Budget 2009 - impact on welfare-to-work

The following summary highlights the key impacts of the 2009 Budget on welfare-to-work delivery. For each section, I've included the relevant part of the actual Budget report, for reference. This report is still being edited and added to - check back later for more content

More money for delivery

The major announcement affecting welfare-to-work was an increase of £1.7bn in the DWP budget. It's unclear from the Budget statement whether this is intended for Flexible New Deal, Jobcentre Plus or a range of contracts and delivery. This is in addition to the £1.3bn announced in December.

Of course, the extra funding isn't a beanfeast for providers - the strings attached include up to three times as many customers and much greater difficulty in getting people back into work in a recession.

Alistair Darling claimed that JCP had halved the average length of unemployment compared to that of claimants in previous recessions.

5.25 The most effective way of limiting the impacts of unemployment on individuals, their families and communities is to ensure that the existing regime continues to deliver a rapid return to work. Therefore, the Government is setting aside an additional £1.7 billion for the Department for Work and Pensions to ensure that Jobcentre Plus has the capacity to deliver a personalised service to individuals and the Flexible New Deal (FND) employment programme will provide individuals who become long-term unemployed with dedicated support from an employment specialist to help them move back into work.

More 18-24 support

From July all 12 month claimants under 25 will be guaranteed either a job, or training, or a work placement. JCP will work with employers to create up to 250,000 jobs, apparently through a vague mixture of LEPs and public sector initiatives. It's not clear how this improves on the existing New Deal and future FND delivery, given that both programmes start up-to-full-time delivery at 12 months and deliver, um, a job, training, or a work placement!

There is also £260m new money for skills training for young people in sectors with strong future demand. Apparently this has already been allocated to colleges, and is widely seen as helping to fill the hole left by the LSC funding crisis.

Box 5.4: Creating opportunities and supporting the long-term unemployed
The Government announces a range of measures that will help support the long-term unemployed including:

• guaranteeing everyone aged between 18 and 24 who has been claiming JSA for 12 months a job, work placement or work-related skills training for at least six months. If it becomes necessary to do so, the Government will work with local authorities and other delivery partners to determine how participation in one of these options could be made mandatory;
• funding for Care First, offering 50,000 traineeships for young people in the care sector. Social care providers will receive a subsidy for offering sustained employment and training to young people who have been out of work for 12 months. This will give them the skills and experience they need for a career in this growing sector;
• funding for local authorities and partners to take forward the creation of 100,000 new jobs in socially useful activity. 10,000 of these will be green jobs; and
• the public sector will ensure that 25 per cent of their external recruitment is targeted at individuals without a job.

To support communities most affected by rising unemployment, the Government will allocate additional funding for local authorities to provide a further 50,000 jobs in areas of high unemployment across the country.

Unemployment and the Economy

In addition to the direct Budget news, the latest labour market statistics and economic figures were released this week.

BBC News has the latest jobless figures: 2.1m workless, 1.47m JSA. Apparently smaller than expected. The official figures are here, and the DWP press release is here.

Meanwhile, the economy is declining far faster than in the previous recession

Responses

The Times collects a wide range of reactions

ERSA welcomed the increased welfare-to-work funding

Independent columnist recalls the 1980s YTS schemes, wonders if the 18-24 pledge is a rerun

Lawrence Kay tries to figure out the government's real unemployment estimates using the increase in FND funding

Times columnist - What if they don't want a job?

Resources

The relevant chapter of the Budget report (pdf)

National Statistics give the facts without the spin

Nomis is a useful tool for working with labour market statistics

Finally, for reference, the Pre-Budget Report and January Jobs Summit, as digested in the Budget report:

Box 5.3: 2008 Pre-Budget Report Employment Package and January Employment Summit
The fiscal stimulus delivered at the 2008 Pre-Budget Report is expected to support employment across the economy. It was complemented by a substantial employment package including:

• £1.3 billion to ensure Jobcentre Plus can continue to deliver the JSA regime effectively forhigher numbers of people. Despite rising unemployment, more than three out of four who claim unemployment benefits move off them within six months, and over a million people have moved back into work since November;
• £158 million to provide skills support to people under notice of redundancy, or who have become unemployed. Over two years this will help 40,000 people to improve their skills or
  re-enter the job market through a two to eight week personalised package of support;
• increased provision for the Rapid Response Service to expand its support to small-scaleas well as large-scale redundancies. This service provides onsite support for employees in finding a new job, even before a redundancy takes place. Since the Pre-Budget Report over 1,500 employers have used the service;
• the creation of the National Employment Partnership between Government and major employers to agree strategies to help people back into work; and
• steps to expand Local Employment Partnerships (LEPs). Since their creation in 2007, over 145,000 individuals have found jobs through LEPs.

Further support was announced at the January Employment Summit to help the minority that remain unemployed for over six months. Support now includes up to £2,500 for employers that recruit and train those in receipt of JSA for six months or more, as well as training places, volunteering opportunities and financial support and advice for those wanting to set up their own business.

Budget report quotes are Crown copyright