Docstoc

gregg

Document Sample
gregg Powered By Docstoc
					Centre for Market and
Public Organisation




            Preventing Disconnection:
             Recession and Beyond
                          Paul Gregg

            Public Service Reform Seminar, March 2009
     Recession and Beyond
• Last Two recessions saw open unemp
  peaked at around 3 million (rises of 2 and
  1.5 million from pre- period)
• But rises in inactive IB/IS saw additional
  0.75 and 1 million.
• Total peaked at 6 million in 1993. (2008 - 4
  million)
                                                                     Caseload (thousands)

                                          19




                                                     1,000
                                                             2,000
                                                                         3,000
                                                                                  4,000
                                                                                            5,000
                                                                                                    6,000
                                                                                                            7,000




                                                 0
                                            79
                                          19
                                            80
                                          19
                                            81
                                          19
                                            82
                                          19
                                            83
                                          19
                                            84
                                          19
                                            85
                                          19
                                            86
                                          19
                                            87
                                          19
                                            88
                                          19
                                            89




Unemployment benefits
                                          19
                                            90
                                          19
                                            91
                                          19
                                            92
                                          19
                                            93
                                          19
                                            94




                                   Year
                                          19
                                            95
                                          19
                                            96
                                          19
                                            97


Sickness and disability benefits
                                          19
                                            98
                                          19
                                            99
                                          20
                                            00
                                          20
                                            01
                                          20
                                            02
                                          20
Lone parent benefits




                                            03
                                          20
                                            04
                                          20
                                            05
                                          20
                                            06
                                                                                                                    Numbers on Major Benefits




                                          20
                                            07
                                          20
                                            08
                        Spending on Major Benefits/tax
                                   credits
                  6.0




                  5.0




                  4.0
Per cent of GDP




                  3.0




                  2.0




                  1.0




                  0.0
                  1978/79           1982/83        1986/87        1990/91               1994/95         1998/99          2002/03       2006/07
                                                                                 Year


                            Unemployment benefit     Income Support         Sickness and disabilty benefits       Housing benefit   Tax credits
                     Scarring
• In 1981 recession – Men under 23 experiencing 12+
  months out of work spent another 30 months not in work
  (18 unemp, 22 non-employed) – compared to 6 months
  for those 1-6 months unemp
• About ½ of this gap is causal rather than due top
  characteristics (Gregg 2001)
• Those in work have long lasting wage penalties –
  through reduced access to long-tenured jobs/career
  development
• Also evidence of health impact (mental and physical)
  from long-term worklessness
• Drift onto IB draws disproportionately on LTU
                  Scarring
• Unlike open unemp rises in active benefits were
  not reversed (actually rose continually from 1979
  to 1998 IS – 2003 IB).
• 4 Problems
  – Initial barriers to employment - Until recently
      no support
  - Long-dependency – which has damaging
  effects
  - No institutional engagement structure
  - Poor work incentives
        Strategy 2009-2012
1. Reduce disconnection from work during
   recession
2. Prevent build up/concentration of Unemp
   on a small minority
3. Reduce drift on to less active benefits
4. Keep people engaged and supported on
   all benefits
1. Reduce disconnection from work
        during recession
About Recession will take 5% off GDP – Emp
    down 0.5% so far, 4.5% to come ≈ 1.5m Jobs
•   Suspend collection of employer NICs for 6
    months but reclaim from late 2010
•   Raise EMA to encourage young adults to stay
    in school
•   Reduce hours limit in tax credits to 16 hours
    for 2 years – encourage part-time working
•   Kick start school rebuilding etc and repair of
    council houses
2. Prevent build up/concentration of
     Unemp on a small minority
•   ½ of all days of male unemployment fall
    on 6% of men
•   Severely damages future work and wages
•   Job Guarantee at 12 months – useful activity
•   20 hours per week and min wage
•   Public and charitable sector
•   Require 20 hours in job search and support
    activities
•   Cost approx. £7bn
    3. Reduce drift on to less active
               benefits
•   Tighter WCA means fewer getting on to
    disability benefits
•   Issue about appropriate support for those no
    longer getting on to the inactive benefits but
    have clear barriers to work
•   Single Working Age Benefit
       4. Keeping people engaged and
           supported on all benefits
• JSA operates a shake out model – STU left
  unsupported till duration reveals problem group.
  Then invests in support etc.
• This is not appropriate for those with clear pre-
  existing barriers – need support straight away,
  not ready for job search conditionality and timing
  uncertain

• So We Need Another Approach
        4. Keeping people engaged and
              supported on all benefits
• LTU and Lone Ps/Sick disabled and some others all
  suffer significant barriers for a return to work – prob.
  Less for LTU than others.
• Job Search Conditionality increases entry into work for
  job ready – McVicar (2008), Manning (2001).
• But evidence for those less job ready is more worrying –
  Blank (2008) highlights how 20% of lone mothers are not
  in work or on welfare. Petrongolo (2005) – how JSA
  oushed some onto IB.

• So We Need Another Approach
         Keeping people engaged and
           supported on all benefits
• Dutch Individual Re-Integration Accounts -IROs.
• Offer claimant voice in designing welfare support
  package – co-ownership
• Highly Flexible and Persionalised in range of
  support offered – akin to Personalised Budgets
  in Social Services.
• Agreed Plan becomes conditional
• Popular with claimants, reduced
  conflict/sanctioning, good outcomes.

• Is this the other Approach
                               Work Ready Group
                                   Flexible New Deal
                                      12+ months

              Fast track          Supported Jobsearch
                                     6 – 9 months

                                        Directed
                                       Jobsearch
                                       3-6 months
Destination
                                        Self-help
 based on
  Client
                                          0-3
                                        months               Work
  Group
                           Progression to Work Group
                                      WFIs
                                   Action Plans
                              Work Related Activity

                             Time to Jobsearch is variable




                            No Conditionality Group

                                     Full Support
             Who is in each group?
Work-Ready group
• JSA claimants
• Lone parents and partners with youngest child aged 7 and
  over
• Disadvantaged groups

Progression to Work group
• ESA claimants
• Lone parents and partners with youngest child aged 1-7

No Conditionality group
• ESA Support Group
• Carers
• Lone parents and partners with youngest child aged under 1
       A new concept: Progression to
               Work group
• Everyone moving towards job search in a flexible co-owned
  route back to work within a personalised timeline

• Adviser/claimant relationship is central

• Tailored to their capability and built around their
  circumstances

• Work Focused Interviews, Action Plans and Work Related
  Activity are fundamental – no required job search if not in plan

• Links up with effective support

• No requirement to take specific jobs
   Wider and Longer-run Issues I

• Adviser Flexibility

• Incentives to Overcome Parking

• Single Working Age Benefit

• Rule Over-ride
  Wider and Longer-run Issues II

• Mobility- Retention and Advancement

• Wider objectives – e.g. homeless,
  dependence, family support etc.

• Contracting models – advocacy, lead
  professional, personalised budgets

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:9
posted:11/1/2011
language:English
pages:18