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Working together: The Work Programme

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Presentation by Ciarán Morinan, Department for Work and Pensions, United Kingdom, on the occasion of the EESC conference on A labour market for all: efficient and innovative assistance to jobseekers, ...

Presentation by Ciarán Morinan, Department for Work and Pensions, United Kingdom, on the occasion of the EESC conference on A labour market for all: efficient and innovative assistance to jobseekers, in Stockholm, Sweden

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Working together: The Work Programme Working together: The Work Programme Presentation Transcript

  • Working together: The Work Programme Ciarán Morinan International Strategy Department for Work and Pensions, UK Stockholm, 13 th December 2011
  • The problem
    • most who come onto unemployment benefit leave quickly – around half within 3 months…
    • … but some get stuck and need more support to avoid long term unemployment
    • Proposition…
    • it costs a lot to keep people on benefit – could we spend some of that to help people back to work?
  • Partnerships – the rationale
    • Governments face increased unemployment and decreased resources.
    • Transfer the risk: partner providers make the upfront capital investment into research and employment interventions– Government only pays for success.
    • Many prime providers are multinationals, and can draw on their experience and practice in many different countries.
    • Providers have broad employment expertise – and can also sub-contract to specialist organisations with deep knowledge of vulnerable groups.
  • The Work Programme
    • Biggest of its kind the UK has ever seen
    • For those at risk of long term unemployment
    • Working with the private and voluntary sector
    • Advanced “payment by results” model
    • Flexibility for partners to innovate (“Black box”) – but with safeguards
  • Client Groups JSA = Jobseeker’s Allowance (unemployment) ESA = Employment & Support Allowance (disability) From 12 months From 9 months From 3 months From 3 months Voluntary at any time When customers are expected to be fit for work within 3 months Immediately on release
    • JSA customers aged 25+
    • JSA customers aged 18-24
    • JSA ex-Incapacity Benefit
    • JSA seriously disadvantaged in the labour market, NEETs, repeaters
    • All ESA customers
    • ESA (income related) customers who are placed in the Work Related Activity Group
    • Prison leavers
    Time for referral Customer Groups
  • Payment model Attachment fee reduces to nil by year 4 Outcome payments reduce from year 3
  • Differential pricing: Maximising incentives £0 £1,000 £2,000 £3,000 £4,000 £5,000 £6,000 £7,000 £8,000 £9,000 £10,000 £11,000 £12,000 £13,000 £14,000 £15,000 £400 £1,200 £2,800 2. JSA 25+ £400 £1,200 £2,200 1. JSA 18-24 £400 £1,200 £5,000 4. JSA seriously disadvantaged £400 £1,200 £5,000 3. JSA Ex-IB £600 £1,200 £4,700 6. ESA Flow £600 £3,500 £9,600 7. ESA Ex-IB 5. ESA £400 £1,000 £2,300 volunteers Sustainment payments Job outcome payment Attachment fee
  • Avoid paying for ‘do nothing’ outcomes
    • Some would find jobs without help
    • Will only pay for a job outcome for the unemployed after 6 months in work
    • Providers have to beat ‘do nothing’ outcomes to keep contracts
  • Paying for results out of benefit savings 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 4 8 12 16 20 24 28 32 36 Months Additional saving from Work Programme Cohort of customers on benefit Remaining cost of paying benefits Saving from normal off-flow without intervention
  • Prime providers
    • At least 2 per contract package area
    • Will compete for market share (referrals)
    • 7 year contract – long-term relationships, encouraging investment and long-term approach
    • Greatest ever freedom and financial incentives to succeed
  • In conclusion
    • Real innovation, drawing on the expertise, knowledge and experience of the private and voluntary sectors.
    • Powerful incentive to help people into work – including people further from the labour market - and to keep them in work.
    • With other welfare reforms a real chance of success.