Deal and Work Chair: All I am saying is that it is quite a lot of Programme that these were individuals who would money for a very small number of people who have require additional support; the vast majority would not jobs. get alternative employment. That gap at the beginning is intended to pick those people who would easily Q131 Geraint Davies: Can I just pick up something move back into employment anyway. Mr Parry said at the end to see if I have got this right? Mr Parry mentioned that, at the end of the Work Q135 Glyn Davies: We have spoken already about Programme, after two years if you do not have a job differential outcomes between England and Wales, you are subjected to a tough activity- based regime. albeit that they are fairly small. Can we look at the What was that about? differential outcomes in terms of some special Gareth Parry: An announcement was made last week. groups—lone parents, young adults? The results in I only read it yesterday myself, if I am honest. People Wales are not as good as in England. Have you any will go back and they will have a personal adviser at idea why that would be? the Jobcentre, who may see them, do a needs Paul Gray: If I can take the point relating to lone assessment on them, but see them either weekly or parents particularly— monthly—it does say in the announcement potentially daily—to make sure that they undertake certain Q136 Glyn Davies: Women is another very activities, some of which will be mandated work important group as well. The figures in Wales are just Welsh Affairs Committee: Evidence Ev 25
4 June 2013 Gareth Parry, Paul Gray and Arthur Beechey not as good as in England and there is no obvious local authorities—an increased role for them to co- reason why that should be. ordinate the Work Programme. Mr Beechey was a bit Paul Gray: If you look at some of the cohorts—the more negative about some of his experiences with specialist groups—a lot of it goes back to the local authorities. Could you elaborate about your extremely competitive nature of the job market at the expectations there, please? moment. You also have to look at things like childcare Paul Gray: Definitely. If you look at the whole provision, and access to affordable and reliable collaboration side of things, to make the Work childcare provision. A question I asked my front-line Programme work, you really need to spread it as staff just the other week was this issue surrounding broadly as possible, to try and bring in as many lone parents. Do we find that there are any particular organisations that can support it in whichever way, issues? We found that, if a lone parent presented whether it is strategically or in terms of direct themselves and said that they did not have a particular delivery. We have two methods of collaboration; we issue with childcare, the majority could progress into have an internal collaboration where we will talk to work because the nature and type of work that is other providers through the Rehab JobFit family to available at the moment did lend itself somewhat to a identify areas of good practice. Also, if we identify a lot of the aspirations of some of the lone parents, particular funding source that we feel we could tap without categorising anybody too much. Certainly, the into that would be beneficial, then we can competitiveness that is confronting the average communicate that to a central point, who can then jobseeker is hard, and, when you multiply that by analyse that to see whether that would be applicable additional barriers, be it disability or a particular other to other providers within the group and then characteristic, then that is probably why the Welsh disseminate that information. Also, within the group scene is more difficult than it is UK-wide. we try to identify similar demography. When we look at our internal performance, sometimes Q137 Glyn Davies: I do not quite get why the Welsh you will see one provider is doing exceptionally well scene would be different. I can understand the and one provider may be doing exceptionally badly, additional barriers point completely; that is entirely but, generally, it is not down to a particular method logical. But why would that be different in Wales or whatever; it is more the area that that individual from England? organisation is working with. We try to find economic Paul Gray: Not operating in England I can give you indicators that are similar and then we will set up a only an informed opinion maybe. The number and self-help group and we will talk to other providers. extent of vacancies may not be as high. Also, we We work very closely with another provider—TBG traditionally have inherent skills issues within our Learning in Rhondda Cynon Taf—because Rhondda areas. Maybe we need to be doing more to address Cynon Taf and Merthyr Tydfil have a very similar underpinning skills and employability skills to address demographic. That is the internal collaboration. the balance. Externally, through organisations like the local authority, we try to have an inclusive method to bring Q138 Glyn Davies: It just seems, if you look at your as many organisations around the table. In our own figures, for some reason in the special groups it is not local authority, the regeneration department acts as a as successful as in England. I would have thought you facilitator for that so that all of the delivery agents would have looked at what was happening in England within the Merthyr Tydfil area can get around one to see whether there was some way in which you table and we can talk effectively about what we can could improve the position. Are you taking any steps offer, what we can do together and try and draw up a to try to improve the position in the special interest single integrated plan—a single idea about how we groups that I talked about? Women, lone parents and can present all this to employers and inward investors. young adults seem to be the three categories that there has been some criticism of. Q140 Mr Williams: Do you feel that that positive Paul Gray: Definitely. Part of what we are trying to model is replicated elsewhere? do now is to formulate specific support mechanisms Paul Gray: No. Sorry, it is very positive—sorry. within the programme to address their particular needs. Within our own set-up and our own contract with Rehab JobFit, there are two particular funds that Q141 Mr Williams: I do not want to dent your we can dip into for this; one is an innovation fund and optimism, but— one is a specialist fund. If we do identify that we need Paul Gray: I am jumping in a little. I do not think it to put together a particular level of delivery or a is. Part of the success that we have had is down to the particular level of support for an individual, we can fact that we have operated in the area for the last 25 turn these things around quite prudently and quite years and that we have a very good relationship— quickly to address those issues. Up until this point, we have focused on people with disabilities, but there is Q142 Mr Williams: Can I just say that the stimulus no reason at all why, as we identify additional barriers, for what you are doing in Merthyr comes from you? we could not put together specialist support Paul Gray: Yes. mechanisms for them. Q143 Mr Williams: It has not come from the local Q139 Mr Williams: On that basis, to what extent are authority. They are not mandated in any way? subcontractors collaborating and sharing good Paul Gray: No, but we were invited to the table. We practice? In your briefing you talked about the role of were not excluded, but we had an open invitation to Ev 26 Welsh Affairs Committee: Evidence
4 June 2013 Gareth Parry, Paul Gray and Arthur Beechey come, to present to the group and then play an active Chair: Thank you very much indeed. We have just part in how that group strategically moves forward. about finished on time, so I am very grateful. We will Gareth Parry: I think most subcontractors would be continue to look at this with much interest. Thank trying to replicate that, but the level to which local you all. authorities are or are not involved in doing that is Paul Gray: Finally, if any Committee members would inconsistent around Wales. Our own experience is that like to pay a visit to Merthyr Tydfil and see what we we have some good networks, but we would feel we do and how we do it, we would be more than happy have probably gone out of our way to do that to host them. ourselves rather than seeking help. Chair: We had a very good visit to Pontypridd. Obviously, Merthyr is not a million miles from there, and we might consider a visit. Q144 Mr Williams: Mr Beechey, what would you say for the north? Arthur Beechey: We do not seem to have any kind of engagement with local authorities in relation to the Work Programme. Welsh Affairs Committee: Evidence Ev 27
Wednesday 3 July 2013
Members present: David T. C. Davies (Chair)
Guto Bebb Simon Hart Geraint Davies Mrs Siân C. James Glyn Davies Jessica Morden Jonathan Edwards Mr Mark Williams Nia Griffith ______
Examination of Witnesses
Witnesses: Mark Hoban MP, Minister for Employment, and Martin Brown, Jobcentre Plus, Work Services Director (Wales), gave evidence.
Q145 Chair: Good afternoon, Minister. Thank you scratch where we subcontract work out. It is a very much indeed for coming along this afternoon. challenging environment, but one where I am We are going to launch straight into this, if we may, confident that we can make progress and the providers because time is, as always, limited. The first question need to make progress, too. will not surprise you, and that is that the Department has released the second set of Work Programme data, Q147 Geraint Davies: You said, Minister, in your which I have here. What is your view about what this opening remarks, that Wales is a lot more challenging shows for Wales? Clearly, just to prompt you a little than other areas, but there was a so-called austerity bit, it does not appear to be very good news for Wales audit published in the Financial Times, which said that in that we lag behind virtually every other region of the financial impact per head of the working the United Kingdom. I wonder if you could just tell us population in Wales was £549 and in England it was a little bit as to why you think that might be the case. £470. Would you not accept that, given that there is a Mr Hoban: Thank you. Can I just introduce Martin much higher proportion of people in public services Brown? Martin might be known to some of you. He where you are cutting, there is less room for is the work services director for Wales and will give generating new jobs, and therefore things like the some local colour perhaps later on. Work Programme cannot really work as well in The Welsh labour market is a difficult one, but I do weaker economies of your making? not think it is in any way particularly more Mr Hoban: No, I do not agree with that. If you look challenging than other nations across the UK, and we at the results in Scotland, for example, where both have seen some progress in the Welsh labour market providers exceeded the targets by some way, you can in recent years. The Work Programme results see that the programme can work in very challenging published last week tell us that people are capable of parts of the country and be very successful. exceeding the targets, and you will see in that graph some providers who have performed exceptionally Q148 Geraint Davies: In addition to the fact that the well, but, also, there are some who could do better. cuts are deeper, of course, in Wales, which was The performance across the piece is better than it was affecting the outcomes for the Work Programmes, this at the end of the first year. We are making progress, spend is less. In last week’s spending review for the but more needs to be done. I visited the providers in infrastructure proposals, am I right in saying that the Wales a couple of times, Mr Davies, and they are great mass of that was in London and the south-east aware of their challenges, and we are very keen to and very little for Wales? Would you think that will help them and badger them to be successful. have a future impact of, again, Wales doing much worse than anywhere else because of being starved Q146 Chair:Is the problem therefore with the of resources? providers or is it with the customers? Mr Hoban: I do not think I would want to talk down Mr Hoban: If you think about who is on the Work Wales and its prospects. Programme, particularly thinking about the people returning from the Work Programme over the next two Q149 Geraint Davies: No, no, I am talking about or three months, they have been unemployed for at your actions. least three years, often longer, with a range of barriers Mr Hoban: No. What we can see in Wales is a labour to work, and work will be needed with them to market where there are 32,000 more people in work remove those barriers. The providers are operating in this year compared with last year, where there has a quite challenging environment; some of the been private sector job creation. The employment rate provision is subcontracted. That is easier to do in in Wales has gone up over the course of the last year, areas where there is a really strong provider base to so the proportion of the people in the labour market choose from. In Wales, it is a slightly harder pattern. has gone up. That is a positive story, and I just think I was in Swansea last week, talking to people who that, if we are going to try to attract more jobs and were providing the Skills for Work (Wales) more investment into Wales, the last thing that needs Programme, where there have been changes in to happen is for the Welsh economy to be talked providers because the providers have not been up to down. Ev 28 Welsh Affairs Committee: Evidence
3 July 2013 Mark Hoban MP and Martin Brown
Q150 Geraint Davies: No, no. There are private months than in an area, say, where there are lots of sector investors investing. I was just talking about the permanent full-time jobs. Government focusing their spend on the south-east and their cuts in Wales. On these particular figures, Q154 Geraint Davies: What is happening in though, last month we saw that 23% of people in Amazon—indeed, they link together with the Post Wales have entered the Work Programme since it Office as well—is this seasonality, with an enormous began, and this is the lowest of any British region. Is peak, as you have just pointed out, approaching there any explanation for that other than what I am Christmas, and then they lay people off. In that saying—that you are cutting more and spending less context, there is no particular need for the Work in Wales? Programme, is there, because they are just taking Mr Hoban: No. That is complete nonsense, actually. people on and laying them off, and they would do that anyway? Q151 Geraint Davies: Why is it then? Mr Hoban: Mr Davies, the reality is that people on Mr Hoban: If you look at the people coming on to this programme have been failed by the system for the Work Programme, there are criteria that are used over a year before they come on to this programme, to assess whether somebody comes on it. If you are who do not have a job, for whom that seasonality has over the age of 24 and you have been unemployed not worked, because they have been unemployed for more than a year, you will come on to the Work continuously for a year. The fact is that we have got Programme. If you are a young person and you have them into work; we have got them into employment been unemployed for more than nine months, you will for three months. We have been through providing come on to the Work Programme. We are looking at them with training courses, employability skills, CV the main ESA payment groups, which I am sure we writing, and making sure they understand exactly will come on to later on. There are criteria for people what Amazon is looking for. It does mean that some to move into that payment group. There is not some people who have been out of the labour market, out sleight of hand that is happening that says we will put of work for some time, have a job as a consequence. fewer people in Wales on the Programme. The people They have self-esteem and they will be able to look who go on the programme in Wales are those who are after their families. What we need to do and what the eligible to do so. providers need to do is build on that and make sure they get six months’ work and break that cycle of worthlessness that had existed prior to this Q152 Geraint Davies: What I am getting at is why programme. we are less successful in Wales on the Work Programme, because you are suggesting it is not Q155 Mrs James: A recent study was critical of because there are deeper cuts and less investment inadequate support provided for single parents by the from the Government. So what is the reason? Work Programme providers. Wales has a much lower Mr Hoban: The Work Programme is there to get job outcome as in other areas for single parents than people into work—principally in the private sector. the British average. How satisfied are you that the This has shown progress, but the things that the Work Work Programme providers and subcontractors have Programme providers need to think about are better the means to support lone parents? employer engagement and how they provide post- Mr Hoban: That is a really good point, Mrs James. employment support to people on the programme and One of the things I am very conscious of in the work tighten that up. There are some challenges— I have been doing since I came into this post in September is how we ensure that the support for the Q153 Chair: Minister, what you are really saying hardest to help is there. One of the areas where we then, in answer to my question as well as Mr Davies’s, need to do more is around single parents—lone is that the problem that exists is more with the parents. We have set up a best practice group to look providers than with the customers. at a whole range of areas around raising performance. Mr Hoban: I just want to add on one bit to that and I I am keen that they look at single parents. It is not all will come back to your comment. I know that there bad news. Working Links have worked with are some challenges in the labour market in Wales, Gingerbread, for example, and have got people into and, when I went down to see the providers last work, half of them with Marks & Spencer, who are November, they were talking about some of the things very good at supporting lone parents. We need to find in the labour market. One of the big recruiters in the what has worked in that situation and what we can Swansea area is Amazon, and that is very good. It replicate elsewhere, because we need to move more employs a large number of people, but, on the whole, people closer to the labour market. The success of it is temporary work. It is seasonal, so people are laid Working Links has demonstrated that we can do that. off on 24 December. It is good to get some people That needs to happen more often, in more places and into work; it is good for someone’s CV; it gives them for more people. experience; but if you have a labour market where there is a high proportion of temporary jobs, it does Q156 Mrs James: When single parents come to see make it harder to hit the six-month job outcome, me, the biggest challenge is child care. It is just the which is the basis of payment in this scheme. We only logistics of getting affordable child care for the hours pay providers if they get someone to work for six that they need to work to meet the requirements of the months, on the whole. If it is a lot of temporary work Work Programme. That is something that you have in an area, it takes longer to knit together that six picked up on yourself. Do you see a way forward to Welsh Affairs Committee: Evidence Ev 29
3 July 2013 Mark Hoban MP and Martin Brown helping those people a little bit more, giving them that Programme provider to work with the employee and extra support? the employer to get them into work. Mr Hoban: We need to be creative. There is We are also finding that, for many people with additional child care support coming through long-term health conditions, the best route back into universal credit, which will help for those who are work is self-employment, so they can manage their working less than 16 hours a week. That is a positive health needs around their employment. I was in move. We need to do more to ensure that child care Plymouth a couple of weeks ago visiting two is available when the parent wants it, rather than when providers, one of whom was Working Links, who is the child care provider decides to provide it. We are in Wales as well. They are working very closely. I met looking, as part of universal credit, to see what more a young man there who had been out of work through we can do to encourage child care providers to come ill health for 13 years. He had been studying while he forward and offer care at hours that suit parents rather was recovering from his health condition and was now than suit themselves. going to start his own business doing media production, using the skills he had learned but was Q157 Mrs James: My next question is about able to have that flexibility in working practices and creaming and parking. It is about those difficult-to- working hours that helped him manage his work place people—those people who need the extra bit of condition. We need to think more creatively than we help. The Work and Pensions Committee said last have done in the past. month that there was growing evidence that the Work Programme was “failing to reach jobseekers with the Q159 Jonathan Edwards: We have received most severe barriers to employment,” such as evidence during the inquiry from second tier problems with drug and alcohol dependency and subcontractors in Wales that they are not having many literacy and numeracy problems. How satisfied are referrals, if any. Does this indicate that the programme you that the Work Programme is helping those is failing the needs of some participants or, even people? Is there a better way to differentiate the worse, that there is a fundamental flaw in the design payments to support those furthest from the labour of the programme? market—for instance, by taking into account their Mr Hoban: In terms of the type of programme, we challenges? hold the prime contractors to account. They have to Mr Hoban: The payment model we use offers greater have in place the provision that they believe generates incentives for some of the harder to reach, so someone job outcomes, otherwise they will not get paid. So with the most complex needs can earn a provider up there is a very clear focus on the primes. They need to £14,000. Someone with more straightforward needs to make sure that the people to whom they subcontract is probably round about £3,000 to £4,000, so there is are in a position to deliver good outcomes. Actually, that incentive there. Rehab JobFit have a model where they are the There is an issue about what works, and that is why managing agent. Effectively, all of their work is we have set up a best practice group. We need to get subcontracted to the next tier down. providers to think more carefully about the type of I think there is a challenge. People were signed up at provision we have in place to support people to get the start when providers had a different view about back into work, but we should also bear in mind that what was needed in the Work Programme. We have there are some people on the programme who have seen some second tier providers leave the programme; been out of the labour market for some time. We we have seen some come in. The stocktake that was published figures recently on people who have been published last week showed a net reduction in the found fit for work who have been on IB. Some people voluntary and community sector, with the participance have been out of work for 10 to 15 years. Their of only seven, which, given the criticism that there distance from the labour market, if you think about has been in the press, is lower than people would have how much the labour market has changed in that time, thought. It is really about the primes ensuring that the is quite significant. They need more support to get into subcontractors are doing what they want them to do, work, and we need to encourage Work Programme and that is get people into work. providers to do that. They have minimum service standards in place—that is part of their contract—and Q160 Jessica Morden: Can I just ask what has we do audit those standards; and we take that very happened to long-term unemployment since the Work seriously. Programme began in Wales? Mr Hoban: Long-term unemployment has plateaued Q158 Mrs James: The particular challenge that I am across the country since the Work Programme has hearing from many employers is that those jobs are come into force, which demonstrates that— no longer there into which you could slot long-term sickness people if they have been unemployed for a Q161 Jessica Morden: In Wales. long time. They are finding that the challenge is to Mr Hoban: In Wales, Martin? find posts for them. The jobs just are not there. Martin Brown: It is broadly consistent with the UK Mr Hoban: That is an interesting point and we have figures. to work quite hard to support employers. Clearly, the model underpins the Work Programme of wanting to Q162 Jessica Morden: It is increasing though, is it get somebody into work; you only get paid if they get not? into work for six months, or, if you are in an ESA Martin Brown: Its plateau increased a little in the last group, it is three months. That requires the Work few years. Ev 30 Welsh Affairs Committee: Evidence
3 July 2013 Mark Hoban MP and Martin Brown
Q163 Jessica Morden: It has increased rather than— writing these people off, as has happened in the past, yes. What about long-term youth unemployment? when people are stuck on incapacity benefit for years Mr Hoban: Looking at Wales, the change in 18 to 24- without anyone looking at them, we want to make year-olds who have been unemployed for more than sure that we give them help to get back into work. six months has fallen by 16.4%. That is just slightly This is the first time that any Government have less than the rate of the United Kingdom as a whole. launched a major programme to help people who have It has fallen particularly in south-west Wales. been out of work through ill- health back into employment, and it is something that we are proud of. Q164 Jessica Morden: Long-term youth unemployment since May 2010 has almost doubled Q168 Chair: Minister, I have just been doing a quick in Wales at a time when the Work Programme has back-of-the-envelope calculation here. The scheme so come up. far has cost £736 million, I believe, according to a Mr Hoban: Don’t forget that the Work Programme Library note, and 132,000 people have been placed in only came in in 2011 and it is a two-year programme a job, which works out at £5,500 per job, which is not as well. perhaps too bad. It is estimated that the scheme is going to cost up to £5 billion in 2017. So, unless a lot Q165 Jessica Morden: It did. The unemployment more people are getting placed, that would work out trend is going up since the Work Programme began. at a very high figure for each job placement. One of the questions that relates back to Siân James’s Mr Hoban: Mr Davies, the distinction between this question is that the work providers and subcontractors scheme and its predecessors—by the way, the told us in evidence that they were seeing people who Committee might want to go back and look at the were not fit for work. Why do you think that is? figures we published in January 2011 about the cost Mr Hoban: If you are looking at the people who have of the Flexible New Deal programme—is that this been referred to the programme and look at payment scheme predominantly pays for people by results. The group 6, which is the main ESA group, these are Work Programme providers get a small attachment people who have been through a work capability fee. That disappears next year. After that, they are assessment and have had a prognosis that they will only paid if they are successful, so, if no one gets into return to be fit for work within a 12-month period. At work, they do not get paid and it does not cost the the time they joined the programme they clearly were taxpayer. If we spend all £5 billion, it is because the not ready to go to work, otherwise they would be scheme has been phenomenally successful and got claiming JSA. One of the challenges with that group more and more people into work. So that is one area is how you keep them close to the labour market and of public spending perhaps you would like to see go ensure that you give them the right support so that, up. when they are fit to return to work, they get employment. Some of the people I have met who have Q169 Geraint Davies: We did mention Amazon been in payment group 6 have got back into earlier. I have just been thinking that, basically, if we employment long before we expected them to do so. refer someone to Amazon who will be taking up labour anyway—it is normally people they have had Q166 Jessica Morden: We had evidence from before in previous years—and, instead, they take up subcontractors who said they were seeing people with someone they have not taken up, we give them serious medical conditions who were awaiting whatever it is, £3,000, and they do not take on surgical procedures and were asking—I think the someone else, we are not really making much of a quote was—“Why are they on this programme?” difference at all. We are just giving £3,000 to Mr Hoban: You can have a medical condition that is Amazon, who then do not pay any tax, as we know. going to be subject to surgery and still be in a position Mr Hoban: Who is giving £3,000 to Amazon? to work. There are lots of people who have medical conditions. They might be waiting for a hip Q170 Geraint Davies: You are—the Government. replacement, but they are still working. Mr Hoban: No. Sorry, Mr Davies—
Q167 Jessica Morden: I am just telling you what the Q171 Geraint Davies: You give money to people to providers and subcontractors said to us. They are go on to the Work Programme in Amazon, basically seeing people every day and perhaps you are not, and stopping someone else getting a job there. We give that would be their opinion, which I thought was taxpayers’ money to them and then they do not pay interesting. In the last two-year data that came out last any tax. Is that sensible? week, with regard to those ex-incapacity benefit Chair: Let Mr Hoban answer. people who are on the ESA, of the 2,000 that were Mr Hoban: No, sorry, that is a misunderstanding of referred to the Work Programme, there was a job the nature of the programme. We do not give Amazon outcome payment for 10. Do you think that is any money for recruiting somebody through the acceptable? Work Programme. Mr Hoban: No. That is why we are driving up performance and that is why I have asked every Q172 Geraint Davies: You give the provider the provider to come up with an action plan to money. demonstrate how they are going to improve job Mr Hoban: The provider gets paid because they are outcomes for the ESA payment groups, because I working with someone to get them into employment. want them to do that. It is important that, rather than Quite often, these are people who have not been in Welsh Affairs Committee: Evidence Ev 31
3 July 2013 Mark Hoban MP and Martin Brown work for one, two or three years, or even longer meant we set out base skills for the Work Wales periods of time. Your suggestion would be that we Programme, which has been very effective at should write people off who have been out of work improving people’s English language skills. I was in for over a year—that we should not be interested in Swansea last week, awarding certificates for people them. What we are doing in this programme is who have completed a course provided by A19, which equipping people with the skills that they need to be is a very good provider in this area. A more competitive, to go into open competition with others collaborative and more supportive approach from the who perhaps have just come out of work. Welsh Assembly Government will be hugely helpful in getting more people into work. Q173 Geraint Davies: There are not enough jobs, ¦ I suppose. Mr Hoban: There is work. There are an extra 32,000 Q177 Mr Williams: You are looking forward to more people in work in Wales than this time last year, meeting Mr Lewis, the new Minister. How would you so there are more jobs being created. characterise the relationship to date and how you can improve upon that, because it is important? Q174 Geraint Davies: But no more economic output Mr Hoban: I have not met Mr Lewis. I have no across the UK; is that right? previous relationship with him, but I hope that what Mr Hoban: We are seeing more jobs being created. we can show is that there is a way of working together The private sector has created 1.3 million new jobs that will improve job prospects for the long-term since May 2010 and created more jobs in Wales. This unemployed in Wales. That is what I want to do. I do means that people who previously would not have not want to make party political points about it. It is been considered for those jobs are having a chance of not really my style. applying for a job, getting it and getting the dignity that comes from that. Q178 Mr Williams: The reality is that when we visited the providers and subcontractors in Pontypridd Q175 Guto Bebb: Listening to the questioning, to this is very much an important issue for the clients we what extent do you believe that the negative attitude met—the people who I think are being served very of the Welsh Labour establishment in Wales towards well by the providers in England. the Work Programme is having an impact, because we Mr Hoban: Absolutely. In England, what I would have seen, for example, the Welsh Labour characterise is that the really good performers are very Government refuse to allow anybody who is on the good at levering resources of money from different Work Programme to access ESF-funded support areas and working with people across local councils programmes? The Work Programme is all about the and with training providers to maximise resources that black box approach, where you try and ensure that the can be used to help someone get a job. I would like relevant and appropriate training is available to to see the same approach applied in Wales. clients, and yet, in Wales, we are seeing people in dire need of that support being denied this because of a Q179 Mr Williams: The question I was going to ask political decision by the Welsh Government to refuse first is conceivably a bit more negative. There has to allow people on to those ESF-funded programmes. been an assertion made by some of the people who Mr Hoban: You make a very powerful point. There have given evidence about the appropriateness of is an opportunity for this Committee, in a non-partisan some of the employment that people have been given, way, to raise that issue, because it does mean that with the direction of travel in some of that people in Wales are not getting access to training employment. Is that a criticism you are mindful of, courses. If they lived in England, they would get and do you accept the argument that some have access to SFA-funded courses where there is ESF advanced that the payment-by-results model pushes money behind them. That means it is almost as if the providers and subcontractors to place people into Work Programme providers have their arms tied inappropriate employment? You have rightly said that behind their backs. many doors that have been closed to people over a Chair: By coincidence, that very point is about to be long period of time have been opened to them. I am raised by Mark Williams. also mindful of some people who may find themselves out of work who are perhaps inevitably looking a bit Q176 Mr Williams: It is—absolutely. My friend next more selectively at what they do. to me pre-empts me. He raised this issue and you have Mr Hoban: There is a philosophical challenge that we answered very well on that, Minister. What was your have discussed with Work Programme providers. understanding of the Welsh Government’s rationale Some will follow a “work first” approach; the for that decision? Were you notified or consulted important thing is to get someone into a job, get them before the decision was made? into the habit of working, build up their CV and their Mr Hoban: The decision in Wales was made before I attractiveness to employers. Others believe that the took on this role, so it is something we have to live emphasis should be on getting the right job, and that with. It is disappointing. I am very keen to meet the may take some more time. Our model rewards people new Minister, Mr Lewis, to see if we can get a change for getting somebody into work for six months, so the on this, but this is not the only area where there is a employment has to be sustainable. That is the problem. For example, the Welsh Assembly challenge that Work Programme providers are facing, Government will not pay for any skills course or and that is what we pay them to do. In some previous mandate someone to take part in that course. That schemes people have been paid simply for getting Ev 32 Welsh Affairs Committee: Evidence
3 July 2013 Mark Hoban MP and Martin Brown someone into a job. Because we are paying people access through the Work Programme. All I am saying when they get someone into work for six months, it is that it is a very simple thing for the Welsh Assembly really does focus their minds on whether this person Government to do. is in the right job. We were talking earlier on about temporary Q183 Nia Griffith: You are saying they could be employment. The more temporary a job someone has, released. the harder it is to hit the six-month mark, and the more Mr Hoban: I am saying that what should happen is expensive it is for the Work Programme provider to that somebody on the Work Programme should not be deliver that service. So they should be looking for excluded by the Welsh Assembly Government from employers who can offer that prospect of six months’ the Jobs Growth Wales fund. continuous employment because it is good for the provider, it is good for the unemployed and ultimately Q184 Nia Griffith: it is good for the taxpayer. Then how would you see that working out? Presumably then, instead of being funded twice, the Work Programme provider would Q180 Nia Griffith: I would like to bring to your cease to receive money for him because he has already attention the case of Ashley Jones in my constituency, now been looked after. who was forced to go on to the Work Programme in November because he had been unemployed a certain Mr Hoban: It may well be the case that, for that length of time. He did as he was told. He learned to person, the Work Programme has invested time and write a CV; he looked around for work; he diligently money, as they have done on CV-writing courses. tried to do all the things you are supposed to do to get work. He came up with the opportunity, in February, Q185 Nia Griffith: Three months out of two years. to go on to a Jobs Growth Wales Programme with Mr Hoban: Yes, but on the courses; on seeing them someone fitting windows, where there was a good on a monthly or fortnightly basis; on putting them chance of expansion of the company. through other training programmes. So they have As you know, there is an 80% success rate with that invested a lot of money. That may make that person programme of people getting a permanent job then competitive for a job in the Jobs Growth Wales afterwards. Obviously, his motivation now was that it fund. It is not double funding. There is investment was near to his home, much nearer than the job centre there. The Work Programme provider could pick up was to his home, and he would like to get on to this, their payment for the outcome because they put the but he was told he could not leave the Work money in. All I am saying is that it is a very simple Programme. He could not leave it until two years were thing for the Welsh Assembly Government to do. up, so that was going to be another year and three They can say that people on the Work Programme quarters. He was only learning to write a CV there. could take part in Jobs Growth Wales. This was a chance to have a real job at the end of a Jobs Growth Wales Programme. The company is Q186 Nia Griffith: Can we get this absolutely expanding and thought if they took on this youngster straight then? You are saying that Mr Jones, in this in that capacity there would be a job at the end of it. case, would be able to leave the Work Programme. I would just like to ask you why we can’t release You would see some sort of resolution possible with people from the Work Programme so that they can do the Work Programme, provided that you would pay something, because this is presumably what the Work them a certain amount of money for their achievement Programme is about. in the sense that he was prepared to go for this job Mr Hoban: Yes, but why can’t we allow people on now and they obviously deserved some reward for the Work Programme to access Jobs Growth Wales? that, but presumably without incurring the sorts of costs that you would pay them if you were going to Q181 Nia Griffith: But what is the— keep him on there for two years, because three months Mr Hoban: There is a very easy answer to this. It is and two years is obviously different. They would have a very easy answer for the Welsh Assembly an outcome but they would not be providing the Government, and it goes back to the issue about ESF- training for— funded training that Mr Bebb and Mr Williams Mr Hoban: What would happen though, Ms Griffith, mentioned. If Work Programme providers can access is that, if at the end of the period on the Jobs Growth those funds and that programme, it would be fantastic. Wales Programme he fell out of work, then the Work It is a very simple thing for the Welsh Assembly Programme would pick him up again and continue to Government to do. work with him. Q182 Nia Griffith: Essentially, we all understand about not wanting to double-fund this person and Q187 Nia Griffith: Right. You are saying that there wanting him to have the chance and the choice to is absolutely no barrier on your side, so we should be move over to this other programme. Are you saying going to the Welsh Government— that there is no reason why he could not leave the Mr Hoban: Absolutely. Work Programme, because he was being told by the Work Programme providers that he could not leave Q188 Nia Griffith: And ensuring that they will allow their programme? him on to the programme. Mr Hoban: We have similar incentive schemes in the Mr Hoban: I am very happy to work with you on this. UK for young people, which we allow people to Nia Griffith: Good. Thank you very much. Welsh Affairs Committee: Evidence Ev 33
3 July 2013 Mark Hoban MP and Martin Brown
Q189 Chair: I am probably going to repeat the specialist for a particular group, but it does have an question here, but it is a really important consideration 80% success rate in terms of being kept on by the for us. You would be perfectly happy for somebody company. This person qualified absolutely for that. It on the Work Programme to access training via Jobs was an expanding company. This was a super chance Growth Wales, the Welsh scheme—perfectly happy on for them to have, if you like, a subsidised worker in your part. There is no issue for the British order to see whether their expansion plans were really Government in that and there is no European Union going to take off and hopefully then that he would issue either. have a job. Really, what we are saying is that there is Martin Brown: It is worth— absolutely no reason at all, from your point of view, Geraint Davies: And to leave the Work Programme, why he could not have been allowed to take part and because the issue here is the— to take up that post, and, hopefully, would have taken it on, in which case he could have left the Work Q190 Chair: No, no. Let me finish my question. You Programme altogether. I presume if you get a would not need to leave the Work Programme in order permanent job you leave the Work Programme. to access the other scheme, would you? Mr Hoban: No. It helps you get into work. It works Mr Hoban: No. with employers while you are in employment, and, if you come out of work before the two years is up, it is Q191 Chair: But you would be quite happy for the there to pick you up again and try and get you back other scheme to be accessed while somebody was on into work. the Work Programme. Mr Hoban: I have no problems at all about that. It is Q195 Nia Griffith: After six months, that would be an important point that, if someone is on the Work practically coming up for a year having being on the Programme for two years, it means there is a Work Programme. He would be allowed to stay on commitment from the Work Programme provider to that Work Programme for another year, following that, provide support for that person in that two-year while he was initially in that employment. There is period. It could be support to get someone into work, absolutely no reason, from your point of view, why support while someone is in work, or support when that cannot be the case. From what you are saying, it someone drops out of work to get them back in. It is is a matter that we need to take up with the Welsh a two-year programme because we want to catch Minister in terms of why that person could not be people who fall out. That is why it would be wrong accepted. for someone to come off the programme. They would Mr Hoban: I get very cross and angry when petty lose the opportunity of that post-employment support. rules stop people like your constituent getting a job. I am very happy to have a discussion with Mr Lewis We should all share the desire to get more people into to find a way that would enable people to access those work, and having a rule that seems to be based on funds and the ESF-funded training. some ideology just goes against where I am at in helping people into employment. Q192 Chair: Why do you think the Assembly are rather negative about this idea? If it is about getting Q196 Guto Bebb: Just picking you up on that issue people into work, surely this is something we all agree then, would you be able to provide the Committee with? What reason have they given you for their with evidence of where similar programmes have been negativity towards this? utilised by Work Programme clients in other parts of Mr Hoban: It goes back to this argument about the United Kingdom? double funding. Mr Hoban: Yes, absolutely. I can give you a very easy Martin Brown: The genesis of it was around the black example now. We mandate people into skills training box description and a view from the Welsh for English language. In England, those courses are Government that anything that was required while provided by the SFA; in Wales, we have to fund somebody was on the Work Programme was for the them ourselves. Work Programme providers to fund. It is also worth Chair: Mr Bebb would you like to ask any further bearing in mind the criteria for Jobs Growth Wales; questions? their eligibility criteria are people that are job-ready. It is for six months only and it is for 16 to 24-year-olds. Q197 Guto Bebb: I will carry on then. The question I had for you was to what extent are you frustrated by Q193 Chair: Forgive me for asking a probably your discussions with the Welsh Government on the obvious question, but why does it matter if somebody way in which the Work Programme can be utilised by gets more funding? If we are talking about somebody people in Wales? Clearly, we have touched upon this who has been difficult to place into a job, why are any but, in terms of the ability to get the message across of us concerned if they are being funded by two to businesses, to what extent are you allowing Work groups of people instead of one? Programme providers the freedom to communicate Mr Hoban: Mr Davies, it is a mystery to me, too. effectively with the business community, and do you believe that the failure of other Government agencies Q194 Nia Griffith: I can understand why people do to support any communication effort is a problem in not want double funding. People can say it is the Welsh context, in view of the figures that we have unreasonable, in times of austerity, to fund someone from Wales? twice, but I am very interested in the Minister’s point Mr Hoban: As far as I am concerned, providers can here. Jobs Growth Wales is, as Martin Brown says, go out there and talk to any businesses they want. Ev 34 Welsh Affairs Committee: Evidence
3 July 2013 Mark Hoban MP and Martin Brown
They have to, because they have a pool of people and 24. As a result of that, the local branch of the whom they need to place into work. They need to FSB asked me why we limit that incentive to those go out and find those jobs, and there are some very between 18 and 24. In my parts of Wales, for example, successful examples of employer engagement across I have the second highest average age of any the Work Programme. I think I am right in saying, constituency, and one of the issues that we have is Martin, that Jobcentre Plus and the two Work people over the age of 55 who are still looking for Programmes share out the vacancies. That is a good employment. Would the Department be willing to look sign of that collaboration. Work providers—I know at a similar incentive, which, by the way, has proved that the two in Wales do—need to improve their a great success? We have had real job outcomes as a employer engagement effort. They need to increase result of that mailshot, I am glad to say, but would the the supply of jobs that are available to people who Department be willing to look at something similar have been out of work for some time. for other more difficult-to- support clients within the Work Programme? Q198 Guto Bebb: Now on a specific issue, I am a Mr Hoban: The financial incentive—the £2,275—is regular visitor to Work Programme providers in the part of the youth contract, so it is targeted at 18 to 24- county of Conwy, who are doing sterling work in my year-olds. Wage incentives have a chequered history view. One of the things that they have highlighted is in their effectiveness, and we saw with the Future Jobs the fact that they are having a huge take-up in the Fund that it led to public sector jobs being created on self-employment option. Could you just clarify the a short-term basis. The work is sustained. We have extent to which the self-employed support structure of sought to go down other routes. The wage incentive the Welsh Government is open to Work Programme is enough to encourage people to recruit young people clients? and create a job that only lasts for six months. We Mr Hoban: This is the point I hand across to Martin. need to think quite carefully about what additional Martin Brown: That is one area where I am pleased support we can give to older workers. Particularly, one to say we have managed to make some progress and of the challenges—we have touched on it earlier on to get access for people on the Work Programme, with Ms Jones—is where people’s skills get them which I was delighted to achieve. back into the labour market and perhaps trying to encourage work experience for older workers, to give Q199 Guto Bebb: Interestingly, the European them a flavour of what different jobs are out there. funding of that type of support in Wales is very similar That would be good as well. to the European funding of the ESF programme. So why do you think you have had success with one part Q202 Jessica Morden: Two years now into the Work of the Welsh Government and not with another? Programme, what are the figures in Wales for the Martin Brown: I would not claim to be an expert in people who are returning to Jobcentre Plus? the intricate details of European funding, but it is from Mr Hoban: In June, Rehab JobFit returned 1,327 a different pot from within ESF, which is one of the people and Working Links 1,320.1 reasons we have managed to open up that opportunity in Wales. Q203 Jessica Morden: After two years, can you explain now what the new regime is? Q200 Guto Bebb: You are being very generous with Mr Hoban: We have something called the Mandatory the Welsh Government in that respect. In terms of the Intervention Regime. It applies to all those returning self-employed option, are you willing to reconfigure from the Work Programme. It is modelled on some of the targets for Work Programme providers in something called Ongoing Case Management, which rural parts of Wales, where my understanding is that was piloted in Leicestershire and Derbyshire last year. the self-employed option is proving to be significantly It looks at two things. The first is people who still more popular than was originally modelled by the have complex barriers to resolve. We talked earlier on Department? about some people who are very far from the labour Mr Hoban: Sorry, significantly more—I did not catch market. The Work Programme will move them closer, the last part. but there may be still some work to do. There is a Guto Bebb: More popular than what was modelled dedicated team of advisers at each job centre who by the Department originally. work closely with them, identifying alternative Mr Hoban: They get rewarded for getting somebody provision or support they need to remove those into work for six months, and that could include barriers. Some people are seen in the job centre more self-employment. They can change that mix without often, which is also a good thing. Daily signing on there being a financial penalty on them. One of the has been recommended for a number of participants. things that has been very successful from Work Martin, do you want to talk a bit about the experience? Programme providers is this emphasis on Martin Brown: Yes, sure. It is early days in terms of self-employment. It has given a lot of people a new seeing some of these people come back to job centres, lease of life, and I am very keen to support but the Minister is absolutely right. The focus for my self-employment through the Work Programme. teams is very much around carrying on where the Q201 Guto Bebb: I recently was involved in doing 1 Note by witness: the number given by MfE is based on a short term forecast that was issued to individual Work a mailshot on behalf of the two Work Programme Programme providers for planning purposes. DWP would not providers, highlighting the fact that there is a financial regard this as an official statistic. UKSA have released a incentive to take on people between the ages of 18 report endorsing this view. Welsh Affairs Committee: Evidence Ev 35
3 July 2013 Mark Hoban MP and Martin Brown
Work Programme has left off. We get a detailed action very quickly and very easily. The people going on the plan straight from the Work Programme providers, Work Programme are the 10% of people who have not explaining what they have done and the distance that got back into work a year after signing on. I think for person has progressed in the two years, so that we are most people you do not need a very intensive or able to build on that. Rather than starting from scratch, intrusive regime, and what we are demonstrating is we go back and make sure that the fundamental things that, as we get fewer and fewer numbers, fewer and have been addressed—that basic skills have been fewer people looking for work compared with when addressed, such as CV skills—so that we are orienting they first signed on, we need to make sure that the people back into the labour market in the way that we intensity of the regime matches that and we give them need to and trying some different approaches, as the support. That is exactly where we will look at what Minister said, in terms of more regular attendance and has happened on the pilots. A combination of these group information sessions, so that we can help people measures really was effective, but, as I have said, move on as quickly as possible. there are people who will have barriers to work that we need to remove. There are people whose barrier to Q204 Jessica Morden: It sounds like you do not work is really one of attitude, and sometimes a closer have much confidence in the process so far if you are relationship with Jobcentre Plus helps that. going back and checking CV training and interview techniques and that kind of thing. Q208 Geraint Davies: What if the problem is that Martin Brown: It is only right that we check that there there simply are not any jobs nearby because of the is nothing fundamental stopping somebody’s progress. state of the economy? We are basically saying that, if The one thing that I noticed from the work I do every somebody is on the Work Programme for two years day is how quickly the labour market moves and is and then they are not in a job, which is presumably changing in Wales. Making sure that people have the quite a lot of them, and they also maybe have complex skills to engage in the labour market today in some barriers like disabilities, they do not have any money cases requires things that are different from when they and you are requiring them to sign on daily and work entered the Work Programme two years ago. harder for jobs that do not exist, is that not just harassment and cruelty? Q205 Jessica Morden: The language that you use for Mr Hoban: Mr Davies, you are unduly pessimistic. If the post-Work Programme programme is addressing you look at this, the number of private sector jobs in people with complex needs and you talk about Wales has increased by 46,000 since May 2010. There support, but, in the press releases you have put out are 32,000 more people in work in Wales than this about it, it is about a tough approach to get them into time last year. None of us should be complacent about a job, an intensive and uncompromising regime, what is happening, but, equally, we need to be very stepping up the pressure on claimants, and rigorous careful that we do not talk down the economy to the monitoring. It sounds a very harsh regime. Earlier on people of Wales because the figures do not bear out you admitted that people—ex- incapacity benefit claimants—might have quite complex needs and need your analysis. a lot of support. Are you not then addressing a really harsh regime for people who, as you have admitted Q209 Geraint Davies: My understanding, Chair, is yourself, might just need some more support? that there are 36 people chasing every job in the Mr Hoban: There are some people who definitely do Rhondda, for instance. I know there is a theoretical need more support, but also there are people who have “get on your bike” and all this sort of stuff, but, if been out of work for some time who have no barriers there are not local jobs and you are basically forcing to returning to work. people to sign on every day and they are doing everything they can but there is nothing more they can Q206 Jessica Morden: Why is that not in your press do, is that fair? release then? Mr Hoban: We expect people to be able to apply for Mr Hoban: Sorry? vacancies within 90 minutes’ travel journey time from Jessica Morden: Why is that not in the press release their home. There may not be a job in their nearest that you have put out? Why is it all about being harsh town, but we do expect people to travel further to find and rigorous? a job. Mr Hoban: Because there is an element that is about Chair: Mr Davies, I am going to have to call Glyn being much more intensive. There is something there Davies next. that people need to do and we do rigorously monitor the programme. It is absolutely right that we do that Q210 Glyn Davies: Minister, can I just say at the because we are spending taxpayers’ money. I have start how inspirational I find it to have a coalition talked to Jobcentre Plus advisers who feel that daily Minister coming here and standing his ground with signing on has got some people to face up to what is real robustness and being incredibly in favour of happening in their lives. trying to change the lives of those who have been most difficult of all to reach. I would have thought it Q207 Jessica Morden: But should that not have is one of the worthiest objectives, and it is absolutely happened on the Work Programme? superb that you are willing to stand your ground on Mr Hoban: You can make the argument it should what is a hugely important scheme that the have happened when they first sign on at Jobcentre Government have given great value to. I certainly give Plus. The vast majority of people get back into work it the value. The two Mr Davies have a very different Ev 36 Welsh Affairs Committee: Evidence
3 July 2013 Mark Hoban MP and Martin Brown attitude towards you. [Hon. Members: “Give him a bureaucracy that occasionally causes a problem. As job!”] you probably are aware, the two Work Programme Chair: Order, order. To be fair, Mr Hoban has actually providers in my part of the world in Conwy are both given very good evidence. Even if you do not agree subcontractors, and one of them is A4E. I recently with him, he certainly knows his brief. I do not say worked extremely hard to manage the transfer of an that lightly. A4E client from Birkenhead, who wanted to be Glyn Davies: Having suffered the wrath of my transferred to the A4E provider in my own opponents opposite, to me, it is an inspirational constituency, but, because the A4E provider in my scheme in its objectives. What we are looking for— constituency was a subcontractor and not a main and what you are always looking for—is a way in contractor, it needed the intervention of an MP in which you might be able to change things so that it order to facilitate that transfer. Can you give us some delivers more. One of the issues that occur to me is certainty that that sort of bureaucratic problem can be identifying an exact period of time for a programme. dealt with in order to allow somebody to carry on It may well be that for some people the right length accessing the Work Programme even if they have of programme might be three years or it might be moved? shorter. For the most difficult people to reach, Mr Hoban: It is interesting you raise that. I had a particularly those with complex health problems, have similar issue raised with me in one of my regional you ever thought that you might even consider visits by a Work Programme provider. There is no lengthening the programme in certain circumstances? reason why they cannot transfer, as far as I am aware. Mr Hoban: Mr Davies, you flag an important issue I am sorry, but I am the wrong person to ask. There and it is one that we are thinking about very carefully. is no reason why they cannot transfer and I am rather It is about increased segmentation and trying to bemused that this does not happen2. identify more closely people’s needs, and relating that both to the level of payment but also to what other Q213 Guto Bebb: I have to come back on that issue changes one might want to make to the scheme. then because I hosted a breakfast for the Employment People do have different barriers to work. They have Related Services Association and the same complaint a different complexity of barriers to work, and they was raised at that breakfast as well. If there is no may take different times to eliminate those barriers. issue, could you provide MPs or the Committee with That is partly why the Mandatory Intervention Regime some guidance on that because it is an issue of is there so that, for those who still have barriers when concern? they have finished the Work Programme, that work Mr Hoban: It is. I will try and go one better than that; does not stop and we just abandon them. There is I will make sure that we tell the providers there is no more we can continue to do. So we are always looking issue, since that is where the blockage is. We will for ways in which to improve it and trying to make make sure that they have that message very clearly. sure the support that is given matches the need. Guto Bebb: It is appreciated. We need to do a bit more work in understanding why Chair: Thank you very much indeed, Minister. That it is that people perhaps have not been helped by the concludes our session, but I do say this again. It is Work Programme. Are there particular groups of refreshing to have somebody here who has clearly people who need more support and how do we mastered their brief properly, and it has not always respond to that? Martin and his team, not just in Wales happened with coalition Ministers. I am not going to but across the country, are undertaking exit interviews name and shame or curry favour with anyone, but I for people who return from the Work Programme and do appreciate that you have certainly done so on this we are looking at that data quite carefully, to occasion. Thank you very much. understand who it has worked for and who it has not worked for. That will help inform not just the shape of the Work Programme in the future but also, 2 Note by witness: Once a participant is referred to a Work perhaps, some pre-Work Programme support we can Programme provider they will remain with the same provider offer as well. who is contractually obligated to provide continuous support to a participant for the whole of their 104 weeks time on the Work Programme. If a participant (regardless of claimant Q211 Glyn Davies: Every one that you get into a job group) changes address to one outside the contract package could well be a life saved—certainly a life saved in area it is for the original provider to arrange adequate support terms of its value. via themselves and their strategic partners to deliver the service requirement until the end of their 104 weeks allotted Mr Hoban: Absolutely. We underestimate, at our time. peril, the importance of work to people for their The rationale behind remaining with the same provider is dignity, self-esteem and health. that individuals are randomly allocated to Work Programme providers to ensure that each provider has an equal share of participants, and this provides a firm basis for drawing Q212 Guto Bebb: As you have probably gathered, I relative performance judgements. For this reason it is not am a big fan of the Work Programme, but you did possible for claimants to choose their Work Programme mention that you were frustrated by the petty provider or move to another. Welsh Affairs Committee: Evidence Ev 37
Written evidence
Written evidence from Oxfam Cymru (WPW 01) 1. About Us Oxfam works with others to overcome poverty and suffering. Oxfam works to overcome poverty in Wales in three ways: — by developing projects with people living in poverty that improve their lives and show others how things can change; — by raising public awareness of poverty to create pressure for change; and — by working with policymakers to tackle the causes of poverty. For further details about Oxfam’s work in the UK, see www.oxfam.org.uk/ . The evidence presented in this submission is gathered from Oxfam’s partners in Wales who have direct experience of the Work Programme.
2. Summary 2.1 There is an issue around the inability of individuals on the Work Programme to access relevant, local training provision. For example, because of concerns regarding “double funding”, those on the Work Programme are unable to access publically funded basic skills courses to improve literacy but neither will the Work Programme contractor provide this training. 2.2 The payment by results model is encouraging prime contractors to adopt a “traffic light” approach to supporting individuals on the Work Programme. Those with significant barriers to work, for example poor literacy and numeracy, drug or alcohol problems are coded “red” and deemed too far from the labour market to warrant investment in training or work placements. 2.3 The Work Programme is interfering with some people’s aspirations to set up their own business. People on the Work Programme have been unable to access local business set up support and training. 2.4 In some instances, individuals are being encouraged to take up employment that does not match their skills or aspirations despite local training and support being available to enable people to access employment in their chosen field. This will have long term implications for the career prospects of the individuals concerned.
3. Lack of Joined Up Service Provision 3.1 Individuals within Wales are suffering as a result of the Welsh and UK Government’s inability to put aside political differences to develop comprehensive and complementary learning, training and work based support for unemployed Welsh people trying to access the labour market. 3.2 Although suitable training may be available locally, individuals may not be able to access this training due to provider concerns over double funding and Work Programme providers seem reluctant to provide an alternative. This is leaving some people on the Work Programme with no hope for the future resulting in significant stress and other mental health issues. 3.3 Welsh and UK Government employment support needs to be joined up to provide a seamless service that does not disadvantage people trying to access the labour market in Wales. This includes ensuring individuals can access suitable training regardless of who funds that training.
4. Payment by Results 4.1 The lack of any clear guidance from UK Government on how prime contractors deliver the Work Programme and the payment by results model has led to some providers targeting support and associated investment at those closest to the labour market. This is effectively leaving a group of already marginalised people in a “parked” situation with no progression plan, no training, no access to work placements and with no opportunity to look elsewhere for the support they need. 4.2 There is evidence that some Work Programme providers adopt a “traffic light” system whereby people needing intensive support such as those with poor literacy or drug or alcohol problems are classed as “red”. Those classed as “red” are deemed to be so far removed from the labour market that the prime contractor will not invest time or money on them. 4.3 This lack of investment is causing a downward spiral in the livelihood of the individuals involved leading to serious consequences in physical and mental health. 4.4 It is totally unacceptable that a UK Government programme aimed at getting people into work is not available to those who need it most. All people accessing employment support in Wales should receive a comprehensive and seamless service providing them with appropriate training, skills, mentoring and work placements relevant to their needs and regardless of their distance from the labour market. Ev 38 Welsh Affairs Committee: Evidence
5. Case Study Evidence 5.1 Recording of “James’ Experience” by RCT-based Development Worker 5.1.1 I am a Community Development Worker in a small village within Rhondda Cynon Taf and for a number of years I’ve been supporting a young man called James. James is illiterate; He struggles spelling anything more than his name and address (purely due to familiarity). As part of my role, I also facilitate the adult learning programme in my community and therefore attempted to enrol James onto a Basic Skills course. However, it soon became apparent that James had been enrolled on the “Work Programme” a few months beforehand (He just didn’t understand/know it), and that he was ineligible to participate in any other training than that provided by his Works Programme provider—“Job Fit”, due to double-funding. 5.1.2 A couple of months later following weekly visits from James (asking for help to find a job), I realised that he had still not participated in any training, nor had been put on a work placement. I found this very frustrating as in my opinion an opportunity for James to improve his literacy during this time has been wasted. Also, by not having basic literacy skills, this is extremely limiting to what training/placements he can attend. 5.1.3 I therefore asked James if I could join him on his next “Job Fit” visit so I could at least provide some personal support in his future development. At the beginning of October, I joined James at his appointment, dressed in “civvies” and introduced myself as “someone here to help James”. James’ usual advisor introduced himself and told me that the system had now changed; James would now be seen once a month and that he had been allocated a new advisor. 5.1.4 We sat with another member of the team whilst he spent 10 minutes trying to print out a letter. On the screen, I managed to spot quotes stating “James said …, James did …”, where in fact, no such conversation took place; The only thing that was said to James were apologies for the computer for taking so long. Finally, James was presented with a letter and the team member stated “Here you are—we’ll see you next month then!”. 5.1.5 It was at this point that I intervened “So, is James able to have a one-to-one conversation with someone?” I asked. “No sorry, he’ll have to wait till next month now” was the reply. I then asked if we could at least see someone because this was James’ designated one-to-one appointment and that we’d both come together today especially so that we can arrange a structured learning programme to help with James’ progression. It was at this point that the room quietened with the other advisors stopping to stare at me and I was approached by James’ (now) ex advisor (who left his own client to make a weak ploy to “contain” my request). I calmly told this advisor of my frustrations; that I just want to help James progress, that the current system has removed my ability to help with James’ learning/academic progression and that I just want to sit with James and his advisor to devise a learning/progress plan together so that James can do something other than just pop into the office to collect a letter once a month. Again, I was told that we would have to wait until next month because “his new advisor is not in today”. It was at this point that James and I left the premises. 5.1.6 Although this whole event was very civil, I was extremely angry to discover that this is how people are being treated on the Works Programme and that private organisations are being paid by the DWP to deliver such a despicable “service”. I know numerous people (like James), that first and foremost, need to be able to read and write, but are being denied the chance because they are on the so-called “Works Programme” where I am yet to see one person from my community receive training or a work placement. On this occasion, James has even been denied a conversation just to discuss said opportunities. He also tells me that all his previous appointments have been exactly the same and from what I experienced, I believe this is not a unique event. I see this as a massive step back, a waste in public resources and detrimental to the personal development of the unemployed. 5.1.7 A month later I join James at his one-to-one interview. As we walked in, we were greeted by James’ original advisor (called Matthew for the purposes of this document), and was told that he had now been referred back to him. I told Matthew how desperate James is to get back into work, training or anything as the more time he spends doing nothing, the more he is inclined to drink alcohol and it is starting to become a serious problem. “All I want is a placement” said James, Matthew told me that they no longer do placements. “What about training?” I asked, “We don’t do training either”. I therefore asked Matthew, in the kindest possible fashion, what is the point of the “work programme”? What do they actually do with people like James because all I can see is that they get sanctioned if they don’t turn up. Both James and I were then asked to join Matthew to have a private chat upstairs with the manager. 5.1.8 I was then told by Matthew, with confirmation of the manager that all those put on the work programme are classified into green, amber and red categories; Green being the most likely to gain Employment (and therefore warrant support and training), red being the least likely to gain employment (where support was is significantly decreased—I suspect because the company is less likely to get a return on any investment). 5.1.9 I then informed the staff that I run a weekly work support club in my community and that many of my clients would be classified as “red” by their standards (clients with literacy needs, ill health and long term employment). It is also these same people that turn to alcohol and disclose suicidal intentions to me on a regular basis because they are so frustrated that they can’t find employment and can’t see anything improving in the near future. Welsh Affairs Committee: Evidence Ev 39
As James has already started to turn to alcohol, I said that this was purely due to his need to be kept occupied; All he wants to do is work or learn and that by not investing time in what they have categorised as the “red” population, this will only create more mental health problems, make said individuals more unemployable and will increase suicide rates (taken from my own personal experiences). I stated that if something wasn’t done with James, then the likelihood of him becoming an alcoholic, experiencing a sever deterioration in health and decreasing his chances of ever getting a job would be due to this “work programme”. I also tried to put this across in financial terms stating that although there is a saving by not investing in this person, costs to the government in health related illnesses would subsequently and substantially rise. As this is a private organisation, subcontracted by the DWP to deliver this programme, the employees did not seem to care. I even asked them if they wanted to join me and a few other concerned persons on taking these issues forward to discuss with our AM, but again, they were not interested. However, once I mentioned that I was going to take the fact that there is a flawed system that is detrimental to the care and health of its clients to my contacts within Government, suddenly options became available; where they earlier told me that they didn’t do work placements, they told me that they would try and get an eight week placement for James as soon as possible and where they told me that they didn’t do training, they offered James one day a week of Basic Skills and one day a week of Computer Skills. This was great news for James, however, it only became available once they knew I was sincere about taking the issue further. It also begs the question about the rest of the population who have been classified as “red”; James has been fortunate in this case that he has a support worker to help put his point across. Most will have no assistance at all and will inevitably become a detrimental outcome of this Government initiative.
5.2 Recording of “Nigel’s Experience” by RCT-based Development Worker 5.2.1 I am a Community Development Worker in small village within Rhondda Cynon Taf and organise the learning programme for my local community. In September, I was made aware of a “Care Fayre” that was due to take place in the local job centre. The “Care Fayre” consisted of an open day where a number of private and public residential care home employers were looking to take on more staff. In reaction to this, I recruited some interested parties from my local job club and organised a training package to provide them with a better opportunity to impress said employers. I therefore arranged a First Aid Course, a Food Hygiene Course and a Manual Handling Course prior to this open day (the most that I could manage given the short time restrictions). Out of the 10 interested parties, one young man called Nigel, eager to work in the care industry, informed me that he had recently been registered on the work programme and asked if he was still eligible to attend. I explained that I could not personally fund his training due to the double-funding issue (being EU funded myself), but would be happy for him to still attend if his work programme provider were to cover his particular cost (about £25 per course). I therefore asked Nigel to have this conversation with his WP provider to which he came back a week later with resounding “no”. If this were to be the case, out of the 10 people that were to visit the Care Fayre, this would make Nigel the least “qualified” out of the 10 that were just from his community alone, never mind the competition from other areas. The irony about this was that Nigel was the only person on a work-related programme and purely as a result of this, now had the weakest chance of employment amongst his fellow community members. This programme is therefore restricting people into work rather than providing them with better opportunities. I decided call his Work Programme Advisor to present him with the ridiculousness of this situation. After being told repeatedly that they could not invest in Nigel unless they had a concrete offer of a job, I was then transferred to the WP Manager who again repeated the statement of her junior staff. I then politely tried to get her to see the reasoning for my call, reiterating the fact that I am not permitted to train Nigel but they can and unless if they could support the cost of his training, he would have at least nine other people that would be more employable than him attending this event. I also pointed out that an employer would naturally rather have job-ready staff, rather than people they would have to employ and then train before they can even begin, regardless who will pay for any training. I was then given the very straight answer “If we paid for everyone to do some training, then we wouldn’t have any money left!” I tried to argue my case stating that for just £25 per course (with a maximum of three different vocational courses), Nigel would be more job ready and therefore more attractive to future employers—even stating that the “qualifications” are completely transferable into any industry. I couldn’t get the Manager to agree to pay for a single course and therefore ended the conversation. 5.2.2 Fortunately, I found an independent charity who agreed to pay for Nigel’s Food Hygiene course. However, Nigel attended the Care Fayre with nine others from his community, all others having the additional Manual Handling and First Aid certificates. Two of whom found employment that day. Nigel is still on the work programme and is still looking for paid employment. He has still not received any further training.
5.3 Recording of “Gemma’s Experience” by Cardiff-based Development Worker 5.3.1 Gemma is a very bright 19 year old with a Level 2 in Business Administration. We offered her a work placement at our Community Development Centre to help improve her practical administration skills. She wants to pursue a career in administration and we hoped to offer her a six month placement as part of Jobs Growth Wales (the second phase of Future Jobs Fund in Wales). We hoped that with this additional administration experience she would be able to build up her CV and gain employment in her chosen field. 5.3.2 Gemma was then placed on the Work Programme which in my view severely restricted her career opportunities. Gemma has confidence issues and found it difficult to question her Work Programme advisor. Ev 40 Welsh Affairs Committee: Evidence
Despite Gemma’s requests the Work Programme contractor would not support her in furthering her experience in administration. She was told to apply for a job at a local cash and carry and is now working there following a successful interview. In my view, Gemma was steered in the wrong direction and made to take any job regardless of her career aspirations or skills match. December 2012
Written evidence from Citizens Advice Cymru (WPW 02) Summary of Recommendations Poor administration of sanctions is a main area of concern for the Citizens Advice Cymru service and we recommend: — Improved administration to ensure that sanctions do not arise because of, for example, failure to record sickness or inability to attend where this has been notified. — Robust safeguards to protect claimants from inappropriate sanction must be put in place. When drawing up the claimant commitment and considering sanctions, guidance must ensure that Jobcentre Plus advisers consider: — whether there is any long-term health condition or impairment for which reasonable adjustments need to be made; — with clients permission a summary of claimants health record to be checked by Jobcentre Plus prior to claimant commitment being drawn up or sanctions being imposed (see further information under General welfare reform/health heading below); and — whether there is suitable childcare available for the claimant’s children.
1. Introduction 1.1 Citizens Advice Cymru welcomes the opportunity to submit evidence to this inquiry. In the 12 months to September 2012 Citizens Advice Bureaux in Wales saw 153,482 clients and helped with 458,513 issues. Benefits/tax credits and debt are the two biggest areas of advice and account for just over 75% of issues advised on. 1.2 Between October 2011 and September 2012 Citizens Advice Bureaux in Wales have responded to 1,607 employment enquiries of which 118 were specifically about schemes for the unemployed representing a 51% annual change comparing the last 4 quarters with the previous 4 quarters. 1.3 Groups at risk of poverty are over-represented among Citizens Advice Bureaux clients in Wales:1 44.5% of clients are disabled or have a long term health problem; 16.3% identify as permanently disabled; 15.8% are lone parents with dependent children; and 1% are either homeless or living in hostels. 1.4 The following qualitative evidence is for the most taken from bureaux across Wales. However, we have also included some pertinent evidence submitted from a small selection of partners including Swansea Social Services, Swansea Community Mental Health, and a small selection from our Bureaux in England. 1.5 Whilst our case recording system does not specifically provide data for the number of CAB clients seeking advice in relation to a problem with the Work Programme itself, we have been able to extract some pertinent evidence and case studies which we submit are illustrative of the core issues that our clients have with the Work Programme and other related issues. 1.6 Our main findings demonstrate that there are issues in regard to the administration of Work Programme related sanctions. Therefore, this will contribute to the larger part of this submission. 1.7 Specifically, evidence demonstrates issues with regard to the administration and application of the sanctions regime on claimants that suffer from mental ill health and/or learning disabilities. 1.8 Our evidence is in respect of clients who have had problems with their engagement with or access to the Work Programme and we do not have evidence of the positive effects of the Programme in terms of its effectiveness in assisting people to return to work. However, there was a recent press release and you can view the latest figures from the DWP here.2 1.9 From an operational point of view, Conwy CAB has a role as a provider of CAB telephone advice and casework to Working Links participants across Wales. This makes the CAB service a small part of Working 1 For the period to September 2012 2 27 November 2012—Work Programme is getting people working/ available @ http://www.dwp.gov.uk/newsroom/press-releases/ 2012/nov-2012/dwp128–12.shtml; and Work Programme statistics (general)available @ http://research.dwp.gov.uk/asd/ index.php?page=wp Welsh Affairs Committee: Evidence Ev 41
Link’s supply chain and we are classed as a specialist provider. Some bureaux in England are in similar relationships with other Prime Contractors; this will briefly be discussed.
2. CAB Service Partnership with Working Links in Wales 2.1 In our agreements with Prime Contractors CAB specified the following: — CAB were not prepared to be on the receiving end of any mandated activity (ie participants should not be required to seek our advice); and — with all Primes, CAB retained the right to carry out any social policy work on the Work Programme, as and when required by our evidence. 2.2 We are happy to report that in general, Conwy CAB confirms that this partnership works well. However, it has been noted that referrals from Working Links into the CAB service are quite low.
3. Problems Administering Work Programme-related Sanctions 3.1 Bureaux across Wales and the UK have seen similar patterns of issues arising from Work Programme- related sanctions. In particular, there are a number of cases where claimants have not been advised that they can dispute a sanction decision within the given “five working day” window if they wish to claim “good cause”. Consequently, according to our evidence, sanctions are, in many cases, being applied inappropriately. Claimants are then left with very limited options. We have found that often these sanctions unnecessarily contribute towards a deterioration in the personal health and wellbeing of our clients. 3.2 Sanctions: The rules for sanctions have changed recently on 22 October 2012.3 They have been revised to be considerably more punitive with new “escalation” rules punishing claimants with sanctions for up to three years if they repeatedly fail to participate.4 However, as most of the evidence provided in this submission relates to issues arising prior to October, the older rules are worth a brief mention. Further, much of the old rules with regard to “good cause” (now called “good reason”) remain intact and the DWP have said that they will apply “good reason” in the same way as “good cause” has historically been applied.5 However, the new rules are less generous and do allow more discretion for the DWP in terms of interpreting “good reason”.6 This will likely have the effect of working against claimants in terms of their options to claim “good reason”, although this has yet to be demonstrated in practice. 3.3 Good Cause: There are a number of things that must happen prior to the DWP being able to impose a sanction. Firstly, a claimant must fail to participate in a mandated activity without “good cause”.7 Secondly, a claimant must have previously been notified in writing what was expected of them and what would be the consequences should they fail to participate.8 Further, a sanction may not be imposed within “five working days” of the notice of failure;9 this gives the claimant a vital opportunity, within this five day window, to demonstrate whether or not they believe they have “good cause” within this five day window prior to a sanction being applied.10 Importantly, the DWP must take account of all the circumstances of the case, including and in particular a claimant’s physical or mental health or condition.11
4. Evidence: Failure to Allow for “Good Cause”—Case Studies 4.1 Below are some case studies, to serve as examples where sanctions are being applied irrespective of whether claimants have had an opportunity to demonstrate “good cause”. These have been subdivided and sub- headed for ease of reference. Case A—Sanctions/failure to allow for “good cause” (conflicting mandatory appointment) 45 year old male who sought advice from a Citizens Advice Bureau in the South Wales, has had his JSA stopped (joint JSA with partner) because he did not attend a Jobcentre Plus interview. He was actually attending a Work Programme job-search appointment at the time and could not be in two places at once. An adviser from the Work Programme provider had phoned the Jobcentre Plus office and testified for the client, but they refused to withdraw the sanction despite “good cause”. Case B—Sanctions/failure to account for “good cause” (conflicting mandatory appointment) A man who sought advice from a Citizens Advice Bureau in South East Wales, had a Working Links interview on the same afternoon as he was due to sign on JSA. He said the Working Links advisor told him there was no problem and that he did not have to sign on that day. As a result of not attending the interview at the Jobcentre Pls office, he was sanctioned. He appealed this decision and made a complaint. 3 The Jobseeker’s Allowance (Sanctions) (Amendment) Regulations 2012 4 As outlined in the Welfare Reform Act 2012, s46 (which replaces s19 of the Jobseekers Act 1995) 5 Explanatory Memorandum to The Jobseeker’s Allowance (Sanctions)(Amendment) Regulations 2012, para 7.18 6 ibid 7 The Jobseeker’s Allowance (Employment, Skills and Enterprise Scheme) Regulations 2011, reg 6 8 Ibid, reg 4 9 Ibid, (reg 7 (1)) 10 ibid 11 Ibid, (reg 7(3) Ev 42 Welsh Affairs Committee: Evidence
He was then interviewed regarding his JSA. He was asked if he continued to look for work during the sanction period and he said that he had looked for work during the sanction period, but not to the usual extent as he had no money to keep his internet on at home and no money to travel the four miles to the nearest library to access the internet. As he admitted that he was not able to fully look for work, the Jobcentre Plus officer applied another sanction to his benefits. He states he has not had any money for the past eight weeks. The man has had an application for a crisis loan refused because he was sanctioned. He is surviving on food parcels and has had to borrow money from his family to pay fuel bills. His daughter used to stay with him from time to time but this has had to stop as he cannot feed her or keep her warm. Case C—Sanctions/failure to allow for “good cause” (mental health) 48 year old male who sought advice from a Citizens Advice Bureau in South East Wales has been sanctioned for six months for failing to attend his Work Programme appointments. He was also refused hardship payments as he is not classified as being in a “vulnerable group”. He relies on his daughter to remind him of appointments and she has been trying to establish contact with him and has found this very difficult. This is why he failed to attend. Case D—Sanctions/failure to allow for “good cause” (mental health) 20 year old female who sought advice from a Citizens Advice Bureau in the South Wales, missed four appointments and the Jobcentre Plus office has now sanctioned her until January 2013. She suffers from periodic depression and memory problems and was previously on anti-depressants; she no longer takes them as she says she feels better without them. She does rely on her social services support worker to remind her of appointments but on this occasion they failed to support her. She could not apply for a crisis loan because she has been sanctioned and has no money whatsoever. She is also worried that she will lose her accommodation as a result of these sanctions. Case E—Sanctions/failure to allowt for “good cause” (mental health) 47 year old man who sought advice from a Citizens Advice Bureau in South West Wales, has been in receipt of JSA for the last two years. He suffers from anxiety and depression but has not visited the GP about this because he does not want to acknowledge it. He does not want to claim ESA because he wants to find work. His mental health problems have been particularly bad recently to the extent that he could not leave the house, and so he missed three Work Programme appointments. His JSA has now been stopped. He was not given any advice by the DWP on how he can appeal this decision, and so he missed the five day period in which to demonstrate “good cause”. He has no money and is currently living on food vouchers. Case F—Sanctions/failure to allow for “good cause” (learning disability) Claimant with learning disabilities was working under an ESF funded training programme and was then mandated into the Work Programme; he was forced to abandon the former course—even though he was doing well on the course as it was highly personalised. He was then sent to a Job Club where he was asked to complete a CV. When he explained he didn’t know what to do the adviser told him that he would have his benefits stopped. This young person is unable to read or write and was totally incapable of complying with the request. Case G—Sanctions/failure to allow for “good cause” (illness) 47 year old female who sought advice from a Citizens Advice Bureau in South Wales, did not attend a Work Programme appointment in Cardiff because she was ill. She was also concerned for her daughter and did not want her daughter going home to an empty house. Her ESA was stopped for this reason. She now has no money to pay for bills or to purchase food for herself or for her daughter. Case H—Sanctions/failure to allow for “good cause” (bereavement) Ongoing case where a man who recently sought advice from a Citizens Advice Bureau in South East Wales, failed to turn up for WP mandated training. The reason he failed to attend was that a member of his family had died. He was sanctioned. When the Training Company discovered the reason for the no show and contacted the Jobcentre Plus office with a request to withdraw the sanction, the Jobcentre Plus office still declined to withdraw the sanction even though it was clear that the claimant had “good cause”. Case I—Sanctions/debt and mental health deterioration A 22-year-old woman with mental health problems who sought advice from a CAB in Derbyshire in September 2012 had been sanctioned for six months in May, due to failures to attend Work Programme appointments. As a result, the client had no income and had been forced to move to live with her partner’s parents. She reported that she had now fully re-engaged with the Work Programme, and had tried repeatedly to contact Jobcentre Plus to try and get her JSA re-instated, to no avail. She was now heavily in debt and this was exacerbating her mental health problems. Case J—Sanctions/excessive demands/mental health problems A 31-year-old woman with severe, long-term mental health problems who sought advice from a CAB in Cambridgeshire was in receipt of ESA and had been placed in the WRA Group. She was determined to return to work, an ambition supported by her doctors, and had recently found herself a part-time job. However, her Work Programme provider was requiring her to actively seek work Welsh Affairs Committee: Evidence Ev 43
and attend training appointments. The client and her doctors were concerned that the combined level of work and Work Programme attendance was detrimental to her mental health, and that her (permitted) work should have priority.12
5. Work Programme Provider Guidance—An Opportunity Missed? 5.1 Official DWP guidance actually advises Work Programme providers (WPPs) not to ask claimants whether they have “good cause” prior to referring them for a sanction: “Do not ask the participant for a good cause reason to determine whether or not to raise a WP08. You have no option but to raise a doubt once the participant has failed to participate in a mandated activity, irrespective of whether or not they have offered an explanation afterwards. The LM DM will consider the reasons given and must make the good cause decision.”13 5.2 Although we understand that it may not be appropriate for WPPs to offer advice on definitions of “good cause”, we are concerned that an opportunity is wasted to provide information on claimants’ rights with regard to their opportunity to demonstrate “good cause”—particularly as the timescales for disputes on this basis are so narrow. Often, by the time a claimant seeks advice from an independent source (such as CAB) it may be well beyond the five day time limit for a “good cause” defence, even when it is clear that in many cases they can indeed demonstrate “good cause”.
6. Limited Financial Safeguards Once Sanctioned 6.1 Further, according to our evidence, claimants are almost always financially destitute after a sanction and have very few choices in terms of financial support. Once sanctioned, claimants will only have access to Crisis loan support if they are experiencing a “disaster”, defined as “a sudden calamitous event or great misfortune causing loss of, or damage to possessions or property”.14 Claimants under sanctions are in some cases also very fearful of losing their residential security and often get into debt with, for example, council tax or fuel arrears, priority debts. 6.2 The main government source of help in these circumstances is Hardship payments. Hardship is not clearly defined in the regulations. However, it is defined further in guidance as “severe suffering or privation”.15 Nevertheless, although clients do have access to hardship payments in theory, as we have seen in practice, unless claimants are deemed particularly “vulnerable”, they will not usually get hardship support and will be left to rely on charitable support instead—such as food vouchers. Further, most food parcel providers have a limit on how many parcels they can distribute to any one person within a given timeframe, so this support is very limited. For those that were already supplementing their housing benefit and rent out of their main JSA or ESA awards—the risks in terms of debt, homelessness and/or deterioration in physical and mental health clearly are very real.
7. Evidence: Community Mental Health Team (CMHT) in South Wales 7.1 We also have reports that a Community Mental Health Team has noted an increase in referrals for those needing mental health support due to Work Programme difficulties and stress. 7.2 Further, one Citizens Advice caseworker who runs a weekly drop-in service at the local CMHT has stated that around 50% of her clients are on ESA and of those around 50% are in the Work-Related Activity Group (WRAG). Some of those in the WRAG are eligible for Work Programme referrals and mandated activity (depending on their “conditionality grouping”).16 7.3 We have concerns that a significant proportion of those on ESA are in the WRAG even though they have a serious mental health disorder, such as bipolar disorder or schizophrenia and are at significant risk of self harm.
8. Conclusion 8.1 It is clear from the evidence that poor administration of sanctions is a main area of concern for bureaux across both Wales and England. Significantly, sanctions for failure to participate in mandated activities are not always applied appropriately as claimants are not always made aware of the need to show “good cause” within the relevant time scales—even when there is clearly a reasonable argument for a “good cause” defence against a sanction. According to our findings, the DWP are applying sanctions inflexibly and are often not taking into consideration mitigating circumstances, such as conflicting mandated appointments, bereavement, mental or physical ill-health. 12 For further details about the service user experiences on the Work Programme across the UK, please refer to the “Submission by Citizens Advice to the Work & Pensions Committee inquiry” (December 2012). 13 Work Programme Provider Guidance—Chapter 6—Raising a compliance doubt, p1 14 The Social Fund Guide (October 2012) 15 DMG (JSA) Ch 35, para 35155 16 It is also worth noting that new regulations came into force on 3 December 2012 (The Employment and Support Allowance (Sanctions) (Amendment) Regulations 2012) which include a revised, tougher sanctions regime for ESA claimants in the Work Related Activity Group. For details on applying these changes to ESA claimants already under a sanction, please refer to: Work Programme Provider Guidance, Chapter 7—From 3 December 2012—Re-compliance and Reviewing a Sanction Ev 44 Welsh Affairs Committee: Evidence
8.2 Moreover, we have presented evidence to suggest that there is also a causal link between the application of sanctions (often inappropriate) and deterioration in physical and mental health, even when (as is clear from a number of case studies) there are genuine efforts on the part of claimants to comply with directions and mandated activities. The DWP are in many cases applying inappropriate sanctions on the most vulnerable, such as those that suffer from mental ill health or learning disabilities. This group are also the least able to manage the conditionalities of the Work Programme (such as keeping appointments), or a crisis, without extensive support from family or statutory services. 8.3 The combined long term impact of sanctions, particularly those wrongly applied on the most vulnerable, has a detrimental effect on claimants’ abilities to cope with their own personal health and well being. As has been demonstrated, claimants are increasingly excluded and in need of crisis support—which is in any case very limited. This has a profoundly negative impact on our clients. Further, there is often a prolonged and unnecessary pressure on local services and charitable support. In short, the evidence suggests that some vulnerable claimants are not receiving the necessary level of personalised, specialist support that they really need in order to move into sustainable employment.
9. Recommendations 9.1 Improved administration to ensure that sanctions do not arise because of, for example, failure to record sickness or inability to attend where this has been notified. 9.2 Robust safeguards to protect claimants from inappropriate sanction must be put in place. When drawing up the claimant commitment and considering sanctions, guidance must ensure that Jobcentre Plus advisers consider: — whether there is any long-term health condition or impairment for which reasonable adjustments need to be made; — with clients permission a summary of claimants health record to be checked by Jobcentre Plus prior to claimant commitment being drawn up or sanctions being imposed (see further information under General welfare reform/health heading below); and — whether there is suitable childcare available for the claimant’s children. December 2012
Supplementary evidence from Citizens Advice Cymru (WPW 02B) Qq 34–36: Figures for the number of people that have come forward to CAC with complaints about sanctions on the Work Programme (Qq 34–36 for the oral evidence session Tuesday 19 March) I can confirm that the number of people coming to see Citizens Advice Cymru about sanctions in 2012–13 were 616. The breakdown is: — 521 clients with Jobseekers allowance—Sanctions and hardship payments. — 81 ESA—Sanction. — 18 Income support—Sanctions. June 2013
Written evidence from the Employment Related Services Association (ERSA) (WPW 05) 1. Introduction 1.1 The Employment Related Services Association (ERSA) is the trade body for all those delivering or with an interest in employment related services. ERSA represents 17 of the 18 prime contractors for the Work Programme covering over 95% of the market by contract value, alongside a large and growing number of subcontractors. We represent Working Links and Rehab Group, the prime contractors operating in Wales, as well as many of the subcontractors. ERSA’s membership spans the private, voluntary and public sectors and it is this diversity that gives ERSA the authority to speak on behalf of the entire welfare to work sector. This submission is based on qualitative and quantitative feedback from our membership. In addition, ERSA has also consulted the prime and subcontractors operating the Work Programme in CPA13 (Wales).
2. Executive Summary 2.1 ERSA’s Job Start data shows that as many as 10,000 Work Programme participants entered a job between June 2011 and September 2012 in Wales. Many of these will have entered a job between February 2012 and September 2012 and therefore are not detectable in official DWP figures. Welsh Affairs Committee: Evidence Ev 45
2.2 It is too early to tell how well the new payment model is working and whether adjustments need to be made. ERSA believes we need to review how effective the model is after individuals have been on the programme for at least two years. 2.3 The Work Programme operates under a tight financial model and it is important this is joined-up with other funding streams to ensure jobseekers are properly supported into sustained employment. 2.4 It is important for Work Programme provision to be aligned with the employment and skills initiatives offered by the Welsh Government. One specific area of concern is that participants cannot currently access ESF funded employment and skills support if they are not already in employment.
3. The Development of the Work Programme in Wales and its Payment by Results Model for Contractors 3.1 The Committee’s inquiry comes on the back of the publication of official government data on Job Outcomes for the Work Programme. It is important to stress that this provides only a limited snapshot of performance to date, focusing on one years’ worth of data for what is a two year programme. In addition, the data only focuses on Job Outcomes (jobs that in most cases have lasted for at least six months) and in effect only relate to jobseekers who entered employment during the Work Programme’s start-up phase (June 2011 to January 2012). The recession in Quarter four of 2011 is highly likely to have had an impact on Job Outcome performance. 3.2 In recognition of this issue, ERSA collected information on the number of Job Starts (those who have entered a job) in order to detect future Job Outcome performance. ERSA found that in Wales, of 50,000 referrals made between June 2011 and September 2012, around 10,000 had entered employment so far. This is broadly in line with the national average. 3.3 The best way of analysing performance is to look at the progression of monthly cohorts as it could be expected that more people will get into work the longer they have been on the programme. Looking at the June 2011 cohort (those who were referred to the Work Programme in June 2011), around 26% of the total number of people referred have started a job. There is a remaining eight months left on the programme for those who have not yet found employment. 3.4 ERSA’s data shows an increase in Job Starts up until autumn 2011 which then began to fall during the winter of 2011–12. This may have been because of seasonal fluctuations in the labour market although the recession will, in all likelihood, have also had an impact. There has since been a significant increase in the number of Job Starts since February 2012. In that month around 10,000 people were finding work nationally, which has increased month on month to over 20,000 by September 2012. 3.5 Of the 10,000 people who have found employment in Wales to date, ERSA would anticipate most of these would have happened between March and September 2012. Given the six-month time-lag between getting a job and being recorded in official DWP statistics ERSA would expect that many thousands more people will have found employment than are detectable in DWP’s official data. ERSA believes that we will see many of those spring 2012 Job Starts become Job Outcomes in the next tranche of officially published Government data, currently scheduled to be published in May 2013.
4. The Impact of the New Payment Model on Welfare to Work Contractors and Whether there is Effective Collaboration between Work Programme Providers 4.1 The Work Programme relies on a differential pricing model that incentivises providers to support all jobseekers, regardless of their distance from the labour market. Current trends indicate that the JSA payment groups are the most successful so far, particularly PG1 (JSA 18–24). However, it is proving far harder to get jobseekers referred via the ESA payment groups into work than anticipated. This is probably reflective of the wider challenges for people on ESA in the labour market and shows it is taking longer for providers to support them into sustained employment. However, it is too early to tell how well the new payment model is working and whether adjustments need to be made. ERSA believes we need to review how effective the model is after individuals have been on the programme for at least two years. 4.2 On effective collaboration between Work Programme providers, it is important to stress that the model is built on the basis of competition between prime providers. The policy intention is for competition to drive higher standards and for better performing providers to be rewarded with more referrals. This model has its disadvantages—particularly on issues such as larger employer engagement—but it is a central platform that underpins the way the Work Programme operates. In other CPAs ERSA is already witnessing some providers significantly out-perform others and it is right for jobseekers to be referred to the best performing provider.
5. Whether Jobseekers on the Scheme are able to Access the Full Range of Services they Require 5.1 To some extent this question will be reflected in future Work Programme statistics, which will show how many jobseekers have been successfully placed into work. Certainly Work Programme providers have more flexibility than they did on predecessor schemes to develop interventions that are responsive to an individual Ev 46 Welsh Affairs Committee: Evidence
jobseeker’s needs rather than prescribed by government. Given providers are only paid by results, providers are incentivised to ensure jobseekers get the right services they need to gain sustainable employment. 5.2 However, provision is to some extent restricted by the Work Programme’s tight financial model. Some jobseekers will need very expensive interventions eg drug and alcohol interventions and it is important that there is join-up with other services to ensure those jobseekers are properly supported. These would enable providers to develop truly innovative approaches to helping people into work.
6. Whether the Scheme is Embedded in Local Areas and Responsive to the needs of Different Communities 6.1 The Work Programme is a nationally procured scheme that has to be tailored at a local level to be successful. To do this, it is important that services delivered by local authorities complement rather than compete with those delivered by the Work Programme. There have been difficulties for Work Programme providers in ensuring effective collaboration to date. For example, it was only in the summer of 2012 that providers were given permission by the DWP to share performance data with local authorities in their CPAs. However, local authorities play a central role in supporting people in their area into work and it is crucial they are involved in helping participants on the Work Programme into sustained employment. 6.2 It is also important for Work Programme provision to be aligned with the employment and skills initiatives offered by the Welsh Government. One specific area of concern is that participants cannot currently access ESF funded employment and skills support if they are not already in employment. To ensure a joined- up approach ERSA believes that eligibility criteria should be extended to participants on the Work Programme. December 2012
Written evidence from Rehab JobFit (WPW 06) Executive Summary — The Work Programme is now well embedded in local communities in Wales and is operating well for its customers. Delivery is as local as possible to ensure maximum benefit is delivered to each customer to meet their needs. Initial teething problems have been overcome and providers are continuously striving to improve their offering based on lessons learned. — In Wales, local economic conditions are impacting on the long-term employment opportunities available to Work Programme customers. Innovation on the part of Work Programme providers is key to delivering positive outcomes. — Collaboration between providers is growing and will continue to develop with the Programme to ensure an enhanced experience for customers. — The interpretation of the “black box” in Wales is impacting negatively on the training and support opportunities available to Work Programme customers with all Work Programme participants ineligible for programmes with an ESF element of funding. This issue will be of particular interest to the Welsh Affairs Committee. — Job creation is key to the success of the Work Programme and WP providers work proactively with local employers to develop job opportunities. — Some challenges exist in relation to referrals from ESA-customers but work is ongoing to alleviate any concerns that the supply chain may have in relation to capacity to support this more challenging customer group.
1. Introduction 1.1 Rehab JobFit welcomes this opportunity to contribute to the Welsh Affairs Committee’s inquiry into the Work Programme in Wales. 1.2 Rehab JobFit is a third sector-led partnership of the Rehab Group and Interserve which delivers training, support and employability services across the UK. The partnership is unique because of the distinctive strengths and experience of both organisations. Rehab Group’s extensive experience in supporting a wide range of customers to realise their full potential enables the achievement of a real step change in people’s lives to deliver a better future. Interserve, as one of the UK’s largest employers, brings the security and stability of a large corporate organisation as well as extensive supply-chain management expertise. Rehab JobFit delivers the Government’s Work Programme and Mandatory Work Activity Programme in Wales and South West England. Rehab JobFit is one of two providers operating in CPA 13. Through its supply chain, Rehab JobFit has worked with over 27,000 customers in Wales since June 2011. We are now supporting vast numbers of customers into work. 1.3 Rehab JobFit employs a model of service provision which embraces a broad and diverse supply chain which includes more than 50% third sector and public sector delivery partners. This enables small, local providers to play their role in the Work Programme. Furthermore, all service provision is carried out by supply chain providers, including subsidiaries of both shareholders, Rehab and Interserve, and, therefore, their success Welsh Affairs Committee: Evidence Ev 47
is essential to Rehab JobFit’s overall performance. Rehab JobFit focuses on ensuring a framework exists to ensure the success of supply chain partners. 1.4 This response to the Committee’s inquiry has been developed in consultation with our supply chain partners and considers the themes raised in the Committee’s invitation for submissions.
2. Theme: The Development of the Work Programme in Wales and its Payment-by Results Model for Contractors 2.1 The Work Programme has now been in operation in Wales for nearly 18 months and is operating effectively. The programme allows providers the flexibility to design their services to meet the needs of the customers they serve in the geographic areas where they are working. As a five year programme, the Work Programme offers a long-term payment-by-results model which is now well embedded in the communities in which it operates. 2.2 At first, both prime providers and subcontractors acted cautiously within the transformed marketplace as they worked to ensure their delivery of the new programme provided for the needs of their customers. From the outset, customer volumes in the main customer groups were high and providers worked hard to ensure they could deliver the early demands of the programme. Providers continuously strive to improve their offering based on lessons learned. 2.3 The payments-by-results model has been a learning process for all providers. Whilst the initial attachment fees alleviated some of the cash flow impact of the payment-by-results funding model, moving to a new system of payment has been challenging for some supply chain partners; however, these issues are improving as the programme becomes more embedded. Confidence is growing and at this point in the programme all stakeholders fully understand their role in supporting customers into and in work and how the commercial drivers work within the contract. 2.4 The payments-by-results model has also required providers to innovate effectively to enable them to support customers into sustainable employment in a very difficult economic environment. This is particularly the case in Wales where limited job opportunities, poor transport links and the low level of educational attainment of many people seeking employment, impacts significantly on some customers’ ability to achieve long-term sustainable employment outcomes. 2.5 A shortage of permanent employment opportunities is also impacting on the ability of customers to achieve longer term sustainable employment. Now that the Work Programme is embedded in local communities, providers are experiencing a rise in job entries but job sustainability outcomes continue to be poor because of a shortage of long-term employment opportunities. Outside of larger conurbations, such as Cardiff, there are far fewer temporary jobs available, as well as pressure for permanent jobs, and this increases challenges for providers. 2.6 The differential pricing model has been positive and has motivated providers to spread their attention across the full profile of referrals including ensuring a focus on customers who are harder to help. However, some issues have arisen in relation to the Minimum Performance Level targets in the context of an economy which has not grown as expected. 2.7 The Department for Work and Pensions (DWP) has included Minimum Performance Levels in its contract with providers but only makes reference to three different customer profiles. These are Payment Group 1 (Jobseekers Allowance (JSA) claimants aged 18 to 24), Payment Group 2 (JSA claimants aged 25 and over) and Payment Group 6 (ESA (IR) WRAG with three Month Prognosis). This influences how people’s needs and abilities are measured and ranked and is therefore the focus for the provider. 2.8 The referrals mix has not matched the projected levels and there has been a significantly higher level of PG3 referrals than expected but this customer grouping does not count towards minimum performance levels. From a provider’s point of view, it’s about getting the right job for a customer to ensure they sustain it but by only counting PG1, PG2 and PG6 as minimum performance levels, they are not recognising the needs of one third of our case load (those who not in PG1, PG2 and PG6). 2.9 One of our supply chain partners suggested a more simplified fee structure. This could include just two payment types, Jobseekers Allowance (JSA) and Employment and Support Allowance (ESA), which would allow providers to get the right job for the right person and not have to focus more on customer groups that are counted in the performance indicators.
3. Theme: Collaboration between Work Programme Providers 3.1 The Prime Contractor model has many positive benefits for subcontractors. It allows smaller providers to participate and gives scope for capacity building for smaller, local providers. A good, effective prime provider can help subcontractors to learn from each other and can also give subcontractors access to programmes which are tried and tested for the benefit of the customer. In the case of Rehab JobFit, each subcontractor is assigned to a specific JCP area which enables subcontracts to collaborate, share best practice and discuss issues which arise without the pressure of competition. Ev 48 Welsh Affairs Committee: Evidence
3.2 There is even greater scope for collaboration, particularly in relation to challenging areas of the Programme such as job sustainment. Providers who are achieving high levels of job sustainment in one CPA could usefully share their recipe for success with other providers working with similar populations in another CPA. It is expected that opportunities for further collaboration will be explored and developed now that the programme is well established.
4. Theme: Whether Jobseekers on the Scheme are able to Access the Full Range of Services they Require 4.1 The black box model has a positive impact on the customer experience because providers have the freedom to use their experience and skills to ensure positive customer outcomes and to ensure that jobseekers on the scheme are able to access the full range of services they require to achieve long-term, sustainable employment outcomes. 4.2 However, a specific issue does exist in Wales in relation to the interpretation of the “black box” and the opportunities available to WP participants which may be of particular interest to the Committee. The Welsh Government’s Welsh European Funding Office has determined that the definition of black box is anything that an unemployed person needs to get work within the Work Programme and consequently will not allow a customer on the Work Programme to access other programmes funded by, for example, ESF. 4.3 In practice, this means that all ESF-funded Programmes in Wales are not available to Work Programme customers. This impacts on the opportunities available to customers as many Welsh programmes receive ESF funding. This is not the case in England, where customers are able to access Skills Funding Agency (SFA) programmes, many of which have an element of ESF funding. In England, WP and SFA providers collaborate effectively to ensure the customers receive a full programme of training and development to prepare them for the employment available in the areas where they live. 4.4 This has impacted significantly on the resources available to Welsh WP providers. They have not been able to fully exploit the black box approach and therefore all training costs have to be borne by the providers. 4.5 It has also impacted on the ability of providers to support customers with many and complex needs such as people with mental health difficulties, drug and alcohol misuse problems, agoraphobia, etc. These customers need in-depth interventions that require specialist intervention. Under previous Welfare to Work contracts, providers worked alongside agencies that specialised in supporting customers to overcome these high dependency barriers. The barrier to the ESF-funded programmes means that people who are highly disadvantaged are not in a position to seek specialised help from providers already operating in their communities. 4.6 Here are some examples, provided by Rehab JobFit supply chain subcontractors working on Work Programme delivery in Wales, about how this has impacted on people’s outcomes: 4.6.1 A Work Programme customer applied for a job online as part of his job search activity, only to be informed that he was not eligible as Jobs Growth Wales is ESF-funded. The customer met all criteria for the position advertised. 4.6.2 A gentleman was working with this organisation to overcome his barriers which were literacy, numeracy and self-confidence. The customer had a history of mental illness, he had been with this organisation for a few months and there were definite improvements to his life. The customer was informed that he would be required to join the Work Programme and as a consequence this meant that he would have to leave the programme he was in because it was ESF-funded. We were approached by the customer’s mother who pleaded with us to let him stay where he was as she could already see the decline in his overall wellbeing. Unfortunately this was not possible; however, we did arrange a 1–1 meeting with MIND to try and source a voluntary placement. 4.6.3 One customer thought he had a job. He then came into the office to say he wasn’t eligible to start at the garage that day due to it being under the Jobs Growth Wales funding and he was on Work Programme. 4.6.4 Another customer was referred to Kaleidoscope by JCP to complete Track Safety Licence but came onto Work Programme before he got his appointment with them. Due to being on the Work Programme, he was told that he was no longer eligible even though he was referred previously. 4.6.5 Three customers with learning disabilities who were in receipt of Disability Living Allowance needed a Job coach which could have been sought from Quest previously, but this isn’t accessible for customers on the Work Programme. 4.6.6 A customer was referred to the Work Programme although he had already advised JCP that he had a Jobs Growth Wales opportunity, he was referred to us anyway and after 6 months of issues and complaints to deal with he has finally been taken off Work Programme and has now taken up the Jobs Growth Wales opportunity. 4.7 A perception of double funding’ issues have also impacted in other ways. For example, a large employer in Swansea has had a huge recruitment drive from September onwards. The local bus service does not supply Welsh Affairs Committee: Evidence Ev 49
public transport to allow people travel to and from this location. JobCentre Plus can supply a bus service to and from the location but Work Programme customers are not permitted to use it. Therefore, the providers have to provide their own transport to this employer.
5. Theme: Whether the Scheme is Embedded in Local Areas 5.1 Rehab JobFit and its supply chain have worked to ensure they are embedded in local communities, working closely with a range of stakeholders including the Welsh Government’s Communities First and local groups as well as the Local Authorities Economic Development Departments. Delivery is as local as possible to allow maximum benefit to be delivered to each customer to meet their needs. 5.2 It is essential that the Work Programme provides for the specific needs of the people accessing it and the area where it is being delivered. Wales experiences some specific issues in relation to employment. With an unemployment rate that is higher than the UK average, many customers coming to the Work Programme are third generation unemployed. This means that many have little or no experience of work either personally or within their families. It is difficult to change the mind set of individuals who have lived their whole lives on benefits. The flexibility that Work Programme providers have in delivering the programme means that they can provide the specific and necessary interventions to help these people to overcome their individual barriers to employment. Access to ESF-funded programmes would further enhance this ability. 5.3 Clearly, job creation is key to improving employment opportunities in areas where the economy is particularly depressed. If the economy in a particular CPA is impacting on the number of jobs available and, therefore, on the Work Programme’s performance, it is essential that the Work Programme is accompanied by strong job creation initiatives. 5.4 Providers work actively with local employers to build employment opportunities for WP participants. The Work Programme can effectively operate as a free recruitment service for employers but at this stage employers aren’t always aware of the Work Programme. To overcome this, local providers work to raise awareness of the benefits of the Programme and also invest considerable time and resources in matching and preparing individuals so that employees match the requirements of the employer. 5.5 It is essential that the methods of performance measurement recognise regional differences which arise as a result of different economic conditions. It may be more appropriate to measure each provider within their CPA rather than comparing them to the full group of 18, for example, comparing providers within Wales or within the South West. Comparing the performance of London, which in effect has its own strongly performing micro economy with other regions where the economy is not as strong, eg the North of England, Wales or Scotland, does not give a clear and fair comparison.
6. Theme: Responsiveness to the needs of Different Communities 6.1 The Work Programme in Wales is currently providing for the needs of a wide range of customers from different communities. The flexibility of the Work Programme enables providers to use all available resources to deliver positive outcomes for even the hardest to reach customers. However, there are some changes which could further enhance the ability of Work Programme providers to provide for the needs of customers with more complex requirements. 6.2 Currently, the Minimum Performance Level funding model does not necessarily reflect the needs of all customers. While there is a clear focus on people who are deemed to be harder to help, the price is based on the benefits classification of the unemployed person rather than on his/her individual and personalised needs. For example, JSA Early Access Customers, a group of claimants who often face many and complex barriers to workforce participation, attract the lowest fee because of their benefits classification. This is despite the fact that they are among the customers with the highest support needs. It may be more appropriate to establish a more needs-based, individualised funding model which recognises the person’s specific employment support needs. 6.3 During our consultation to develop this submission, our supply chain partners reported receiving some referrals of people who may not be appropriate customers for the programme. Customers referred to the programme be in the category of being able to undertake a Work Related Activity Group for up to 12 months; however, providers have had customers referred to them with terminal illnesses. The Work Programme provider does not play a role in assessing the person’s fitness for work but customers who are very distant from the workforce are referred to the programme and are included in targets. It may be more appropriate to support these customers in an alternative programme and specific consideration should be given this ensuring this group receive the support they require. 6.4 In general, engaging and motivating ESA customers can be a challenge. Providers have reported reluctance on the part of some ESA customers who had previously been in receipt of Incapacity Benefit (ex- IB) and who have undergone assessment and been referred to the Work Programme, even though they still face considerable barriers to work. 6.5 However, there is considerable scope to develop the Work Programme’s ability to provide for the needs of people with the most complex requirements. Subcontractors, particularly, third sector organisations, have Ev 50 Welsh Affairs Committee: Evidence
real potential to develop their capacity to deal with more complex needs, thereby utilising the expertise built up by charity organisations through the social entrepreneurship they so typically demonstrate. As the programme develops, this capacity will grow to ensure the Work Programme can provide for all customers living in local communities. December 2012
Written evidence from the Department of Work and Pensions (WPW 07) 1. Introduction 1.1 The Work Programme was launched on 10 June 2011 and is in place nationally. This is the biggest single payment by results employment programme Britain has ever seen, providing personalised support to an expected 3.3 million claimants over the life of the contract. 1.2 The Work Programme has replaced much of the complex range of employment support previously on offer including the New Deals, Employment Zones and Pathways to Work.These programmes were overly prescriptive and failed to achieve enough job outcomes for the long-term unemployed and deliver good value for money for the taxpayer. 1.3 Work Programme providers are free to design support based on individual and local need. They will be paid primarily for supporting claimants into employment and helping them stay there for longer than ever before, with higher payments for supporting the hardest to help. For the first time providers will be paid partly out of the benefit savings they help to realise when they support claimants into sustained employment, tying what the Department pays them, to what they are being paid for. 1.4 The innovative features of the Work programme include: — Payment by results—Payment largely by results for the first time. — Long-term focus—once a claimant is referred to a Work Programme prime provider, they remain with that provider for two years. — Differential pricing—payments up to £14,000 for getting those with the biggest barriers to employment into sustained work. — Processes are not prescribed—providers are given the freedom to innovate and use what works best. — Competition in live running—there are at least two providers in each contract package area, and providers that are more successful will have more claimants referred to them. — Innovative funding—the Work Programme has an innovative funding arrangement, in which the programme can be partially paid for through the benefit savings it realises. 1.5 The Work Programme is better designed than our previous employment programmes, and is supporting more people than any previous programme. It is too soon to judge performance on job outcomes alone—we have just over one year’s data for a programme that is designed to support people for two years or more. 1.6 Data published by the Department and by the welfare to work industry shows that the Work Programme is helping people off benefit and into employment, and that job entries are increasing. Job outcomes have been building up more slowly than our early assumptions indicated, but the job entry and off benefit data clearly indicate that there is higher performance to come. 1.7 We are also starting to see differences emerge between providers. We are managing all our providers robustly to improve performance, and we are taking decisive action with those who are not delivering the Work Programme to the standards we expect. We have issued formal contract letters to several of our providers. (A full summary of the evidence to date can be seen in section 6.) 1.8 We are also taking steps to make the programme better, by improving access to skills provisions, and spreading best practice for supporting harder to help claimants. 1.9 Where possible, the evidence provided by the Department seeks to address the individual lines of enquiry that the Welsh Affairs Committee are particularly interested in, but with the major caveat that it is too early to judge the overall performance of the Programme or to answer detailed questions about its operation. This memorandum covers each point of interest in turn.
2. Work Programme Development and Payment by Results [NB—the Committee is interested in the development of the Work Programme in Wales and its payment by results model for contractors.] 2.1 In procuring the Work Programme the Department took steps to attract bids from a wide range of organisations from the public, private and voluntary sectors including several with experience of delivering employment programmes in comparable labour markets abroad. Similarly, the Department encouraged Welsh Affairs Committee: Evidence Ev 51
successful bidders to engage as wide a range of subcontractors as possible in order to ensure provision meets the varied needs of individuals and the local labour market. 2.2 This approach led to a rich mix of prime providers and subcontractors and a wide range of delivery models. The Prime Providers awarded contracts covering Wales are Working Links and Rehab Group, who between them employ 73 subcontractors including 48% from the voluntary and community sectors. Others will judge the extent to which their delivery models are innovative—the Department’s primary concern is that the programme should support as many people as possible into sustained employment. To that end no delivery model should be regarded as fixed. Indeed, providers are actively encouraged to adapt their delivery models in the light of lessons learned from experience and as circumstances in the economy change. 2.3 Providers must seek the Department’s approval for any significant changes to delivery models. However, as the onus is on providers to use initiative and innovation to deliver the best performance, the Department would normally agree changes that didn’t impact minimum service standards and that didn’t breach fundamental principles, for example that the service should be free to participants. 2.4 Data published by ERSA, the trade body for the welfare to work industry, suggests that the Work Programme is achieving the lowest cost-per-job versus any comparable programme in the last 20 years. As set out by ERSA, the relative cost per job of the Work Programme is £2,097 compared to a £7,495 cost per job for Flexible New Deal. 2.5 This shows that the design of the programme is working. Providers are being paid for the results they achieve rather than the processes they deliver. This is a huge step forward for the taxpayer. ERSA also report that prime providers alone have so far invested £600 million of their own funds into the Work Programme. 2.6 At this stage, we cannot publish a formal comparison between the results of the Work Programme and the Flexible New Deal, or any other previous employment programme. However, the Department has commissioned a consortium led by the Institute for Employment Studies (IES) to undertake a full evaluation of the Work Programme. This will include a full impact assessment.
3. Payment Model Impact & Provider Collaboration [NB—the Committee is interested in the impact of the new payment model on Providers and whether there is effective collaboration between Providers.] 3.1 The job outcome statistics published on 27 November show differences between the main payment groups, with those on Jobseeker’s Allowance more likely to achieve job outcomes than those on Employment and Support Allowance. There are several possible factors or combinations of factors that could explain these differences, including the comparative difficulty of helping people with very significant barriers to employment particularly in difficult labour market conditions. It is too early to judge the success of the payment model. The differential payment model was designed to offer very real incentives to support the harder to help groups, with providers able to earn up to £13,600 for getting Employment and Support Allowance recipients into sustained work compared to £3,800 for a young jobseeker. In particular, the payment model ensures that providers can only make a reasonable return on their investment if they genuinely help all their participants; so the likelihood of “creaming and parking” is reduced. 3.2 The Work Programme also introduces competition in live running—there are at least 2 providers in each contract package area, and in future, providers that are more successful in getting participants into sustained employment will have more claimants referred to them, whilst the other Provider(s) in the Contract Package Area (CPA) will receive fewer. By rewarding successful Providers with a greater share of referrals in this way the aim is to drive up performance within each CPA. 3.3 To further ensure that providers are delivering at least the minimum standard of service they promise for each participant, the Department conducts a monthly review of a sample of claimants from each contract, requiring providers to rectify any shortcomings identified. 3.4 The report on the first phase of qualitative evaluation of the Work Programme published on 27 November noted some evidence that participants with the most severe barriers to employment were seen less frequently. However the report pointed out that less frequent contact is not necessarily indicative of lower quality or less appropriate support, and that this was an issue that requires further monitoring during evaluation. The report also noted that specialist provision for those with particular barriers was considered to be functioning effectively. 3.5 In terms of general collaboration between Providers, the Department has set up a Partnership Forum bringing together providers at senior management level and DWP officials to share experiences of service delivery, and to consider emerging policy that may impact on delivery. It provides an opportunity to identify and address a wide range of strategic issues and consideration of potential interdependencies between the Work Programme and other aspects of Welfare Reform. 3.6 We are also taking steps to make the programme better, by spreading best practice for supporting harder to help claimants. Ev 52 Welsh Affairs Committee: Evidence
3.7 Both Work Programme Providers in Wales are also members of the Joint Employment Delivery Board. The joint board was set up to enable the Welsh Government and DWP in Wales to better understand issues that affect the provision of skills delivery and employment, promoting closer working and opportunities for collaboration. The Work Programme Providers joined the board to add their views to discussions. More recently the board has focused on the planned welfare reforms and at the last meeting it was agreed to establish a sub group at a more operational level to continue this aspect of the boards work.
4. The Level of Service [NB—the Committee is interested in whether jobseekers on the scheme are able to access the full range of services they require.] 4.1 Unlike previous programmes, the Work Programme does not have prescriptive elements where providers are paid for delivering centrally designed processes. So, the Department has required all providers to set out their minimum service delivery standards so that each participant knows what to expect, without prescribing the standards themselves. To do so would have missed the point that service delivery needs to be as flexible as possible to meet the needs of individuals and to fit with each provider’s delivery model. 4.2 The Department requires all providers to operate an open and accessible complaints process that participants can use if they feel they are not receiving the promised standard of service or if they have concerns about any other aspect of the support they are receiving. The Department believes that it is right to expect providers to seek to remedy complaints so that they can get their relationship with participants on to the right, positive footing. However, if complaints are not resolved to a participant’s satisfaction they can be escalated to the Independent Case Examiner who has powers to charge providers up to £5,000 towards the cost of the ICE investigation if they are found to be at fault. Up to the end of October 2012 ICE had received a total of 209 complaints of which 165 have been cleared. Of the cleared complaints 153 failed the gateway process for reasons such as the complaint had not been through the provider complaints process. The seven cases resulting in an ICE report have not been upheld. These figures are for the UK; we do not have separate figures for Wales.
5. Community Focus [NB—the Committee is interested in whether the scheme is embedded in local areas and responsive to the needs of different communities.] 5.1 DWP is committed to working closely with the Welsh Assembly Government to ensure the Work Programme and other key employment policies are delivered satisfactorily. DWP engage with the Devolved Administrations to ensure they are aware of new policy initiatives, particularly those that will impact on them. This engagement provides the Devolved Administrations with the opportunity to have an input early on in the policy making process. There are a number of mechanisms in place for DWP to engage regularly with the Devolved Administrations, such as monthly keep in touch meetings as well as strategic high level meetings. 5.2 On performance, the job outcome statistics published on 27 November showed some variation between contract package areas, and some variation between providers within contract package areas. However this picture is volatile, making it particularly difficult at this very early stage to ascribe variation to different labour market conditions or provider performance.
6. Summary of Evidence to Date 6.1 The Department is committed to transparency, and is publishing validated information on referrals, attachments, job outcomes and sustainments in line with the rules on Official Statistics. The latest referral and attachment statistics were published on 7 November 2012, with the first job outcome and sustainment statistics following on 27 November. Alongside each set of statistics the Department makes available a tabulation tool enabling users to display the results by payment group, provider, contract, contract package area, local authority, parliamentary constituency and Jobcentre Plus district. Work Programme official statistics are available on the Department’s website via: http://research.dwp.gov.uk/asd/index.php?page=wp 6.2 A cautionary note applies to the early published statistics. The latest figures for referrals and attachments published on 7 November 2012 showed that 837,000 people had joined the Programme by 31 July, with 43,000 of these in Wales. However the large majority of the people who had joined the Programme during that period had been with their provider for less than one year and, as providers are able to claim an outcome for up to two and a half years after a person joins, it is too soon to judge the performance of the programme. In particular, it is too soon to judge performance by job outcomes alone. The Work Programme only rewards providers when participants stay in work and off benefit for a sustained period—six months for most; three months for the harder to help—so a substantial proportion (nearly quarter of a million) of participants, even if they are in work, have not been on the programme long enough to appear in the official job outcome statistics. For these reasons the Department is also looking at evidence from benefit records and from providers’ records of job starts to judge performance in the pipeline. 6.3 These records show that participants are moving off benefit and into work. For example, 56% of the people who joined the programme when it started in June 2011 have had a break in their claim. Unvalidated data supplied by ERSA shows providers had recorded 200,000 job starts to the end of September, with Welsh Affairs Committee: Evidence Ev 53
proportionate numbers in Wales. There is every expectation that this evidence that participants are leaving benefit and starting work will translate into increased job outcome performance. ERSA data can be seen at: http://www.ersa.org.uk/hub/details/723 6.4 The Department has also commissioned an independent evaluation of the Work Programme led by the Institute for Employment Studies (The Work Programme—Learning from the Past ). The first phase of the evaluation was designed to identify early lessons from the first phase of programme delivery. The report on this phase of the evaluation was published as Research Report 821 on the Department’s website on 27 November (Research Reports 1990–2011). It should be noted that the report explicitly states that “…the nature of the research and the fact that it is based on early experiences of the programme mean that it should not be used to draw conclusions about the overall effectiveness of the Work Programme. This will require longer term analysis…”. 6.5 Two further evaluation reports will follow this year, one focussing on commissioning (to be published in Feb) and another incorporating findings from a national participant survey and wave 2 of the qualitative participant study (to be published this summer). January 2013
Written evidence from Remploy Employment Services (WPW 08) 1. Introduction 1.1 Remploy Employment Services is one of the UK’s largest providers of specialist employment support for people with disabilities, health conditions and complex barriers to work. Our mission is to transform lives through providing sustainable employment opportunities. We operate a national network of more than 60 town and city centre recruitment branches and offices providing specialist recruitment and development services to job seekers. 1.2 We deliver a number of major Government welfare to work programmes. We are the largest provider of the Department of Work and Pensions’ Work Choice programme, and operate as a Work Programme subcontractor in a number of CPAs in England, Scotland and Wales. In the last two years we have found around 35,000 jobs in mainstream employment for people across the UK with a range of physical, sensory and mental disabilities and other disadvantages. 1.3 In Wales, Remploy Employment Services operates a network of 15 branches and offices in Cardiff, Newport, Swansea, Bridgend, Neath, Port Talbot, Merthyr Tydfil and, Caerphilly, and towns across Powys, Monmouthshire, Blaenau Gwent and Rhondda Cynon Taff. We have supported over 4,000 people into work in the last two years. 1.4 Since June 2011, Remploy has been a Work Programme subcontractor to Working Links in Neath, Port Talbot, and the entire county of Powys, with Monmouthshire added in July 2012.
2. Executive Summary 2.1 Remploy supports the principle of payment by results, and a differential payments model that encourages providers to work with candidates requiring more intensive support. 2.2 We believe that altering eligibility criteria to allow Work Programme to access ESF employment and skills funding would have a positive impact on collaboration with smaller community organisations. 2.3 Delivering the Work Programme in rural areas such as Powys and Monmouthshire requires an innovative delivery model that is aligned to the requirements of local job seekers and businesses.
3. The Development of the Work Programme in Wales and its Payment by Results Model for Contractors 3.1 Wales provides a number of challenges when delivering a major employment programme, due to its geography, large rural population and, in some areas, high levels of long-term unemployment. This range of factors makes it important that Work Programme delivery is tailored to the needs of local communities. 3.2 According to ONS data from December 2012, levels of economic activity and employment in Wales remain lower than the UK average, while the unemployment rate is marginally higher. 3.3 Remploy supported the creation of the Work Programme, and believes in the principle of a payment by results model and a truly “black box” approach to delivery that encourages innovation and focuses on the needs of the individual rather than being prescriptive. 3.4 We believe that the Work Programme has the capacity to meet the needs of all eight candidate groups. However, it is important that this is closely monitored to ensure that all candidate groups especially those furthest from employment and in the ESA group, are being offered effective interventions and further support is added when required. Ev 54 Welsh Affairs Committee: Evidence
4. The Impact of the New Payment Model on Welfare to Work Contractors and Whether there is Effective Collaboration between Work Programme Providers 4.1 Remploy strongly supports a differential payment model that encourages providers to work with candidates who require additional, intensive support to help them move into sustainable employment. It is vital that both prime and sub-contractors have the funding and flexibility required to offer innovative provision that that addresses candidates’ specific needs. 4.2 Many Work Programme candidates, especially from the ESA cohort or from areas with high levels of intergenerational unemployment, are likely to require considerable support over a significant period of time before entering employment, as well as intensive in-work support. The Work Programme is a two-year programme with an emphasis on sustained employment, so the effectiveness of the Work Programme cannot be fully assessed at this early stage. 4.3 The Department of Work and Pensions has worked effectively with providers to address issues with referrals from the ESA cohort onto the Work Programme, and as further performance data is released the payment model should be kept under close review. The pricing model should not lead to more challenging customer groups being overlooked.
5. Whether Jobseekers on the Scheme are able to Access the Full Range of Service they Require 5.1 The personalised, “black box” approach to Work Programme delivery is designed to increase flexibility and allow providers to innovate to help the maximum number of long term unemployed into work. 5.2 As an organisation that specialises in supporting people with disabilities and health conditions, we are able to utilise our internal expertise, including our Disability Support Employment Advisors and learning disability experts, who can provide more intensive support to candidates. Remploy also works with local partners, including the NHS Expert Patient Programme, to signpost candidates to any additional interventions that may be required. 5.3 Many community-based and small scale employment and skills organisations receive substantial ESF funding, and under current rules Work Programme candidates who are not in employment are ineligible for this funding. We believe that relaxing the eligibility rules would encourage greater collaboration and support more people into work.
6. Whether the Scheme is Embedded in Local Areas and Responsive to the needs of Different Communities 6.1 Remploy understands the importance of tailoring delivery of the Work Programme to the needs of the communities we serve, and the need to be responsive to local labour market trends. 6.2 Our engagement with employers in different areas of Wales reflects the structure of the local economy. Remploy has established effective partnership agreements with some of Wales’ largest employers, including Sainsbury’s, ASDA and BT, but in parts of Powys and Monmouthshire our focus has been on communicating with SMEs and understanding their HR requirements. 6.3 Delivering the Work Programme in large rural areas can present a number of challenges. For example, in the north west of Powys, the largest population centre, Machynlleth, has a population of only 2,100 people. In addition to operating town centre offices, Remploy also embeds staff in council libraries, use a mobile unit to travel to smaller communities, and utilise social media to communicate with more isolated Work Programme candidates in a format many find accessible. 6.4. It is important that Work Programme providers, at all levels of the supply chain, work more effectively with local authorities to align themselves to local employment strategies and avoid unnecessary duplication of services. In Wales, a strong relationship between Work Programme providers and the Welsh Government is also invaluable. January 2013
Written evidence from Working Links Wales (WPW 09) 1. Introduction 1.1 Working Links Wales is the largest single provider of employment related services in Wales and one of two prime providers of Work Programme in Wales. Working Links delivers the Work Programme alongside Rehab JobFit in Contract Package Area 13, which covers all regions of Wales. 1.2 Working Links is a UK wide public-private-voluntary company with shareholders who endorse our social purpose and are interested in how Working Links can create long-term value, investing in the quality of services and the communities where we operate. Welsh Affairs Committee: Evidence Ev 55
1.3 Working Links has a strong track record in Wales, working with unemployed people since 2000. Ahead of the award of the Work Programme contract for CPA 13, Working Links invested significant time and effort while investing in research and development based in part on 450,000 legacy customer records. Since 2000 we have helped more than a quarter of a million people into work, 30,000 of whom are from Wales. Since going live with the Work Programme contract in June 2011, we have expanded our base to meet the increased demand and we now have 20 offices across Wales. 1.4 The employment circumstances may be challenging but they are not insurmountable. There are many facets to this challenge and we recognise that the requirement for joined-up policy, higher levels of employer engagement and entrenched problems of worklessness, all require a sophisticated and proactive response.
2. Executive Summary 2.1 The Work Programme signifies an ambitious step change in the way employment schemes have operated in the past, replacing a multiplicity of programmes that have gone before it. The Work Programme faces particular challenges in Wales—in part because of historically higher levels of unemployment as a result of the decline in traditional industries such as coal and steel; and in part because of the geographical disparities between the country’s urban, rural and valleys regions. 2.2 Working Links considers the Work Programme an evolution of former programmes, combining these into one payment-by-results programme of a far larger scale. Work Programme providers are, therefore, working with a broader range of customers, many of whom who have complex needs and have been disengaged from the labour market for many years. We strongly believe that the Work Programme payment-by-results model will offer increased value to the taxpayer over the life of the contract. 2.3 There is good collaboration between Work Programme providers and best practice discussions are facilitated through the industry trade body, the Employment and Related Services Association (ERSA). However, it is our view that skills and employment programme structures remain institutionally divided and that more could be done to promote better alignment of those programmes. 2.4 We are supportive of efforts by ERSA to relax current restrictions on the release of performance data, allowing the industry to be more transparent.
3. The Work Programme in Wales 3.1 Working Links was awarded the contract in April 2011 and the programme became operational in June 2011. Overall, the Work Programme is the biggest single payment-by-results employment programme ever introduced. 3.2 It has been anticipated that the Work Programme will support 3.3 million people into work over the lifetime of the programme. Jobcentre Plus (JCP) is expected to help 90% of unemployed people move off benefits within twelve months. Work Programme is designed to help the 10% who, having been supported by JCP, are then referred on to us for additional support. 3.3 According to ERSA, the Work Programme’s performance level has been affected by lower than predicted growth and its impact on the labour market. In Wales the economic circumstances have proved exceptionally challenging—unemployment in Wales before the start of Work Programme (February 2011) stood at 8.4% compared to a UK average of 7.9%. ONS figures for December 2012 show that this disparity remains: the UK unemployment rate has fallen to 7.8% for the UK compared to 8.1% for Wales. 3.4 In Wales we believe we are achieving good results, recognising the different economic and geographical challenges presented by the country’s urban, rural and valleys structures.
4. The Payment by Results Model 4.1 The aim of the Work Programme is to help people off benefits and into sustainable employment. Working Links recognises that the introduction of payment-by-results on the scale of the Work Programme is challenging. Our experience is that it is an evolution of previous schemes, such as Flexible New Deal and Employment Zone, and adopts many of the same principles in supporting people to work. Work Programme is on a significantly larger scale, encompassing eight payment groups which cover jobseekers on different benefits including Jobseeker’s Allowance (JSA) and Employment Support Allowance (ESA). Work Programme providers are, therefore, working with a broader range of customers, many of whom have complex needs and have been disengaged from the labour market for many years. 4.2 Prime providers receive payments for customers who are referred to them and attached to the programme—an attachment fee. We then only receive payments for customers we have helped into work and who have subsequently remained in work for over 13 or 26 weeks, depending on the category of customer (In Wales there are eight payment groups). We believe that the actual value to the taxpayer can only be accurately assessed over the life of the programme, but we are confident that the focus on sustained job outcomes will mean better value for money for the taxpayer. Ev 56 Welsh Affairs Committee: Evidence
5. Effective Collaboration between Work Programme Providers 5.1 We are working with the Welsh Government as a key member of the Joint Employment Delivery Board to ensure better alignment of Work Programme with Welsh Government employment and skills initiatives. The current position is that whilst people eligible for Work Programme can access skills training once they are in employment, they are not eligible for European Social Funds (ESF) employment and skills support, pre- employment. 5.2 We believe that the new round of ESF can be better aligned to support value added activity to the core Work Programme provision. Working Links will be responding to the consultation on the new ESF round in early 2013 where we will provide evidence of where we believe improvements can be made in this area to make effective use of overall funding and achieve better outcomes through a more joined-up approach. Working Links supports relaxing the eligibility rules for ESF funding and will continue to advocate this through the Joint Employment Delivery Board.
6. Meeting the needs of Jobseekers 6.1 The Department for Work and Pensions encouraged providers to arrive at their own delivery model, set within a common framework, but with the flexibility to develop their own “black box” approach. Our model has been developed through learning gained from 11 years of delivery in the Welfare to Work sector. We were able to bring together best practice (from delivery of more than 100 contracts) into a “model office” environment, where we trialled diverse delivery methods to arrive at a consistent approach which is tried and tested, but also allows for locally tailored solutions pertinent to the geographic, economic and customer demographics specific to each delivery area. 6.2 Structurally, our model is consistent internally but may well differ from other providers delivering Work Programme, as they have developed their own “black box” principles. In the 18 months that Work Programme has been operating, we have developed our approach to ever changing circumstances. 6.3 In Wales, we recognised early that our approach would need to be based on a detailed understanding of labour market and specific employer requirements. We commission localised Welsh research to shape our approach to this, and are always aware of and responsive to trend changes in the labour market. 6.4 Our approach to developing customer skills is properly cogniscent of the needs of the local labour market and the employer organisations operating within it. Since Work Programme went live, we have engaged with more than 1,000 employers across Wales and developed innovative recruitment solutions to support and match their requirements to the skills and aspirations of our customers. We have for example, developed a suite of sector specific employability courses that are delivered internally and through a network of supply chain partners. These sector and employer specific courses are supported by personalised one to one interventions, built around the needs of the labour market, which enhances core employability skills such as confidence, motivation, and interview skills.
7. The Supply Chain 7.1 The development of a robust supply chain network for the delivery of Work Programme across Wales is critical to our success in ensuring we have the right specialist provision to support our customers. We recognised early we needed to play a pivotal role in developing capacity, capability and diversity amongst our partner network. For example, we were able to develop a number of payment models for our Tier Two (end to end providers) providers from the Public Sector, such as offering interim job outcome payments, where we receive no income as the prime provider. This reduces the financial risk for these partners and allows for greater certainty when undertaking financial planning. 7.2 For our Tier Three and Four providers (specialist and spot purchase partners) we have tailored payment models including an enhanced payment by results model. As a result our current Work Programme supply chain covers a diverse network of public, private and voluntary delivery partners, including CAB (debt, legal and housings advice), Salus (health-related supported) and Gingerbread (lone parents support). Currently, over 40% of our supply chain partners are from the voluntary sector and overall we have engaged with more than 50 national and local providers. Our approach to the commissioning and delivery of services has been recently assessed against the DWP’s mandatory “Merlin Standard”, where we were successful in gaining a grade of 2 (Good.)
8. Work Programme Data 8.1 Our contract with the Department for Work and Pensions limits the extent to which we are allowed to disclose data on Work Programme performance. We share ERSA’s view that the data release on 27 November 2012 constitutes a limited snapshot of the Work Programme in its first year. These initial set of results do not reflect the reality of the programme. Our figures show that, of those who entered the programme in June 2011 (the June cohort), 27% have entered work, and of those in work, 57% have achieved a job outcome (ie sustained work for at least three or sixth months depending on the benefit they were entitled to). Working Links has also compared job entry rates in the June 2011 cohort and the June 2012 cohort—we are pleased that job entry rates are 15% higher in 2012. Welsh Affairs Committee: Evidence Ev 57
8.2 Our internal data suggests that Working Links is performing very well in rates of sustained employment beyond the 13 and 26 week points at which we receive payments for a job outcome. Prime providers receive additional payments which diminish over time for every month in which a customer remains in a job beyond a job outcome. Although this data is at an early stage—as it can only apply to customers who have already had a job outcome—we believe it indicates that our tailored approach is not only helping people into work but into sustainable work. 8.3 Despite the challenges which are set out above and the particular economic circumstances we face, we strongly believe that the Work Programme, with its emphasis on sustainable job outcomes, represents the right approach to tackling long-term unemployment in Wales. January 2013
Written evidence from Tydfil Training Consortium Ltd (WPW 15) 1.0 Introduction 1.1 Tydfil Training is a third sector organisation, working in South Wales since 1990. The company is divided between the delivery of the Welsh Government Work Based Learning contract and the DWP Work Programme where we are a sub-contractor to Rehab Jobfit.
2.0 Executive Summary 2.1 As a provider that has been involved in Welfare to Work since 1997, we have seen many changes, culminating in the Work Programme and the challenges that it brings. 2.2 We are positive and welcome the focus on sustainability but feel that given the barriers confronting our customers, that access to European Funded programmes would enhance performance to a level achieved in other areas, where such exclusions do not apply. 2.3 We have, to the best of our ability, fostered a collaborative approach to delivery, be it from within the Work Programme family or from external relationships. Local Authorities have been a significant source of support and co-ordination for our organisation and the programme, but with greater flexibility could play an even greater part.
3.0 Payment by Results (PBR) Model 3.1 The PBR model is challenging, particularly given the current economic climate and the vulnerable state of the job market in the Heads of the Valleys area. This is compounded by the increasingly competitive environment confronting Jobseekers, particularly with recently unemployed individuals applying for similar vacancies to Work Programme customers. 3.2 Key Influencing factors regarding the PBR model include: — Cash flow forecasting implications for providers, particularly in the early stages of the programme and the effect this has on financial viability. — The increased requirement for providers to manage and mitigate risk against the needs of customers. — An analysis need to be done as to the effects of the removal of attachment fees in April 2014 and whether job outcomes and sustainability payments will bridge this gap. — Increased requirement for validation of job outcome claims.
4.0 Collaboration between Providers 4.1 The challenging nature of PBR requires us, as a delivery organisation, to develop innovative and cost effective solutions. These are more readily achieved by working collaboratively with other sub-contractors than to pursue a purely individual approach. To this end we participate in Supply Chain Liaison meetings at a district wide level and less formal local liaison with providers facing a similar demographic. 4.2 Positive enhancements can be gained by developing collaborative partnerships with other bodies outside of WP delivery within the local area. This potentially brings a degree of additionality to the programme to support the customer journey, although these relationships are restricted by the difficulty relating to WP customers not having access to European funded provision.
5.0 Jobseekers Ability to Access a Range of Services 5.1 We have developed a service delivery model that has a range of provision that meets the employability needs of the majority of our customers. This level of support, particularly for customers with specialist requirements, has been developed in conjunction with our Prime Contractor (Rehab Jobfit) and via local partnerships. Ev 58 Welsh Affairs Committee: Evidence
5.2 For example, we have recently developed a bespoke package for customers with disabilities, utilising specialist organisations and funded via our Primes “Specialist Fund”, for which we are encouraged to put forward new and innovative proposals. 5.3 Part of the issue regarding this point is how we as a provider ensure that we provide a full enough provision whilst managing the risk associated with a PBR model.
6.0 How the Work Programme is Embedded in the Local Area 6.1 We work closely with our Local Authority to ensure that our Work Programme activities are, as far as possible, included in the overall strategic plan for the area. It is increasingly difficult for us to work closely with many partners due to the restrictions of European Funding, which is frustrating for us and our customers, who may have been engaged on a programme prior to referral to the Work Programme and subsequently been required to finish before completion. 6.2 Tydfil Training liaises with many organisations to identify elements of local provision that are not deemed to be double funding in order to provide additionality to our customers. Where we have achieved this, the results are encouraging and give us the confidence that if greater access was achieved the results would follow. May 2013
Written evidence from the Welsh Government (WPW 17) Thank you for your letter dated 17 June in which you raised two specific questions in relation to European Social Fund (ESF) provision and Jobs Growth Wales, an ESF funded project. I am responding as, following recent changes to Ministerial responsibilities, my portfolio includes welfare reform and the Welsh Government’s relationship with DWP and their programmes, which include the Work Programme in Wales. After careful consideration of the issues from a Welsh Government perspective. I am now able to provide written evidence as set out in Annex 1 to this letter. This evidence provides a response to your letter of 17 June, including the relationship between Jobs Growth Wales as an ESF funded project in Wales and the Work Programme. I welcome the opportunity to respond to any enquiries you may have on this information. Jeff Cuthbert AM, Minister for Communities and Tackling Poverty
Annex 1 1. Summary 1.1. The Welsh Government is the devolved Government for Wales. Headed by the First Minister for Wales, its devolved responsibilities include areas such as health, education, language and culture, and public services in Wales. Welfare benefits remain reserved to the UK Government. 1.2. Whilst employment is not a devolved responsibility in Wales, the Welsh Government is responsible for skills policy in Wales and provides a range of support, including pre-employment assistance, for individuals seeking employment. This is delivered through a number of projects across Wales that draw on European structural funds such as the European Social Fund (ESF). 1.3. The Work Programme, introduced by DWP, now supports the majority of welfare claimants in their search for work, with mandatory participation for certain claimant groups. There are still challenges to be addressed but we acknowledge that the Work Programme is still in its early stage and that work is ongoing to identify and meet these challenges. Meanwhile, we believe that it is important that there is ongoing communication between Government departments in identifying and sharing the appropriate information to determine the impacts of the Work Programme. We also believe that statistical evidence is essential in monitoring the Programme’s implementation progress. 1.4. Details of the difference in job outcomes for men and women need to be explored to ensure equality in accessing employment opportunities. This could help to ensure that welfare reforms deliver the right labour market incentives. Issues such as childcare, transport, skills and training needs, and flexible working arrangements are areas that we believe should be researched further to provide essential context for the statistical evidence. 1.5. This will help identifying in more detail where barriers to employment need to be addressed and target them accordingly. In addition, we believe that the alignment between Welsh Government and European Structural funded support and that provided by DWP through its programmes including the Work Programme is key. Welsh Affairs Committee: Evidence Ev 59
1.6. In also looking to overcome barriers to employment, especially for young people, the Job Growth Wales programme provides unemployed young people aged 16–24 with a job opportunity for a six month period paid at national minimum wage. The programme caters for young people that are job ready but have had difficulty securing employment. The ambition for the programme is that young people enter sustained employment at the end of the 6 months job opportunity. Commencing in April 2012 it will create 12,000 jobs over 3 years for job ready young people throughout Wales. In the first year 4,022 young people entered a Jobs Growth Wales job opportunity. Of those who completed the 6 months programme 79% entered sustained employment. 1.7. We understand from the tender documents that the Work Programme supports participants for two years. During this time, providers receive an attachment fee at the point of referral, and job outcome payments when a participant has been in work for at least 13 weeks (or 26 weeks for some payment groups) and will receive subsequent payments for every four week period the participant spends in employment during the two-year period of participation.
2. Statistical Evidence 2.1. The total number of job outcomes paid to providers in Wales from 1 June 2011 to end of March 2013 is 5,790. Of these 96% were for participants in a JSA payment group, with JSA early entrants having the highest number of job outcomes within this payment group (2,370) 2.2. London had the largest proportion of job outcomes paid to providers amongst the 11 GB countries/ English regions (15.1%), followed by the North West (13.5%). Wales had the smallest proportion (4.4%), behind the South West (4.9%). 2.3. Of the 22 local authorities in Wales, Cardiff had the highest proportion of job outcomes paid to providers (12.0%), followed by Rhondda Cynon Taf (8.8%) and Caerphilly (7.6%). Ceredigion and Monmouthshire had the smallest proportions (1.2% and 1.9% respectively). 2.4. Of the total job outcomes paid to providers in Wales to the end of March 2013, 2,950 job outcomes were contracts to Working Links and 2,820 to Rehab Jobfit. 2.5. Of the total job outcomes paid to providers in Wales to the end of March 2013, 71% were male. This was the highest proportion amongst the 11 GB countries/English regions, with London having the lowest proportion (61%). 2.6. The number of sustainment payments paid from 1 June 2011 to end of March 2013 in Wales was 26,440, and these were paid for 4,880 participants. 2.7. In Wales there were 3,510 referrals to the Work Programme in June 2011, of which 5.7% resulted in a job outcome within a year. This was the second lowest of the GB countries and regions (GB overall 8.5%). Of the 3,120 referrals in March 2012 in Wales, 10.9% resulted in a job outcome within a year, the lowest of the GB countries and regions (GB overall 13.4%).. 2.8. There were 63,330 referrals and 61,180 attachments to the work programme in Wales between 1 June 2011 and end of March 2013. Of the 11 GB countries/English regions, Wales had the lowest proportion of referrals and attachments (both 5.3%). London had the highest proportion of referrals and attachments (15.0% for referrals and 14.9% for attachments), followed by the North West (both 13.3%).
3. Research 3.1. Statistics on the Work Programme currently provide a limited insight into its performance, and we appreciate that it will take some time to develop and expand this aspect. We would suggest that statistics may be expanded to include monitoring by cohort (ie all Work Programme referrals during a particular month) as well as payment group. It would also be helpful to include some more statistical context, such as the proportion of referrals in relation to welfare customers and overall working-age population in specific contract areas or at least on a regional basis (ie Wales). 3.2. Alongside this statistical data, Welsh Government would benefit from better understanding of the type of delivery undertaken during the Work Programme as part of its ‘black box’ approach. It would also be useful to understand the specific needs presented by Work Programme participants, the necessary investment to meet those needs and where gaps may be occurring. 3.3. The Welsh Government has commissioned a three-stage programme of research to assess the impacts of the UK Government’s welfare reforms in Wales. This research provides an insight into some aspects of the interactions of welfare reform and labour market incentives, especially Stage 2. Stage 3 will look further into the impacts; this may include an assessment of the Work Programme in Wales.
4. Overcoming Barriers 4.1. The Work Programme in Wales launched in June 2011 with two contractors appointed to deliver across all areas of Wales; Working Links and Rehab/Jobfit. Standard mandatory eligibility for unemployed people is at 9 months for those aged 18–24 years, and 12 months for those aged 25 years and over. Early entry to the programme can apply for people facing significant barriers in returning to work. Ev 60 Welsh Affairs Committee: Evidence
4.2. The Work Programme has been developed to tackle the barriers individuals face in securing and retaining employment, and this includes skills. The Welsh Government related support for tackling barriers to employment has been designed as a pre-Work Programme intervention, focused on customers prior to their becoming eligible for the Work Programme. 4.3. WEFO has to demonstrate added value for ESF investments and this includes satisfying the European Commission that ESF funding does not duplicate or substitute for the Member State’s own programmes. Due to the ‘black box’ nature of the Work Programme contracts, it has been concluded that it would not be possible to show added value for any ESF employment project support to individuals on the Work Programme. 4.4. This still leaves a range of other out-of-work groups who are eligible for help from the ESF funded employment projects. These include JSA and ESA claimants prior to going on the Work Programme; people claiming other benefits such as Income Support; people who are out of work but not claiming benefits and 16–17 year olds most of whom cannot claim benefits. 4.5. The aim of all employment advice and support should be to help people find the quickest route into employment. We believe that our approach of complementary support does this. It also provides a clear alignment of services and focuses on Welsh Government employment related support on those who are not eligible for support through the Work Programme. This helps to maximise public funding in Wales and indeed UK Government funding by avoiding duplication. In providing accurate front-line advice and signposting, DWP will also ensure people eligible for Welsh Government funded provision will be directed accordingly. 4.6. The Welsh Government continues to work closely with DWP through the Joint Employment Delivery Board (JEDB). Both Work Programme prime contractors in Wales also attend these meetings.
5. European Social Fund and the Work Programme 5.1. A particular requirement around ESF funding is the need to satisfy the European Commission that ESF investment is providing added value. Since the launch of the Work Programme, the basic approach adopted has been that the ESF-funded employment projects cater for people out of work who are not receiving help from the Work Programme. This includes JSA and ESA claimants prior to their trigger points; people claiming other benefits such as Income Support; people who are out of work but not claiming benefits and 16–17 year olds, most of whom can not claim benefits. 5.2. Due to the ‘black box’ nature of the Work Programme contracts, we are not able to compare directly the support which the ESF projects provide to their participants against the services being delivered by the Work Programme providers. However, we would expect that many of the intervention styles are similar. This means it would be difficult to show ‘added value’ if Work Programme customers especially prior to starting employment were also participating in the ESF-funded projects offering pre-employment support. 5.3. In Wales, ESF funded employment projects typically use an approach based on personal advice, help with job-search and access to work focussed activities. Skills training may also be available, although the extent of this varies between projects and is generally integrated with other support. To avoid duplication and to maximise public funding, the projects are not designed to provide skills training to people who are eligible for other welfare-to-work programmes or projects. Our aim has been to complement but not replace or compete with such programmes, especially where they are not devolved. 5.4. Further to this, ESF Programmes in Wales have also supported a further suite of 36 projects which provide skills training to people in employment. Almost £330m of EU funds have been committed to these projects. Work Programme customers who have started a job are allowed to access training from these projects on the same basis as other workers. 5.5. The 2007–2013 European Social Fund (ESF) programmes in Wales have funded 32 projects to help unemployed and economically inactive people to find work. The total EU funding committed to these projects is over £300m. These projects are run by Welsh Government departments, UK Government agencies, local authorities, other public bodies and the third sector. The Programmes are now fully committed financially. 5.6. Over 210,000 participants have been supported to date through the ESF-funded employment projects, and almost 48,000 have already entered employment. Over 100,000 of these participants have been recorded since 2011 when the Work Programme began. A recent ESF Leavers survey indicates that almost 50% if previously unemployed people and 30% of previously economically inactive people were in employment within 12 months of completing an ESF intervention. 5.7. The Welsh Government is currently reviewing the implications of European funding post 2014. This includes ESF-supported employment and skills activity, with a view to implementing new delivery arrangements from 2014. As developments around the new model are progressing, three key priorities are emerging: — The need for a more simplified and streamlined model of delivery that responds to the specific needs of individuals and businesses seeking support; — Articulation of a ‘footprint’ for delivery that takes into account of national, regional and local priorities; and Welsh Affairs Committee: Evidence Ev 61
— A more integrated assessment and referral service for businesses and individuals wising to access support for their skills needs, where possible through a single access point.
Jobs Growth Wales
5.8. This is one of range of ESF-supported projects. It has been designed to add value to mainstream employment programmes by providing support for young people who are not eligible for other provision; thus, it caters for young people that are job ready but have had difficulty securing employment and are not eligible for the Work Programme. Jobs Growth Wales provides unemployed young people aged 16–24, with a job opportunity for a six month period paid at national minimum wage. Participants will be paid at or above the national minimum wage for a minimum of 25 hours per week. It is essential that unemployed young people, if not eligible for the Work Programme, are signposted correctly. In instances where young people are eligible for the Work Programme, they become ineligible for Jobs Growth Wales.
5.9. The eligibility criteria for the Work Programme and Jobs Growth Wales differ. Jobs Growth Wales has been designed to complement but not to replace or supplement the Work Programme. Young people are eligible for Jobs Growth Wals from day one of unemployment up until they are eligible for the Work Programme (usually nine months for a young person and therefore referrals from the Work Programme into Jobs Growth Wales are not appropriate.
Comparison with ESF arrangements in England
5.10. The ESF programmes in Wales and England are structured differently, in that the English programmes are delivered through co-financing organisations (CFOs) which procure delivery across a number of activity areas, whilst the Welsh programmes are structured around separate projects led by single sponsors or groups of joint sponsors. There are also some differences in the types of activities funded, reflecting the fact that there are separate programmes agreed with the European Commission for each country.
5.11. The DWP is the main CFO on England for employment activities. DWP has focused its ESF funding since 2011 on support for families with multiple problems, day one support for young people aged 18–24 and voluntary access to the Work Programme for Income Support and Incapacity Benefit claimants. These strands complement the Work Programme in England, and we understand that participants cannot normally access DWP ESF support at the same time as being on the Work Programme. In Wales, ESF projects cater for a different range of target groups but also complement the Work Programme.
5.12. The Skills Funding Agency—also a CFO in England—focuses its ESF support on seven main areas, which include skills support for redundancy and skills support for the unemployed. Skills support for redundancy broadly corresponds to the ReAct ESF projects in Wales. There is no current ESF project in Wales which directly corresponds to the ESF provisions delivering skills support for the unemployed in England.
6. Recommendations
6.1. To summarise, the Welsh Government recommends the following: — That contractual information be shared in strict confidence on a government-to-government basis with the Welsh Government so that it can be considered in the context of current of other skills and employment provision in Wales. — That those welfare customers eligible for other programmes in Wales, prior to becoming eligible for the Work Programme, continue to receive the appropriate advice by DWP. — Continue the information sharing and monitoring of statistical evidence between the Welsh Government and DWP, and consider expanding the statistics captured and available; also consider how the performance is monitored (eg on cohort-basis in addition to, payment group). — To develop statistical evidence showing the range of support provided to customer groups by Work Programme providers, to more fully reflect their efforts to help Work Programme participants. — To improve information on why there is a higher proportion of job outcomes for men than for women in Wales, including further evidence to ascertain the issues which may affect women and men differently in the context of the Work Programme. August 2013 Ev 62 Welsh Affairs Committee: Evidence
Supplementary evidence from Remploy Employments Services (WPW 08A). 1. The Work Programme’s differentiated pricing structure was designed to incentivise providers to support those furthest from the labour market. The categories are based largely on the type of benefit jobseekers are claiming. Is there a better way to differentiate the payments, for instance by taking into account individual disability, homelessness and serious drug and alcohol problems? Remploy supports the principle of differential pricing as part of the Work Programme, allowing providers to provide more intensive, personalised support for individuals with greater barriers to work. By effectively profiling candidates and understanding how their disability influences their ability to gain and sustain employment, providers will be able to personalise their provision as required. Given the tight financial model that Work Programme providers must work within, committing a substantial level of resource to individuals furthest from employment can come with heightened financial risk. While differential pricing addresses this to some extent, future programme design could look at a greater upfront payment to cover some of the costs associated with the tailored candidate development journey. In addition, the inability to access European Social Fund funding, as discussed at length the oral evidence session, can limit the additional specialist support available to candidates, placing an increased pressure on the resources of Work Programme providers.
2. Helping those furthest from the labour market has been a challenge for successive government employment programmes. Is the Work Programme any better or worse in this respect? The Work Programme is a two year programme, and so data on its long-term effect on the labour market cannot be accurately measured at this stage. However, there are a number of positive aspects to the programme, in particular that it gives providers up to two years to support candidates into employment. This is particularly beneficial for disabled jobseekers, who may require more personalised support, and consistency. The black box approach also allows greater innovation and flexibility. As mentioned in our reply to the previous question, the payment by results model adopted by the Work Programme does impose a greater risk on providers, who may be unable to invest resources in those with additional barriers to work.
3. We have heard criticism that some individuals are being encouraged to take up employment that does not match their skills, despite training being available in their chosen field. What is your response? It would be short sighted of a Work Programme provider to place a candidate into an ill-suited role. Given that the Work Programme’s funding model is based on sustained job outcomes, it isn’t in the interest of a provider to place a candidate into a vacancy with an employer that is not well suited to their skills and is likely to result in them dropping out of work. Providers will only receive a full payment after two years of sustained work, making profiling, accurate job matching and in-work support particularly important as part of the Work Programme.
4. Do you accept the criticism that the payment-by-results model pushes providers and subcontractors to place people into inappropriate employment? This is covered in previous answers, but Remploy has not experienced pressure to place candidates into inappropriate employment. It is, however, worth noting that allowing jobseekers to experience different employment opportunities in a range of sectors, through structured, short term work trials and work experience placements, can be of huge value to an individual. This is particular pertinent to individuals who have little work experience to display to potential employers.
5. You each deliver other UK Government or Welsh Government employment programmes, beyond the Work Programme. Do you feel that employers understand the difference between the various schemes at the Welsh and UK level? In our experience, employers have little interest about which of a myriad of pan-UK and devolved employment programmes a candidate has joined their organisation from. Employers are more concerned about whether an individual leaving an employment programme, including the Work Programme, is fully prepared for employment, has the skills to carry out their job role, and whether adequate in-work support is in place for both the individual and the employer. Employers are also frustrated at being approached by a large number of employment service providers operating on a range of programmes, offering candidates for what may be a small number of vacancies. Some employers have adopted a single provider to act as a ‘single point of contact’ and serve as a broker for providers Welsh Affairs Committee: Evidence Ev 63
locally. We encourage employment providers to adopt innovative approaches to build strong relationships with employers, suited to their requirements.
6. We have heard that employers are offering more temporary and short-term contracts than had been expected, so few people remain in their first job for 13 or 26 weeks. Has this been borne out by your experience and, if so, what impact is it having on your operations? Work Programme providers have to work within the local labour market they operate in, and in many cases employers are seeking greater flexibility in their employment practices, including short-term, temporary and zero-hour contacts. Remploy has adapted to this by building close and long-lasting relationships with a wide range of strategic employer partners, allowing us to understand their resourcing needs and to offer well-suited candidates for a range of roles, with the appropriate level of in-work support. Work Programme providers also understand that, if an individual has been placed in a temporary job, for example over the Christmas period in a retail role, provision must be put in place following this to build upon their new skills and find a more sustainable role. August 2013
Supplementary Evidence from Tydfil Training Consortium Ltd (WPW 15A) Q1. The Work Programme’s differentiated pricing structure was designed to incentivise providers to support those furthest from the labour market. The categories are based largely on the type of benefit jobseekers are claiming. Is there a better way to differentiate the payments, for instance by taking into account individual disability, homelessness and serious drug and alcohol problems? Given the current pricing structure and the subsequent challenges that it poses, particularly with the current economic climate, any form of premium allocated to specifically disadvantaged groups would help improve the service given to customers and hence overall performance. In many instances, we are seeing that customers present themselves with multiple barriers, over and above the difficulties associated with being long term unemployed, which necessitate a multi-agency approach, which also impacted by the current funding model. To broaden this approach of analysing differential pricing, there is also the question of applying a “Deprivation Index” based on an areas economic indicators. This could reward a provider with a greater percentage of the benefit savings (paid via Job Outcomes and Sustainability) for achieving outcomes in locations typified by higher levels of unemployment and other socio-economic indicators.
Q2. Helping those furthest from the labour market has been a challenge for successive government employment programmes. Is the Work Programme any better or worse in this respect? Evaluating the performance of the Work Programme against previous projects is difficult as the measure for success in the WP is so different. Also, prior initiatives did not have to contend with the extreme economic climate we are confronted with today. Given that, in relation to how we support those furthest from the Labour Market, we have developed more innovative partnerships to address needs that ever before. Rather than “better” or “worse”, I would say that the WP is different in this respect, where we are now more inclined to work collaboratively to address issues than previously. One major issue remains though in relation to how we are able to deal with the hardest to help, that being access to European Funded provision. This access would enable us to build stronger collaborations locally, ensuring a more robust customer journey is available where necessary.
Q3. We have heard criticism that some individuals are being encouraged to take up employment that does not match their skills, despite training being available in their chosen field. What is your response? Please see response to Q4.
Q4. Do you accept the criticism that the payment-by-results model pushes providers and subcontractors to place people into inappropriate employment? Given that providers are funded on the basis of sustainability rather than job entry, to pursue such a policy as this would be ultimately counter productive for all parties. As a provider, we need to foster an excellent relationship between ourselves and local employers, a large proportion of whom are SME’s. If we placed unsuitable candidates with inappropriate levels of training with our employers, it would not take long before the relationship deteriorated beyond repair. Therefore, although this scenario is one that we have heard of, it is not a long term strategy that we would engage in as we feel it does not provide the level of sustainability required under this funding model. We do encourage our customers to explore offers that may be outside of their “comfort zone” or in areas that they Ev 64 Welsh Affairs Committee: Evidence
have not worked in before if we believe that they have the transferable skills to make such an application viable or if their initial ambitions are unrealistic.
Q5. You each deliver other UK Government or Welsh Government employment programmes, beyond the Work Programme. Do you feel that employers understand the difference between the various schemes at the Welsh and UK level? I do believe that there is a significant level of confusion amongst employers as to the vast array of programmes on offer. Feedback from employers has illustrated that they are confronted by a near constant stream of providers looking for placements, employment, apprenticeship or other opportunities. We believe that there is definitely a need for a more co-ordinated approach to employer engagement to ensure that opportunities are identified supported and delivered in an appropriate way with the appropriate level of contact.
Q6. We have heard that employers are offering more temporary and short-term contracts than had been expected, so few people remain in their first job for 13 or 26 weeks. Has this been borne out by your experience and, if so, what impact is it having on your operations? We have observed over the last few years that it has become more difficult to identify full-time, permanent contracts for customers, with many more opportunities being temporary or agency based employment. This is not to say that these opportunities are inappropriate for our clients, quite the opposite, but it does impact in the way that we manage expectations for our participants. To a far greater degree, we now try to promote continuity of employment with potentially many employers over a period rather than a single company. This does impact upon our staffing and resource allocation as we need to provide on going “in-work-support” interventions over a greater period of time. Additionally, we try to provide appropriate support and sign-posting for employers who may be fearful of recruiting directly because of employment law perceptions. Overall, we will provide on-going support for customers, both pre and post employment to sustain their jobs as best we can. This approach is labour intensive and expensive to do well, a cost that has to be borne from the overall budget, which would include investment in pre-employment training where identified. If access was available to support mechanisms from European funded sources, this would allow us to increase the level if in-work-support, over longer periods, resulting in the potential for greater benefit savings to the country July 2013
Supplementary evidence from the Department for Work and Pensions (WPW 07a) ESF in Wales The Welsh European Funding Office (WEFO) is part of the Welsh Government and manages the delivery of the EU Structural programmes in Wales. WEFO’s equivalent body in England is the European Social Fund Divisions (ESFD), part of DWP.
UK European Programme Rules National Rules on the eligibility of expenditure and the precise nature and focus of European Programmes are drawn up individually at the level of England, Scotland, Wales and Northern Ireland. A natural consequence of this is the possibility rules will be drawn up differently in each part of the UK, the individual country specific rules (all legitimate) are one of the factors in explaining why a national programme such as the Work Programme is viewed and treated differently across GB.
ESF Delivery The nature of devolved responsibilities and legislative authority means the delivery of ESF varies between the different countries: England—In England heavy reliance is placed on Co-Financing arrangement, in it broadest terms this means responsibility for delivering against a specific range of priorities set by ESFD is given to a limited number of individual bodies. An example of this would be the Skills Funding Agency (SFA) which utilises ESF alongside its core funding to deliver skills for those out of work. A similar example is found in DWP (separate from ESFD) where we deliver the Troubled Families Programme. Wales—unlike England Wales has not adopted Co-Financing arrangements, preferring to concentrate instead on individual projects which are directly controlled and managed by WEFO working to policy directives laid out by the Welsh Government.
Why are the ESF rules in Wales different to England? Because the rules are drawn up at a country rather than UK level under the legislative authority given to devolved administrations, as agreed with the European Commission. Welsh Affairs Committee: Evidence Ev 65
Surely the rules on added value, substitution and additionality apply equally in all parts of the UK. This being the case why does England and Wales take different approaches in respect of the Work Programme? Substitution and additionality are standard principles that govern any ESF programme, however the approach to these differ according to the rules laid out in each country. In England the ESF approach is a little more tolerant, but could differ according to the programme and the approach taken by the individual Co-Financing Organisation. In general the key requirement is to avoid duplication and demonstrate added value. In short risk mitigation. Wales takes a very different approach, risks/concerns about added value, substitution and additionality addressed through a clear line that participants in the Work Programme cannot access ESF funded provision at the same time. In short risk avoidance. October 2013
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