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A clear case for devolution?

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The Work Programme has been an attempt by the Department for Work & Pensions to offer incentives to solve unemployment.

Put simply, those who have been unemployed long-term go on to the programme where providers – drawn from the private and voluntary sectors – are paid by results. If they get them into a job, they get a payment from the government. Everybody, in theory, wins.

As the DWP has put it: “We will pay back-to-work service providers according to the results they achieve.”

In practice the results have been rather mixed, with the programme drawing criticism over the low numbers of people successfully steered into employment by the 18 ‘prime contract’ providers.

A report by the work and pensions select committee last spring noted that in the period from June 2011 to July 2012, the first for which results were published, 31,000 job outcome payments were paid to providers from 878,000 referrals, a success rate of only 3.5% and well below any of the targets set by DWP for claimant groups.

All 18 providers were “technically in breach of contract”, it noted.

Things have improved somewhat. DWP statistics from December 2013 showed that after one year 11.7% of those who joined the programme in September 2012 had attained a ‘job outcome’ – up from the 8.4% for the June 2011 intake but down from the 13% for that of June 2012.

“While the proportion of job outcome payments attained by monthly Jobseeker’s Allowance intakes at the 12 month stage remain above those of the early programme intakes, more recent intakes have seen a slight fall,” the report said.

The committee’s report also voiced concern about whether any success the programme had seen was based on finding work for those people who were the easiest to help.

It said: “The Work Programme’s differential pricing structure, which is designed to financially incentivise contracted providers to support those with more challenging barriers to employment, is not having its intended impact on providers’ behaviour.

“The hardest to help jobseekers remain at risk of being ‘parked’ – given little or no support by providers who assess them as being unlikely to find sustained work.”

This rather mixed performance has prompted local government to suggest that it could do a considerably better job than the providers, and in some cases councils have the evidence to back this up through the result of local initiatives they are running.

LGA chair Sir Merrick Cockell (Con) last summer said in a letter to welfare reform minister Lord Freud that the DWP would be “missing a great opportunity if it did not take full advantage of what councils have to offer”.

The LGA suggested councils should “play a central and default role” within a mixed economy of providers and should become the accountable body for funding devolved by the DWP, which had indicated it might do this but only to its district managers.

It has also urged a greater role for local government in tackling youth unemployment

London Councils then also called for the Work Programme to be devolved to council control.

Peter John (Lab), executive member for employment and skills, said at the time: “The work programme is failing those most in need. For welfare-to-work schemes to support the most vulnerable successfully, there needs to be exceptionally strong links between the scheme, the people and the services on which they depend.

“By devolving the scheme to councils the government would radically improve employment support and offer real hope to those who need it most, reversing years of low expectations of what can be achieved.”

London Councils compared the DWP’s outcomes with the Work Programme unfavourably with the 37.5% success rate of Wandsworth LBC’s employment scheme for people with physical and mental health problems.

The eight core cities also joined the fray with Nottingham City Council leader Jon Collins (Lab) pointing to only 3.8% of people in the city referred to a sustainable job by the Work Programme against the 30% success rate of the Nottingham Jobs Fund.

County councils also wanted to take on this responsibility in rural areas.

There is a great deal of expertise in local government in getting people back into work.

Examples though are scattered, with some councils having elaborate programmes and others very little, and not necessarily according to the pattern that might be expected – prosperous South Northamptonshire DC, for example, has a scheme while numerous councils in economically deprived areas were unable to point to any initiative.

Appropriately enough for bodies enthused by localism, councils have designed programmes to help unemployed people best suited to local needs and job markets.

Devolution might well deliver better results, but would national politicians be willing to allow this aspect of welfare reform to leave their control and morph from a single national scheme to multiple local ones?

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