Centre for Market and Public Organisation
This presentation is the property of its rightful owner.
Sponsored Links
1 / 18

Preventing Disconnection: Recession and Beyond PowerPoint PPT Presentation


  • 56 Views
  • Uploaded on
  • Presentation posted in: General

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)

Download Presentation

Preventing Disconnection: Recession and Beyond

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Preventing disconnection recession and beyond

Centre for Market and Public Organisation

Preventing Disconnection:Recession and Beyond

Paul Gregg

Public Service Reform Seminar, March 2009


Recession and beyond

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)


Numbers on major benefits

Numbers on Major Benefits


Spending on major benefits tax credits

Spending on Major Benefits/tax credits


Scarring

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


Scarring1

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

Strategy 2009-2012

  • Reduce disconnection from work during recession

  • Prevent build up/concentration of Unemp on a small minority

  • Reduce drift on to less active benefits

  • Keep people engaged and supported on all benefits


1 reduce disconnection from work during recession

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

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

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

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 benefits1

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

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


Preventing disconnection recession and beyond

Work Ready Group

Flexible New Deal 12+ months

Fast track

Supported Jobsearch 6 – 9 months

Directed Jobsearch 3-6 months

Destination based on Client Group

Self-help 0-3 months

Work

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

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

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

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

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


  • Login