Public works programmes

1. Public works programmes A European Perspective Franz POINTNER DG Employment, Social Affairs and Equal Opportunities Monitoring of Corresponding National Policies in the United Kingdom, Ireland, Latvia Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

2. Public Works Programmes • Public Works Programme, Direct Job Creation, Community Employment, Workplaces with Stipend Programme, Local Employment Emergency Programme, … • Different names for programmes which are primarily • about income transfer, • removing people from social assistance benefits and replacing this with a form of subsidised employment. • Provide temporary employment opportunities for long-term unemployed and socially excluded people • Have a community benefit factor • Contribute to local strategies • … Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

3. Public Works Programmes – the European perspective • Legislation: • No European legislation regulating the design or • implementation of Public Work Programms •  national policies, legislation, and practices •  Public works programmes have been used for a long time as a labour market instrument in European countries, often been financed by the European Social Fund (ESF) • Examples: IE, SI, LV, Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

4. Public Works Programmes – the European perspective • Report to the 18-19 June 2009 European Councilon EERP measures • “It is important to remain vigilant that those measures in the area of the labour market that do not contribute to structural growth (such as public employment schemes and measures that decrease incentives to work) are reversed.” • DG ECFIN position[1] on the Developing operational "rules of thumb" for the timing for withdrawing crisis support states that: • “In labour markets the main risk for the medium term is to keep people employed for too long in activities that need to shrink as part of the post crisis structural adjustment process and in reducing the incentives for taking up work. “ • Exit strategies for the real economy: guiding principles for the withdrawal of temporary crisis support measures in labour and product markets[2] • Temporary labour market measures should be maintained until a sustainable recovery is secured, but once this is attained they should be gradually removed as they could carry a significant economic cost in the medium term. • … gradual phasing out of temporary working time reduction schemes should be accompanied by a strengthening, where necessary, of activation and training policies that favour job reallocation and workers' re-skilling... • [1] Exit strategies for the real economy: guiding principles for the withdrawal of temporary crisis support measures in labour and product markets • [2] Note to the Economic and Financial Committee and the Economic Policy Committee in view of the ECOFIN meeting of 16 March 2010) Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

5. Public Works Programmes – European Examples: Latvia • Latvia • Local Employment Emergency Programme • (“100-Lats-Programme”) • Project description: • The programme is part of the Social Safety Net Strategy and targeted at unemployed people who do not receive unemployment benefits. They get a LVL 100 grant for a limited period (2 weeks - 6 months) for participating in a full-time work programme with a local authority. Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

6. Income Support/ Public works • Workplaces with Stipend (WWS) Public works programme • 16 543 787 LVL (including additional 3 Mio. LVL from the state budget) for 2010 (31 500 – planned inflow of participants in 2010) • By End 2009 – 16 830 workplaces created, 19 300 (of whom 9087 women) unemployed having started participation, 1 363 997 person days (45 466 person months) of participation • 47 295 unemployed waiting for participation (on 8 March 2010) Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

7. Income Support/ Public works Data source: State Employment Agency Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

8. Income Support/ Public works Data source: State Employment Agency Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

9. Income Support/ Public works Data source: State Employment Agency Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

10. Income Support/ Public works • Results of the programme (by End November 2009 – provisional (46 municipalities have not quantified the results): • Cleaning and improvement of municipal territories (2301 ha) • Garbage collected (2358 m3) • Roads and streets cleaned (1617 km, 35,4 ha) • Graveyard territories put in order (242 ha) • Repair works inside buildings (13452 m2) • Removal of construction and demolition waste (267 t) Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

11. Income Support/ Public works • Results of the programme (by End November 2009 – provisional and approximate (46 municipalities have not quantified the results yet)) • Digging of tranches (2390 m) • Firewood prepared (14 214 m3) • Auxiliary work in the social care area (number of people having got assistance - 1955) • Cleaning of municipal and NGO premises (66775 m2) • Auxiliary work in schools and kinder gardens (number of children having been looked after - 895) • Cleaning of the state border zone (16,9 km) Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

12. Income Support/ Public works Data source: State Employment Agency Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

13. Income Support/ Public works • Out of 19 300 persons having started participation (by 31st December 2009) 2033 persons had interrupted and 1148 had finished participation Data source: State Employment Agency Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

14. Income Support/ Public works Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

15. Public Works Programmes – European Examples: Ireland 1 • Ireland • 1984: Social Employment Scheme (SES) • more a measure to combat social exclusion than to achieve employment re-entry • 1991: Community Employment Development Programme (CEDP) • New improved design (24000 participants/yr) • focused on long-term unemployed, stronger labour market aspect • Since1994: Community Employment (CE) • once accounted for 40,000 participants (3% of LM) but now reduced to 20,000 (1%) – numbers have been increased slightly in last 2 years as part of response to crisis. Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

16. Public Works Programmes – European Examples: Ireland 2 • Participation is voluntary and applications are made through FAS. • In 1996 it accounted for 45% of ALMP expenditure. In 2009 it accounted for €380 million out of FAS budget on ALMPS of €835 million (this does not include exp. On ALMPS by other Department such as Education). • Jobs are mainly in non-market sector, largely community projects, social services such as healthcare, arts, culture, sport and education, childcare. • Participants receive a 'wage'. For the unemployed this replaces benefit but for lone parents and the disabled, this can be in addition to benefits. • While reducing the number of places, health sector places, child-care, and drugs task force client places have been ring-fenced (27% of places) while general eligibility rules have been tightened. Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

17. Public Works Programmes – European Examples: Ireland 3 • Those under 35 limited to 'integration' option , which in theory means participation for 1 year only – which should be followed by regular employment, education or training. In general, participation is capped at 3 years, although those aged over 55 may participate for 6 years and can be 4 years for other groups such as disabled. • The proportion of unemployed participating fell from 62% to 40% between 1998 and 2007, the number of lone parents remained static around 25% while the proportion of disabled increased from 7% to 23%. • Participants now have an Individual Learner Plan (ILP) which identifies specific training needs and provides access to training through FAS. Also basic literacy services given to those in need. • Scheme now in effect operates as providing essential social and community services and also as an alternative to regular employment for those with reduced earnings capacity – even though it was always intended as a training and employment programme. Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

18. Public Works Programmes – European Examples: Ireland 4 • Low progression to regular employment – only 30% in 2005 in employment after 19 months. 30% on another CE or job programme and only 6% in education or training. • Indicates that CE is an alternative to regular employment rather than a facilitator. This applies especially for disadvantaged groups such as older workers, disabled and lone-parents. Because the latter 2 groups can keep benefits and a wage, it is financially very attractive and can provide a disincentive effect. • Transition to employment, training or education are lower in general for CE than other ALMPs while unemployment after 19 months is also high. Traineeships, specific skills training have highest outcomes (72% in employment for traineeships). • educational background of participants must be taken into account: 37% of CE participants had only primary level education, compared to 5% for traineeship participants. • CE was successful at providing an alternative to long-term benefit dependency and providing local services that would otherwise be lacking. • CE now functions for some as low-paid public sector employment, sheltered employment (for the disabled), or a form of active early retirement. Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

19. Public Works Programmes – some general observations • job creation measures should be counter-cyclical; • duration of participation should be as short as possible. • Job-creation measures can absorb part of a short-term cyclical increase in unemployment but involves longer-term risk that subsidies prevent the reallocation of labour according to market forces. • For most participants, must be a focus on achieving a transition to unsubsidised work. • Programmes that create full-time jobs paying an ordinary wage are extremely expensive, have low exit rates to unsubsidised work and are subject to political pressure to make the jobs permanent, thus closing of opportunities for new entrants and ceasing their role as ALMPs. Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2

20. Public Works Programmes • Sources: • European policy papers, Operational Programmes (OPs), Evaluations of OPs • OECD Employment Outlook 2005 – Chapter 5, Labour Market Programmes and Activation Strategies – Evaluating the Impacts • Review of Activation Policies in Ireland – OECD 2009 • Review of ALMPS in Ireland – Indecon International Consultants, 2002 • Carmel Dugan. Work Experience Programmes in IE: Impact and Potential. Combat Poverty Agency (1999) • Central and Eastern European Online Library. Labour Market Measures: do they reach Roma? (2007) • European Foundation for the iMprovement of Living ans Working Conditions: Low-qualified workers in Europe (2009) • European Employment Observatory. Quarterly Reports • Website of DG Employment: • http://ec.europa.eu/social/home.jsp?langId=en Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit EMPL.B.2