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Jobseeker’s Allowance (Work for your Benefit Pilot Scheme) Regulations 2010

Volume 718: debated on Tuesday 30 March 2010

Motion to Approve

Moved By

To move that the draft order laid before the House on 24 February be approved.

Relevant Documents: 9th Report from the Joint Committee on Statutory Instruments

My Lords, these regulations were laid in draft before the House on 24 February and debated in the other place on 23 March. I am satisfied that their provisions are fully compatible with our obligations under the European Convention on Human Rights. They lay out a legal framework for a Work for your Benefit pilot scheme in four Jobcentre Plus districts, which will constitute a six-month programme of externally provided work experience and employment support for those jobseeker’s allowance customers who are not successful in finding a job during the Flexible New Deal stage.

The draft regulations state when a person must take part in the Work for your Benefit scheme and set out the sanctions regime which will apply should they fail to do so without good cause. They also contain a number of safeguards to protect our most vulnerable customers, while at the same time ensuring a continuation of the job search activity that is central to the jobseeker’s agreement.

I know that noble Lords will be familiar with the scheme from our debates during the passage of the last Welfare Reform Bill, which received Royal Assent last November. Nevertheless, I will remind noble Lords of the details of the Work for your Benefit scheme, before outlining the specific provisions of the draft regulations which we are here to debate. At the heart of Work for your Benefit is the idea that the best way we can help the long-term unemployed is by keeping them as close to the labour market as possible. To this end, the scheme provides a programme of work experience and employment support for those JSA customers who face particularly challenging barriers to returning to work. It will serve as an additional layer of support beyond the Flexible New Deal stage.

The scheme will see external providers sourcing work experience programmes for jobseekers as a way of helping them to gain or regain the skills, routine and mindset required for their move into sustainable work. The nature of the work experience on offer will vary widely according to the needs of participants, but it will mean a working week of 30 hours for most people, as well as up to 10 hours of externally provided employment support. Any easements and flexibilities limiting availability for work within a customer’s jobseeker’s agreement will apply to the placements, so those available only for part-time work will have that commitment honoured.

The placements, however, are not jobs. They will exist over and above the staffing requirements of organisations. Safeguards will be in place to ensure that current or future jobs are not threatened, while organisations providing the placements will be required to sign declarations stating that this is the case. We envisage around 5,000 customers participating in the pilot scheme, who will normally be referred to the Work for your Benefit scheme after two years of unemployment. There will, however, be scope for up to 250 people to be referred to the scheme at an earlier point in their claim, should their adviser deem it beneficial.

Lone parents will not be subject to early referral, given their parenting responsibilities. Eligible lone parents will, however, be required to take part in the scheme if they reach the end of Flexible New Deal without finding sustained employment. We do not believe that it can ever be acceptable to write a person off as unemployable. We should continue to offer support, regardless of how long a person has been out of work, so we will expect lone parents to engage with the support on offer once their children become older. The requirement to participate in Work for your Benefit will only apply to lone parents claiming jobseeker’s allowance—that is, lone parents with older children.

All the flexibilities we have put in place for lone parents within the jobseeking regime will of course continue to apply in Work for your Benefit. For example, lone parents may only be required to participate in term time. We have also recently introduced a new right for lone parents with a child of 12 and under, restricting their availability for work to their child’s normal school hours. These protections continue this Government’s commitment to helping lone parents achieve a constructive work-life balance.

Noble Lords may also be aware that yesterday we published Building Bridges to Work: New Approaches to Tackling Long-Term Worklessness. That paper includes a package of measures to support the long-term unemployed and those on sickness benefits getting back to work. One element of this package is a jobseeker’s guarantee, giving jobseekers a guaranteed offer of a job, internship, volunteering placement or work experience after two years of being out of work. That guarantee ensures that we are supporting those who have been hardest hit by the recession. However, we still want properly to test and evaluate the approaches to support we will deliver in the Work for your Benefit pilots. The pilots will therefore run in parallel to the new guarantee in pilot areas, allowing us to gather evidence on the impact of full-time work experience to inform our longer-term strategy and further development of the jobseeker guarantee. It is right, however, that in this economic climate we do not wait two years for evaluation before we put in place extra support nationally.

The draft regulations will allow us to implement a pilot scheme in four English Jobcentre Plus districts. These are: Greater Manchester Central; Greater Manchester East and West; Cambridgeshire and Suffolk; and Norfolk. In particular, the regulations will state who will be required to take part in the Work for your Benefit scheme and establish a sanctions regime to underpin the pilots. Customers will be required to participate in the scheme either when they are randomly allocated to that option prior to commencing the Flexible New Deal or when they are referred by their Jobcentre Plus adviser at an earlier point in their claim. Customers who fail to participate in the scheme without good cause will be subject to a regime of escalating sanctions. Jobseeker’s allowance may be withheld for two weeks in the first instance of a breach of agreement, four weeks for a second breach, and two weeks for a third or subsequent act or omission.

For the new scheme to be successful, we must encourage those JSA claimants who are selected to participate to engage fully. Mandatory programmes engage greater numbers of people, and they are sometimes necessary to help those who face the greatest barriers to work. Those other benefits which a customer may be claiming will not be affected by the sanctions regime. Only jobseeker’s allowance payments will be suspended in the course of a breach of the jobseeker’s agreement for customers on Work for your Benefit. As in other employment programmes, the regulations provide for hardship payments to be available for customers in vulnerable groups to ensure they can continue to receive their jobseeker’s allowance at a reduced rate.

These regulations also ensure that participants continue to meet the entitlement conditions for jobseeker’s allowance while they are participating in full-time activity. Our external providers will facilitate a full range of job search support for up to 10 hours per week for the duration of the scheme, so by virtue of taking part in the scheme, customers will be actively seeking work. In addition, to provide flexibilities to smooth the transition to work, the regulations allow customers 48 hours to attend an interview and up to one week to start work.

I finish by restating the Government’s commitment to helping into work all those who can work. We have revolutionised our service provision for jobseekers, and the innovative nature of the Flexible New Deal is an example of this. However, even the bespoke support offered by the Flexible New Deal cannot help everyone into work, so we want to trial the new Work for your Benefit scheme as an extra layer of support. Moving our most vulnerable customers as close to the labour market as possible is essential to realising their potential. This pilot aims to furnish long-term jobseekers with the skills and habits needed to re-enter the world of work, but it will also grant them access to externally provided job search support and advice.

I thank noble Lords for their valuable contributions during the passage of the Bill last year. I hope that they will agree to these regulations so that we may put our words into practice. I beg to move.

My Lords, I thank the Minister for introducing these regulations, which we welcome. The merits and pitfalls of a Work for your Benefit scheme were closely scrutinised in this House when the Welfare Reform Act 2009 went through. Indeed, we spent many days on this matter assessing the potential unintended consequences it could have on the most vulnerable recipients of benefits. At the end of that process, we had a much clearer idea of the detail of who this scheme is intended to help, what safeguards there are to stop it requiring impossible steps and the help it would provide to those participating. That help is desperately required. There are still 1.5 million people claiming jobseeker’s allowance, and even worse, a record 8,160,000 economically inactive people.

The Government like to come up with all sorts of productive activities that a person no longer claiming unemployment might be doing, but with employment levels at the lowest they have been for 16 years, it is clear that those people are not getting back into work, and with the already hugely oversubscribed higher education sector facing £1 billion of cuts over the next three years, I doubt very much that all those economically inactive people are improving their chances via further education. This scheme provides another stage at the end of the Flexible New Deal and provides another route for a recipient for whom the system has already been proven to have failed. With fewer than one in four people in 2009 leaving Labour's New Deal to find a job, we welcome this scheme as a route to engaging a recipient with workplace activity.

As such, I could wish that the Government had found a way to roll out this scheme on a faster timetable than is currently their intention. As noble Lords know, consultation on these proposals was carried out nearly two years ago, and yet the vast majority of those who will benefit from this scheme will not have this option available to them for more than four years. The Explanatory Memorandum makes it clear that interim evidence will not be published until the summer of 2011 and that the full evaluation will not come out until late 2013 or, possibly, early 2014.

Of course, it is valuable to discover how well Work for your Benefit will perform in this country, but the considerable time that the Government have insisted on before we have the answer means that the Government—whoever that might be—will be flying blind on how this element of their programme fits in with other elements for many years to come. Quite apart from the Government’s guarantee, which the Minister mentioned a short while ago, I am thinking, in particular, of the “invest to save” approach on the Government’s model and the work programme on a future Conservative Government’s model. In each case, we are looking at programmes in which providers are incentivised to individualise their offering to clients and to work with them for an extended period. The issue I have a concern with is that this entirely separate pilot will not give us information on what is likely to be the real world post-2013. Participants in these pilots will not have experienced the “invest to save”/work programme approach, so the findings may not tell us all that much about what happens in a future world. I would be most grateful for the Minister’s views on how the Government’s programmes in this area might interrelate.

My Lords, I, too, thank the Minister for explaining these regulations, which bring in four pilot schemes—two urban and two rural—for the controversial Work for your Benefit provisions starting in November this year for two years.

It is important to be sure just what the pilots are intended to show. The Explanatory Memorandum states:

“The aim of the scheme is to test whether mandatory work experience, coupled with job search support, helps the long term unemployed find and sustain work”.

By “work”, I gather that we are talking about a minimum of three months, after which the provider will be paid for getting that person into work. We have heard the view of the Official Opposition again today. I do not know whether they think that we do not need this pilot at all. They certainly think that we do not need a two-year pilot but should just get on with the scheme. “Further and faster” seem to be their watchwords, but the evidence from other countries, as the Government have acknowledged, is mixed about whether a Work for your Benefit scheme increases the likelihood of a long-term unemployed person finding work.

There is a view that such schemes can even reduce employment chances by limiting the time available for job search and failing to provide the skills and experience that are valued by employers. One finding from DWP research report 533, A Comparative Review of Workfare Programmes in the United States, Canada and Australia, by Crisp and Fletcher, is not a surprise. It was that workfare, which is similar to Work for your Benefit, was least effective in getting people into jobs in weak labour markets where unemployment was high.

We have had the argument endlessly about whether this is the time to be introducing the Work for your Benefit scheme. The Government have consistently said that this is exactly the time to give people more support in looking for employment. No one can possibly argue with providing more genuine support for jobseekers. However, if the jobs are not there, they are not there, and no amount of Jobcentre Plus smoke and mirrors can find them. I wonder what sort of work placements will be offered to Work for your Benefit claimants. We simply do not know. I understand that companies have to sign a declaration that the placement will be in addition to existing or expected job vacancies.

We fear that there are likely to be cuts in the near future in public sector employment. Perhaps these work placements will be in that sector. The Minister in another place spoke about the strong recovery in places such as Cambridge, because of all the new technology there. Cambridgeshire is certainly one of the pilot areas for this scheme. The others are Suffolk, Norfolk and Greater Manchester. Has the department made any assessment of the likely strength of the jobs market in all the pilot areas?

Perhaps one sign of a confusion of policy is that, as the Minister said, Jobcentre Plus officers are encouraged to identify for early access to the Work for your Benefit scheme some claimants who have been unemployed for less than two years, if they think that they will benefit from it. However, these people, who might think that they are being singled for preferment or extra help, will actually be in a sanctions regime, as though they were demotivated and work-shy.

Another finding from the Crisp and Fletcher report is that workfare is least effective for individuals with multiple barriers to work. These are, of course, precisely the people who are likely to be unemployed for two years. Several employment providers, in responding to the No One Written Off consultation, were concerned about the inflexible six-month running period of the Work for your Benefit scheme, making the point that it should be individually tailored to suit the individual’s needs.

WorkDirections, which is a well respected provider, suggested designing the length of the placement by asking the clients some simple questions at the action-planning stage. For example, what are the constraints that the clients are facing? What does the client need to gain? How long will it take to gain the relevant skills, knowledge or experience? How can progress be verified? In other words, a six-month one-size-fits-all placement is too inflexible.

If it is clear after, say, three months that the particular placement is not suitable for a particular individual, and may even be counterproductive, what will happen to that individual? Will JCP monitor the progress that is being made by individual claimants throughout the 26 weeks? Will the claimant have any choice over the work experience that they undertake, or will they be left to do the whole six months, come what may? I know that the phrase “good cause” will be used by the Minister as a reason why a claimant could stop a placement, but I do not think that “good cause” encompasses unsuitability of the work placement. If the claimant knows that the particular placement that they have been allocated is not giving them the right sort of experience, for example, will they be able to take the matter up with the provider or should they take it up with Jobcentre Plus? The last thing that we want is for claimants just to default on a placement and, by doing that, to receive a sanction because the particular placement was totally unsuitable for them. I am all for the personalisation agenda and for work experience placements, especially their length, being designed to suit an individual, but this is not what we are getting with this pilot.

Finally, I am disturbed that claimants will be allocated randomly to the pilots. This seems totally at odds with the whole tailored-to-the-individual approach that the Flexible New Deal was supposed to give people. My honourable friend Steve Webb in another place, who is a social scientist, makes the point that a Flexible New Deal provider should already have given the claimant work experience during the two years that the claimant was unemployed. It seems distinctly odd that such a claimant might be randomly assigned to a Work for your Benefit scheme when their only problem is that there is no suitable job available. I wonder whether part of the reason for this whole scheme is to clamp down on those who are suspected of moonlighting—claiming and working on the sly. The noble Lord, Lord Freud, mentioned this.

This may be the last time that the Minister and I are sparring across the Chamber on DWP matters and I should like to end by thanking him for all his hard work in this rather unfashionable area of government activity. I also thank him very much for his unfailing courtesy in the way in which he has fulfilled those duties, particularly answering all our questions, however difficult. We are most grateful to him for all his work.

My Lords, I, too, thank my noble friend for bringing forward these regulations. I should like to add a little more optimism to the debates. I recognise that there are many complexities in the jobseeker’s allowance Work for your Benefit pilot scheme, but does my noble friend accept that, in working with DWP, as many of the sector skills councils are, there are opportunities for private employers that are already expressing an interest to ensure for the longer term that these young people—they are mostly young people, although some are older—are brought into the sector of work? In this way, the understanding of going to work, getting up and all the interests that we know employers have are fulfilled.

I seek a couple of assurances from my noble friend. First—I think that he has already stated this—I hope that the pilot will not have to run its full length before we start to look at increasing the opportunities. Secondly, I hope that there is a clear understanding of how this will work, so that individuals know that this is not a job but an opportunity for a placement and so that employers clearly understand that what they are bringing for these young people is the opportunity to understand the world of work, without necessarily guaranteeing employment. There has been some confusion over that. Certainly I welcome this opportunity on behalf of many of the sector skills councils.

My Lords, I start by thanking the noble Baroness, Lady Thomas, for her kind remarks. I would not necessarily accept that this might be my last time in this role at the Dispatch Box, but we will have to see. I thank all noble Lords who have spoken in the debate. I have to start off with the confession that in my opening presentation I made an error when I said that the sanction for a third act or omission was two weeks, when in fact it is 26 weeks. My apologies for that; it ought to be put clearly on the record.

The noble Lord, Lord Freud, gave us his view of where we are in terms of employment and unemployment statistics. He will be aware that the latest figures showed that there were 2.4 million more people in employment than there were in 1997. The employment rate is 0.5 percentage points lower, at 72.2 per cent, but the long-term claimant unemployment count is 58 per cent lower and the long-term youth claimant unemployment is 28 per cent lower. That shows that a Government who are active in looking at employment policies can make a difference. In particular, if you look at the expectations that pundits have around unemployment, given the recession, you see that unemployment is half a million lower than was expected last year, with 365,000 more lone parents in work and 600,000 more disabled people in work. The noble Lord made reference to the inactivity rate—the figure of 8 million, I think—but he will know full well that this is partly attributable to the fact that there are more people and so there will inevitably be a higher number. Also, the figure covers many more students than there used to be in full-time education, which is something that I am sure we would both welcome.

The noble Lord asked about the evaluation of the work programme. We are already testing a cross-benefit approach through the personalised employment programme from spring of next year. That includes the new funding model, which of course will be familiar to him. He asked how this fits in with our other schemes. Work experience is only one element of the potential support. It is important that we test this element and ensure that it is as good as it can be. We will include work experience as part of the wider support that is included in the jobseeker’s guarantee, which we announced yesterday.

The noble Baroness, Lady Thomas, asked whether this is the right economic climate for these proposals. We need to keep people who are out of work as close to the labour market as possible, regardless of economic conditions. This gives them the best chance of capitalising on the recovery when it occurs. We will not repeat the mistakes of the past and ignore unemployed people when they most need help.

The noble Baroness also referred to research reports on workfare. The research shows that similar programmes in other countries have had varying success. However, we do not intend blindly to mirror what has gone before. We want to learn from others’ experience and to develop a programme that meets our own needs and moves people into work. This is why the programme includes up to 10 hours per week of additional support from the provider.

The noble Baroness asked where these placements will come from in the current economic climate. I will also deal with the point made by my noble friend Lady Wall. Work for your Benefit placements are not permanent jobs; they are work experience placements and can be located in any number of organisations, including in the public sector, where appropriate. We do not expect the number of participants to be large and we will run pilots in limited areas, but we will ensure that placements are in addition to any existing or expected vacancies and that they do not result in companies taking on Work for your Benefit customers at the expense of recruitment. All employers who offer work experience placements must sign a declaration—the noble Baroness sought confirmation of this—that states that the placement is in addition to existing or expected vacancies in their organisations. It is very important, as my noble friend says, that this is a transparent process.

The noble Baroness also asked about the work that people will do. The type of work experience will be different for everyone. We will ask providers to source individual work experience placements that are based on the needs and aspirations of the individual. This bespoke work experience will have a far more realistic chance of helping jobseekers into work. It is therefore not a one-size-fits-all approach; it is very much to the contrary. In comparison, workfare tends to be work experience in isolation and is without the additional employment support and training that are included in the Work for your Benefit programme. In addition, workfare placements have tended to be one-size-fits-all, which is not what is intended here. Work for your Benefit will provide work experience that is based solidly on the needs and aspirations of participants, so their aspirations will be taken into account.

The noble Baroness also asked about random allocation. Random allocation is the most robust method of evaluation, as we are testing two different options against each other.

I hope that I have dealt with each of the points that noble Lords have made. My noble friend Lady Wall made the point that the pilots will proceed over a couple of years, but our announcement yesterday means that we will proceed with the job guarantee for everyone who has been out of work for two years, and we will not await the finalisation and the evaluation of the pilot, as I explained in my introduction. With those comments, I seek approval for these regulations.

Motion agreed.