Committee of Public Accounts: Press Notice

Helping people from workless households into work

Publication of the Committee's 9th Report, Session 2007-08

Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:

"If the Government is to achieve its aim of an employment rate of 80 per cent, then the DWP has to help some 1.6 million people who have out of work for a long time find jobs. Many will be from households where no one works and benefits are a way of life. Around 6 million people (including 1.8 million children) live in such households.

"This will be no easy task. The evidence is that many New Deal programmes are becoming less successful at finding work for their clients, perhaps because the hardest to help are becoming an increasingly large proportion of those clients.

"Many of those on benefits year after year are unskilled, disabled or caring for children. Their problems need to be tackled early, before the pattern of being unemployed becomes entrenched. Support also needs to be delivered by organisations with the right kind of knowledge of local communities. The effectiveness of employment support programmes in reducing the numbers of the long-term unemployed will depend on their ability to reach those people."

Mr Leigh was speaking as the Committee published its 9th Report of this Session which, on the basis of evidence from the Department, Jobcentre Plus and the Learning and Skills Council, examined the performance of employment support programmes; outreach services for workless households; and the provision of additional support for workless people with more complex needs.

The United Kingdom has an employment rate of 74.4%, an historically high rate which exceeds that of many comparable industrialised countries. The Government aspires to raise the employment level to 80% and has introduced a range of support to address barriers to employment and to help people into work, including its New Deal programmes. There are, nevertheless, still some 3 million workless households, of which 80% comprise adults who are not actively seeking work. Workless households have been estimated to cost the Exchequer at least £12.7 billion a year in welfare benefits.

The Department for Work and Pensions (the Department) estimates that meeting the aspiration of an 80% employment rate will mean finding work for around 2 million workless people, including one million people on incapacity benefits and 0.3 million lone parents. Success will require effective outreach services to workless households, which engage customers and deliver employment services in local environments and settings. Jobcentre Plus is well-placed to facilitate outreach provision. There is, however, no overarching strategy to prevent duplication of effort between Jobcentre Plus and the many other bodies, such as Local Authorities and community and voluntary sector organisations, which provide employment support programmes. A joined up strategy could support information sharing, providing local partners with appropriate access to data on locations of worklessness, enhancing the effectiveness of outreach activities. The expanding network of partnerships, such as City Strategy consortia and Local Strategic Partnerships, may improve local coordination, but liaising with these new bodies places further demands on the time of Jobcentre Plus managers.

The current range of employment support programmes has helped those who have participated in them, but the number of people entering work from New Deal programmes is now levelling off or reducing. Only two programmes show a positive return on the cost per participant, defined as the difference between the benefits that flow back to the Exchequer over one year (in benefits saved, and increased tax revenue) and the programme cost per participant. The New Deal for Partners has failed to attract participants. The New Deal for Disabled People and Pathways to Work programmes have found new jobs for disabled people, but neither programme is delivering results for people across the whole spectrum of disability, particularly those with mental health problems. Many people in workless households have multiple barriers to work including skills deficits, disability and caring responsibilities. Early intervention and targeted support are essential for helping them back into work. The Learning and Skills Council has started to fund more basic skills and employability skills courses, but it is too early to measure the impact of this funding.