Universal Credit: time’s up

There have been several statistical announcements in the course of the last week, generally missed because of the budget.  One set is concerned with the Work Programme.  70% of claimants who have been through the Work Programme return to  Jobcentre Plus.  The figures for claimants who have found and retained work have increased to 25%; but the figure for comparison is that 26% of the claimants on the previous scheme, the Flexible New Deal, did so.   This graph seems particularly revealing.  The dotted line shows what might be expected if nothing at all was done.  The Work Programme has done no better.


WP outcomes

Iain Duncan Smith has announced, characteristically, that his critics have been proved wrong.  “This isn’t just about numbers.”  Quite.

Another set of figures released on Wednesday tells us that there are now 40,100 claimants of Universal Credit (the figure is dated 12th February).  I pointed out in January that as 80% of jobless claimants return to work within a year, it wasn’t possible to enrol enough UC claimants to make the scheme irreversible before May.   The cheapest and simplest option for any new government will be to scrap it.





The PAC criticises the Work Programme

The Public Accounts Committee has been reviewing the operation of the Work Programme.  The tone of report is muted – 9 of the 14 members are government supporters – but looking at what they say selectively, there are some strong criticisms nevertheless.  These are all quotations from the report:

Performance  for  people  who  have  completed  the  full  two  years  on  the  Work Programme  has  been  similar  to  previous  welfare-to-work  schemes. (para 1)

The  measurements chosen by the Department distort real performance.  (para 14)

There  is no clear  relationship  between  payment  groups  and  the  nature  of  the  support participants  receive. (para 7)

Data  prime contractors …  are,  on average,  spending  less  than  half  what  they  originally  intended  on  harder-to-help groups. (para 12)

Differential payments have not been effective in preventing contractors from focusing on easier-to-help claimants and parking the harder-to-help clients.(para 7)

Almost  90%  of  Employment  and  Support Allowance claimants on the Work programme have not moved into employment. (para 8)

The number of sanctions  was  increasing …  (para 13)

Previous attempts to develop ‘welfare into work’ programmes suffered from a range of problems. The most obvious was that once contractors commissioned sub-contractors, the government, as principal, lost control of what the programmes were doing. The same has happened again. This time, the DWP told us, no-one would get paid if they didn’t deliver results, but they haven’t, and they are being paid nevertheless.

There is another problem, however, which is more basic.  The reason why welfare to work, and Pathways, and the Work Programme have all failed is that they’ve been trying to do the wrong things in the wrong way. Look, for example, at the lamentable results for ESA claimants, less than half the initial target figures. The reason that ESA claimants don’t move to work is straightforward: they’re too sick. They get ESA because it’s “not reasonable” to expect them to work – that is what the statute says, and the reason they qualified for the benefit in the first place. So it’s not altogether surprising if some sub-contractors have found it’s more practical to get people off their hands by sanctioning them.

The Oakley report on sanctions

Few commentators had any great hopes of the Oakley review on sanctions, but the report has been welcomed in the press, because it does have some (fairly muted) criticism of the operation of the system.  Oakley’s main concerns are whether the sanctions are clearly communicated and understood; unsurprisingly, they’re not.

Beyond that, however, Oakley  was asked to consider the process of sanctions for people referred to mandatory work schemes.  “The Review … was tasked with assessing and making recommendations around how the process of benefit sanctions functions in these circumstances, and how well claimants understand the system.”  There is something on the second part of that, but there is hardly any consideration of the operational process, which begins with  “making decisions and allowing good reason”.  There is a count of the number of decisions, but no consideration of the integrity, quality or operation of that process.  To my mind, then, the report’s focus falls short even of its very limited remit.

New Work Programme stats

A new set of Work Programme Statistics have been released, with rather more detail than the figures I was considering last week.   They show that

  • 1.5 million people have been referred to the Work Programme
  • nearly 300,000, one fifth, have been the subject of ‘job outcome’ payments
  • just under 75,000 of those who have been the subject of ‘job outcome’ payments also were the subject of the maximum number of sustainment payments
  • over 520,000 have been referred back to JCP at the end of the two year programme.

The figures are difficult to make sense of, because it’s not clear from this how this differs from the return to work that might normally be expected, and so what difference the Work Programme has made.  There are about 1.2 million people on JSA.  Half of them will be gone in six months, two thirds in a year, leaving roughly 400,000.  Another 150,000 or more would normally leave benefit in the next year after that, leaving a fifth.  The Work Programme seems to be doing worse than that – but the point of the Work Programme, of course, is that it’s supposed to pick out the people who are likely to be difficult to place, and besides it includes people on ESA who aren’t up for work, so that’s not a fair comparison.

There are other reasons to doubt that the Work Programme is performing adequately.  A recent IPPR report comments that any apparent gains are flattening out; that the results for people who are most disadvantaged are poor; and that the performance is very uneven.  The problems with the Work Programme seem to me to be much more fundamental.   The most basic problem with the programme is the assumption that the problems of unemployment are essentially down to the behaviours and competencies of the job-seeker, so that they can be corrected by addressing individual circumstances.   If that was true, then prior to this sort of programme unemployed people wouldn’t have found jobs; but overwhelmingly, they did.  The biggest group of people without a job are not job-seekers; they’re people on ESA, with severe restrictions of their capacity.  Very few people who are able to work are continuously unemployed for several years at a time; the numbers are increasing, because the jobs aren’t there, but it’s still less than one in thirty.  It seems likely that the Work Programme is carrying a large proportion of deadweight – services to people who, left to their own devices, would find a job anyway.

‘Welfare reform’ has been driven by an obsessive focus on employment as the basis for a benefit system serving millions.   Most benefits, even for people of working age, have nothing to do with people’s work status.  What most people need when they are unemployed is protection of their income while they’re unemployed.  Some people may also need to develop new skills, but that’s a separate issue.  I commented earlier this week that the Work Programme “ties specialised work support to the receipt of benefits, and ends up serving the needs of neither”.   Even if the Work Programme was able to provide intensive work support – there are doubts as to whether it actually does so in practice – there is precious little evidence to show that such work support is appropriate or useful for a substantial majority of unemployed claimants.

A report on Work Programme statistics

Two years ago, I raised questions with the UK Statistics Authority about the figures that had been released on the Work Programme.  My concerns at the time were that

  • political claims had been made for the success of the Work Programme that could not be scrutinised by outsiders
  • it was not clear what the criteria were for success, and
  • the cohort of ‘early’ service users had been selected.

The current crop of figures,  which has information to the end of 2013, is not much better.  It covers only ‘job outcome payments’,  and doesn’t include information about referral, speed of placement, or sustainment payments.  It also doesn’t refer to sanctions for non-compliance, which David Webster has noted is larger than any other outcome of the Work Programme.

The UKSA has just published its assessment of the Work Programme statistics.  They have been critical of two issues: the incomprehensibility of referring to job outcome payments, and  the misleading press releases about the programme, which they think might undermine confidence in official statistics.


New figures on the Work Programme

The DWP has released a slew of new figures on the Work Programme, taking the story up to March.  The main statistical release is lengthy, and difficult to interpret;  the headline figure is that job outcomes, and outcome payments, have improved to something like 11-13% of referrals, depending on the gloss that’s put on it.  There is helpful coverage from a Financial Times blog.  Some newspapers – who are usually the Government’s supporters – have been fairly scathing: the Daily Mail complains that this has costed £40,000 a job,  the Telegraph that this has been worse than doing nothing.

There is also an informative (and shorter) Excel spreadsheet which lists the actual numbers of ‘Job Outcome Payments’.  The payments fall due when a claimant has been in work for 3 or 6 months, depending on the category.  In the spreadsheet, it emerges that there have been 139,000 payments.  However, more than 132,000 of them were in three categories: JSA 18 to 24, JSA 25 and over, and JSA early entrants.  The rest – less than 7000 nationally – were mainly on ESA or transferred from Incapacity Benefit.

The progress relating to those groups generally falls below the target figures at which providers get paid.  The longer report explains that while results for year 2 have been better than for year 1, “In this second financial year (April 2012 – March 2013) the contractual performance level for the JSA 18 to 24, JSA 25 and over and ESA new customers Payment Groups were 31.9%, 27.3% and 5.3% respectively. This was against a Minimum Performance Level of 33%, 27.5% and 16.5% for each group respectively.” That might sound as if the programme is coming close to targets, but the situation is worse than that; the figures relating to ESA, including people who have volunteered to be supported into work, show an almost complete failure to make a positive contribution in relation to people who might be considered more difficult to place.

The Work Programme hasn't got any better

The Commons Work and Pensions Committee has just published their report about the Work Programme, and I”ve been talking about it on Good Morning Wales.   There are problems in trying to get information about the way the system works, but those problems were entirely predictable.  The government was warned in previous reports, from the Office for Government Commerce and the National Audit Office, that sub-contracting arrangements made by the DWP lead to a basic loss of control and accountability; their response was to encourage a ‘black box’ where they asked for even less information about the process.

The report raises particular concerns about vulnerable groups who are not receiving support, but the evidence they describe is mainly focused on the mainstream groups, and the position is not good.  The prime contractors have failed to meet their targets, and the Committee argues for the bar to be lowered. The strategy followed by the contractors is not, however, one to be encouraged.  There is little indication of effective systems for individual support; caseworkers have 120-180 cases apiece, and the general approach seems to be that they throw anyone to hand at available jobs in the hope that someone will stick.  There is little involvement of sub-contractors – out of 348 organisations, 74 thought they were not part of the Work Programme and 45 had not yet had any referral.

The system is however saving money.  Part of that is money that the Government had made available for the contracts, which will not be paid; part is the effect of penal sanctions on unemployed people.

Bad news for the Work Programme

Despite a bullish report from the DWP, the Work Programme appears to be failing. This is not a surprise. The Office for Government Commerce had expressed doubts about the DWP’s ability to manage this kind of contract effectively. Comments from the National Audit Office in relation to Pathways to Work suggested that private contractors had not appreciated the difficulty of dealing with the client group, that the effect of out-sourcing and sub-contracting had been to reduce accountability and control, and that Jobcentre Plus actually did the job better. (Hardly anyone, in the DWP’s outcome figures, is coming off ESA and into work.) Jonathan Portes was suggesting six months ago that the Work Programme was appearing to slow down the rate at which people got back to work. That impression seems to be supported by the headline figures, which show that the Work Programme produced worse outcomes than doing nothing.

The failure of the programme rests, not just in its management, but in its basic concept. Improving employability does not, and can not, make jobs; it can only improve the relative position of participants in competition with others. The main way through the problem is to stimulate the demand – by injecting resources into the economy, by commissioning work, or by creating jobs. The government has set its face against all three approaches.

Leaving the Work Programme

It has been announced that one in ten people referred to the Work Programme, 73,260 up to last April, have been subject to sanctions for failing to avail themselves of the opportunities. Or it has not been announced, depending on your point of view, despite the very specific figures and the ministerial comment: the Telegraph explains that this is what “the Department for Work and Pensions (DWP) is expected to confirm next week when it publishes the first official statistics on the overall success of the programme.” If this is an official announcement, it would be another clear breach of the UK Statistics Authority’s Code of Practice.

We know what the Minister Mark Hoban thinks of the figures; he thinks it shows that people are scrounging. “Sadly some people are clearly very determined to avoid having to get job at all.” There are other possibile explanations. It might be, for example, that people think they are better able to find work if they’re not on the programme. It might be that the tens of thousands of people who have been forced to claim JSA instead of incapacity benefits are too sick to work, and now they are being cut off benefits altogether. It might be that people are being sanctioned for not replying to letters. It might be that some have found work – because, despite the propaganda, that’s what most unemployed people do. It might be that people who are being cut off from benefit are being forced into crime or prostitution instead – it’s happened before. We just don’t know, which is why we need the detailed evidence and statistics.

Managing the Work Programme

Some officials working for A4E have been accused of mis-reporting their success in placing claimants in jobs. I have no way of knowing whether the specific allegations of fraud are justified, but this may be a symptom of a more general problem – what happens in a situation where the DWP cannot oversee the outcomes itself. The Office for Government Commerce commented in 2007 that the DWP did not have ”the commercial capacity, the management information or the appropriate organisational structure in place to manage providers and markets successfully.” In relation to the Pathways project, the National Audit Office found that private contractors had underestimated the difficulties of working with the client group, and that the effect of sub-contracts was to limit the control that DWP commissioners were able to exercise over the work. The same problems seem likely to persist in the Work Programme. This is a structural issue.