Workless in 2009 – Event Report

Shortly before Christmas, CESI ran a particularly star-studded conference. The sheer quantity of information from the 14 speakers and 6 sessions has taken a while to digest. I've put together some highlights, and the session plan and PowerPoint slides can be found on the CESI website.

It's the recession, stupid

John Philpott (CIPD) was all over the media with his analysis of the recession in December, although his presentation went into more depth than the newspaper articles. Following a rush of new claimants in the New Year, he estimates 2.9m unemployed by the peak of the recession in early 2010, slightly below the 3m estimated by other analysts. There are a number of differences to previous recessions that he mostly identified as positives, leading to a return to the recent employment highs by 2012-13. He was somewhat unimpressed by the failure of the government to think the unthinkable ten years earlier, and in common with Dave Simmonds identified the large numbers of pre-existing long-term claimants as an issue.

Dave Simmonds (CESI) went further into the recession's impact on delivery, drawing out a succession of important points for organisations seeking to predict how many claimants from which disadvantaged groups will need support. Lower skilled workers are suffering disproportionately, but there is surprisingly little evidence of other disadvantaged groups being more hit than the mainstream. A complicating factor is that youth unemployment and IB numbers are not notably better than in 1997. He also identified a wrinkle that could upset provider and DWP calculations - in recessions, close to 100% of unemployed people claim unemployment benefits, instead of around 50% at present. This led to a range of recommendations for government to manage delivery in recession.

Amanda McIntyre, the new ERSA Director, focused squarely on the issues that mattered to providers: making the new contracts work. She identified the keys to this as being flexibility, fairness and trust, both from deliverers to claimants and between the deliverers and commissioners of claimant support. Specific proposals included finding a way to reward providers for getting customers into temp jobs that maintain job readiness, providing more support for new claimants, and investing the fiscal stimulus in welfare-to-work delivery. There was also a brief discussion on how to marry sharing of best practice with a black box commissioning approach - someone sitting close by observed that private sector firms in most industries often share best practice through a pull (i.e. nicking ideas) approach rather than a push one (giving them out freely).

Ministerial presents - James Purnell, Adam Sharples, Chris Grayling and Terry Rooney

The main new announcement from James Purnell was £108m of extra ESF funding. This was slightly deflated by the rumour that the primary source of the extra funding was the plummeting value of the pound - ESF funding comes in Euros! There were also a number of indications of the direction things might go in - making use of provider capacity to help with the numbers, a focus on maintaining off-flow (i.e. job entry) rates, keeping to schedule on FND1, and flexing entry criteria to programmes that don’t have enough starts. Interestingly, he was very ambivalent about the merits of part-time working. Many people choose to stick permanently with part-time work and benefits if they have the option, thus reducing off-flow rates and benefit savings.

Adam Sharples' role was sitting next to James Purnell, providing support on questions that required in-depth knowledge of the DWP employment division's workings. After James left, he presented the DWP's analysis of the recession, their response to it, and how they planned to work with partners including local authorities and providers. The prospects of more work and no protection against underperformance were dangled as a carrot and stick for providers, while local authorities were recommended to focus on filling the gaps in DWP services, partnership building and outreach.

Chris Grayling, the Shadow Minister for Work and Pensions, had the good fortune to give his speech just after David Cameron had differentiated the Tories from Labour. No mandatory activity for parents of young children, no use of Work For Your Benefit as a sanction for non-attendance, single contracts covering all kinds of benefit in their area, and national roll-out of DEL-AME rather than a piloting-first approach. James Purnell tried to take the wind out of his sails beforehand by pointing out that both Freud and the Conservative's own welfare proposals had included mandatory activity for lone parents.

Despite his pro-government voting record, Work and Pensions Committee Chair Terry Rooney displayed a fiercely independent streak in his contribution, claiming that an end to the Working Time Directive opt-out would create 125,000 jobs, that the 21 hour rule needed to be dropped, that better off in work calculations were flawed because they missed out housing benefit and school meals, that WNF is being widely misused by local authorities, and that FND will fail horribly at its estimated rate of £1500 per person. He also asked everyone to complain about the proposed 20% interest on Social Fund loans (this hit the press and was swiftly retracted by the government not long after).

The best of the rest

There were a further seven speakers, with backgrounds from Local Authorities (Steve Houghton summarised his review of localisation of welfare-to-work), to Union Reps (who wanted all private sector delivery abolished), to yet more economists (who argued that AME-DEL will provide very little extra funding, as borrowing is already so high).

Of particular interest was Dan Finn, who analysed the impact of the recession on poverty (very bad, and starting from a worse place than previously because of high personal debts), and shared the negative outcomes of applying an FND-style black box model in Australia:

• 4 to 8 weeks of intensive activity at the start of the programme, with unsuccessful customers parked for the rest of the time
• No spending on recruitment or employment subsidies, or any other effective but costly support
• No linkage with or provision of skills training

Offsetting this was a 5-10% increase in job outcomes from performance-based contracting. There's a short, readable summary of Dan Finn's work available here.

Additionally, the event sponsors, Serco, were represented in the form of Richard Johnson, who made few friends among other providers with his picture of the terrible results when delivery and contracting go wrong. A particularly sharp rebuke to one unnamed provider for their cynical approach to FND design left some of the audience rather grumpy - presumably not the ones who've been taken on as Serco subcontractors.

However, Richard finished with an example of what can happen when things go right, and people with multiple barriers obstacles constraints find someone who believes in them and supports them back into employment and everything that goes with employment. The conference was almost surprisingly hopeful, given the wider doom and gloom. It was also far too packed to condense into one article.

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