‘Welfare to Work’ must be wrested from Whitehall
Cllr Joe Dromey, 26 October, 2015

The Work Programme, introduced shortly after the 2010 election, was supposed to be the solution to the challenge of long-term unemployment. Ian Duncan Smith MP hailed it as a revolution in welfare to work that would offer ‘targeted, personalised help for those who need it most.’

It has been a success and a failure. It has succeeded with the easy bit; supporting those closest to the labour market such as those on Jobseekers Allowance with recent work experience, back into work. But it’s failed with the harder bit – helping those who face multiple complex barriers to work. Among those on the programme who previously claimed Incapacity Benefit, just one in 25 has found a sustainable job.

This is in part due to the design of the programme. It was commissioned by the Department for Work and Pensions (DWP) over vast areas from large private providers. Duncan Smith said they would bring ‘ideas and energy’ to the programme. In his eyes of course, the public sector is capable of neither. The intention was for these prime providers to construct diverse supply chains including smaller, voluntary sector providers that would offer people specialist support. But this has largely failed to come about.

For a Government that has preached localism, the Work Programme was remarkably centrally-driven. The DWP ran a commissioning process that afforded virtually no involvement to local authorities. The contract package areas bore no relation to coherent economic geographies – London for example was split right down the middle, with completely separate providers and programmes operating in east and west.

In south London, Lewisham, Southwark and Lambeth Councils are showing that there is a better way. Our three councils came together to set up a pilot project – Pathways to Employment – aimed at reducing the higher levels of long-term unemployment we face in our communities. Staff from the councils, Jobcentre Plus and a voluntary sector provider work together in co-located teams to support Universal Credit claimants with complex needs.

The programme starts by triaging people to assess their needs, It then provides them with a dedicated keyworker who – as they have low caseloads – can offer intensive and personalised support. As a former employment advisor, I know how effective this dedicated one-on-one help can be in building a relationship, identifying someone’s needs, and helping them work through them. The programme is funded through the European Social Fund, the Big Lottery Fund, and CLG’s Transformation Challenge Award, rather than through our general budgets which have been hammered by central government cuts.

Pathways to Employment has some outstanding results. It has helped 20% of people into work, and it aims to increase this to 30%. The Work Programme by contrast has helped just 3.9% of former Incapacity Benefit/ESA claimants into work. It has recently been highlighted as good practice by the Work and Pensions select committee.

So, with Work Programme contracts coming to an end next year, what can we learn from our experience?

First, as Pathways to Employment and other programmes have shown, those furthest from the labour market require intensive, personalised support to overcome multiple barriers to work. This is best provided by a skilled and compassionate keyworker who can work one-on-one with a claimant, and dedicate the time that’s needed to them.

Second, the programme works because it brings together teams from different agencies to address the various barriers to work an individual might have, from housing, health, education and skills to debt and financial advice. The Work Programme struggles to support the hardest to help precisely because it is a bolt-on service that tends towards silo-working, rather than integrating into existing provision.

But there are also wider lessons for the commissioning of support for unemployed people. The architects of the Work Programme thought that they could design a programme from Whitehall that could address the vastly divergent needs of communities up and down the UK. They thought that by setting up the right contract, private providers would offer tailored and intensive support for the hardest to help. This has been shown to be hubris.

Whatever replaces the Work Programme must be far more sensitive to local needs, local communities and local economies. It is good to see the Greater Manchester Combined Authority being offered the chance to co-commission, and hear hints of the same for London. But it is not yet clear what DWP means by co-commissioning or the extent of involvement local areas will be permitted.

Co-commissioning would be a welcome step forward. But the government could go much further. Why shouldn’t city regions or groups of local authorities be given responsibility for commissioning their own support, rather than DWP divvying up billions of pounds of public money between private providers from Whitehall? Local authorities know their communities – and they’re accountable to them. They know their local economies, and the barriers to work people face. We are best placed to lead on this agenda.

This would have to come with the cash – this Government has a nasty habit of devolving responsibility, but not budgets. But this work could fund itself. Councils are being allowed to keep business rate increases as a result of stimulating local economies. So why shouldn’t we be allowed to invest in getting our people into jobs and building homes, and fund such work through the reduction in welfare spending this would deliver?

With local authorities pioneering welfare to work services such as Pathways to Employment, and Workplace in Newham, why shouldn’t they be considered as possible delivery partners? And why on earth are our local Jobcentre Plus services run from Whitehall, rather than from the town hall, or City Hall?

The DWP estimates it will have spent £2.8billion on the Work Programme by March next year. It spends more still on Jobcentre Plus. I reckon local authorities could get much better value for money. The Government preaches localism. It’s time to see it in practice. A radical plan for devolution of power, responsibility and funding for welfare to work could allow councils and communities to tackle unemployment and build more sustainable and inclusive economies. Long-term unemployment is a national problem, but it is one that requires a local solution.

Councillor Joe Dromey is Cabinet Member for Policy and Performance at the London Borough of Lewisham.