The differences between New Deal and Flexible New Deal

Flexible New Deal is now live and delivering across half the country, but it's become evident that lots of people don't know what this means. Therefore, for your enlightenment and edification, we have put together a brief guide of the differences between the old and new support regimes for job seekers. Note that this guide does not include Support for Newly Unemployed Professionals, Programme Centres, or the Young Person's Guarantee. They all have an impact, but we're discussing New Deal in this article.

We've broken down the changes between the two systems into two chunks. The first is the overall process, and the second is how delivery works. Although the structural changes are more obvious, the how is probably more important for customers.

What's happened to the structure?

As the diagram below makes clear, almost every stage of claiming Jobseekers' Allowance has changed compared to the previous system. Support starts much earlier, ramps up gradually through a number of stages, and gives providers a much longer time to do their thing with customers.

New Deal

The New Deal was set up in 1998 as one of the Labour government's flagship welfare policies to help long-term unemployed people find work. Initially focusing on tackling youth unemployment, the scheme developed and branched out into a number of additional programmes - New Deal for Lone Parents, New Deal for Disabled People, New Deal for Partners, and New Deal 50 Plus.

So, under the New Deal, this is how it was (and, at time of writing, still is for half the country):

JSA - Claimants sign on regularly for their JSA benefits, and may be asked for evidence that they're looking for work. 18-24 year olds can claim JSA for 6 months before entering New Deal, and over 25s can claim for 18 months. It's possible for claimants with particular needs to skip this stage. Claimants may be eligible to undertake various non-New Deal support programmes, such as Support for Newly Unemployed Professionals, Programme Centres, ESF programmes and so on.

Phase 1. 'The Gateway' - 4 months. This includes the provision of adviser support, and a mandatory 2 week Gateway to Work course. At this stage clients will be interviewed and prepared for the 'options' stage, as well as working with an adviser to draw up an 'action plan' outlining how they are going to try and find suitable work.

Phase 2. 'Options', 'Intensive Activity Period (IAP)' (depending on which New Deal you were on) - 13 weeks. The 4 main options are 1. a subsidised job with an employer, 2. full-time education and training, 3. work within the voluntary sector, or 4. work experience with an environmental task force. Participation in options is not optional, and the options have a minimum attendance requirement (usually 30 hours a week).

Phase 3. 'Follow-through' - 6-13 weeks (shorter on New Deal 25 plus). If an individual has not entered employment after the options stage, then follow-through help is available to help solidify progress made up to this point. Weekly interviews with an adviser make up part of this stage, as does the chance to gain accreditation through a training course (if necessary after the options stage).

If work has not been found after the completion of the New Deal programme, then individuals have to reapply for JSA and start all over again. There are claimants who have cycled through JSA and New Deal numerous times since it was created.

Flexible New Deal

Phase 1. 'Self-help' - 3 months. The initial stage involves a mandatory 'back to work' group session, assessment of skills, and relatively light intervention from an adviser whilst looking for work.

Phase 2. 'Directed job search' - 3 months. Individuals are helped in widening their job search, and attend 6 weekly meetings with Jobcentre Plus advisers. Pre-recession estimates were that 8/10 people would leave JSA at this stage. Hopefully because they've found work...

Phase 3. 'The Gateway' - 6 months (early entry is possible for under 25s who have been unemployed for 6 months, or for those who need extra help). This stage has been given the same name as 'Phase 1' of the New Deal. A clear similarity is the increased level of adviser support at this stage. This element involves a full assessment of a client's needs and situation, the development of an 'action plan', and thorough adviser support. The aim here is to really focus on finding someone work whilst still under the direct remit of the Jobcentre, before the flexible New Deal stage kicks in and people move over to the new provider-led system. Advisers will also be able to call in provider support through JCP Support Contracts once they kick in, for tasks such as interview preparation or CV editing.

This is also the stage where 18-24 year olds get referred to the Young Person's Guarantee schemes, usually after four months in Gateway. This means that YPG kicks in at the 10 month stage of unemployment, the same point that New Deal Options kicked in under the old New Deal system.

Phase 4. 'Flexible New Deal' - 1-1.5 years. Provider-led training, advice, and support for individuals. The format and designated hours of the scheme are set by the provider. Although there is a basic standard expected of all courses, different providers may go about delivery in different ways.

Phase 5? 'Work for Your Benefit' - If people still haven't found work after the extended FND phase, then they may have to carry out work-based activities of some description to put back into the system. A couple of pilots are currently being set up, but all bets are off in light of the forthcoming election.

So what's the difference, really?

The differences between New Deal and FND go beyond skin deep. They are built on fundamentally different approaches, which should become immediately evident to anyone undergoing the new delivery regime. Some of the changes include:

• Flexible hours and content - FND Providers can deliver services to meet customer needs, without worrying about government diktats on what to deliver, or when and how. There is no minimum hours requirement, as long as the provider delivers at least 4 weeks of work experience to each customer sometime during their first year on the programme. This is known as the 'black box' approach, and is entirely different to the New Deal approach of laying down how many hours customers should attend, what they should be taught, and requiring a sheaf of forms to prove that it all took place
• Looking for long term job outcomes - Providers are no longer paid for each job start. Instead, they're paid when someone enters work and then stays in it for a few months. Under New Deal, there was a strong incentive for providers to push customers into any job going so the outcome fee could be claimed. Now, providers will have to find more sustainable employment and provide some level of support to customers to make sure they stay in work
• Personalised support - It follows from the previous two points that customers should be dealt with more individually, having their specific needs identified and met, rather than sitting in a big room full of other attendees with a couple of knackered computers and some newspapers. In this sense it will be more like Employment Zones than the original New Deal. Having said that, the sheer volume of customers and the extremely tight targets and finances mean that some providers may have to deal with customers in bulk
• Long term support - Instead of a 13 week programme, providers get to spend a year or more with each customer. This gives them time to get to know customers, build rapport, and move them gradually toward work readiness
• Creaming and parking - Although payment on long term job outcomes is firmly in place, there is no mechanism for paying more money for customers that are harder to help. This means that providers have a clear incentive to 'park' customers who would be expensive to help, providing a minimal service while focusing their energies on those who can get jobs without too much support
• Prime contracting - Providers now have bigger, longer contracts and an array of subcontractors to support them in delivery. This may not have much immediate effect on customers, but the hope is that it will increase the availability of specialist support and make delivery more efficient

FND should hopefully realign provider and client interests, as sustained employment is now the primary focus of both parties. This should enhance people's experiences as a result, as more in depth focus on their individual situation should take preference as a way to achieve these long-term results over a more reductionist grouping approach.

The future, past

According to the DWP website, 'the labour market has changed beyond recognition: the New Deals are now 10 years old and so they too must evolve to ensure we are ready for the challenges of the next decade'. Many of the alterations are based on the 2007 Freud Report looking at how the welfare delivery system in this country could be changed.

However it is worth noting that not all of Freud's proposals have been included in the construction of FND. One clear example of this is his proposal to instigate 'intensive intervention at the start of a claim, focused on assisted job search' which, actually, is much more in line with New Deal than the gentler approach now seen at the start of FND.

Some of the changes being put in place have been tried in other countries, although whether they have been successful elsewhere is open to argument. Whether the new system proves itself has yet to be seen, and in fact may never be seen by half the country if the Conservatives are elected and scrap FND phase 2. Their own proposed replacement for New Deal is the Work Programme, and a brief outline is available here. Although similar to FND in its approach (both were designed with the input of David Freud), the structure is notably different.