4.3. Caracterización del mercado local
4.3.4. Feria Agroecológica de la Esperanza-Tabacundo
2007-2008 (% of starts)
EZ25+
SJO
24.0 23.5EZ25+
LJO
18.0 15.0Conversion Rate
75.0 63.8ND25+
SJO
25.7 26.2ND25+
LJO
12.0 12.0Conversion Rate
46.7 45.8NDYP
SJO
42.1 33.1NDYP
LJO
17.0 17.0Conversion Rate
40.4 51.4Source: Adapted from DWP Statistics Hub data600
The programmes with the most in common with the Flexible New Deal, ND25+ and EZ25+were both achieving Starts-13 Week Outcomes of around 25% before the onset of the recession at the end of 2008. The New Deal for Young People, with its 6-month employment subsidy, was achieving outcomes noticeably higher, but this would be expected given the additional incentives and early participation dates.
Concluding Remarks
The chapter has explored the designs and outcomes of the three primary welfare-to-work programmes established under the Labour government. Each programme began with very different structures, however through reforms and changes in emphasis work-first gained more prominence in both latter stages of NDYP and reforms of the New Deal for Long Term Unemployed. Both of these programmes also underwent contracting experiments, where all or part of the programme was delivered by private and voluntary sector organisations, both features common to the later incarnations of Employment Zones.
600
DWP (2011) DWP Tabulation Tool, Research and Statistics, DWP, [online]
188 Evidence from all three programmes showed each enjoying a strong start but gradually the employment outcomes tailed off. The perceived reasons for this, and hence the systemic reform are explored in the next chapter, where the official justifications for reform are provided.
The New Deal for Young People was a large scale and costly labour market intervention, under which the state held the capacity to eliminate long-term youth unemployment by acting as the employer of last resort in the Options Stage. However, while it might technically have eliminated the youth unemployment problem, many found themselves returning to benefits after a short stint in work. Broken but repeated benefit claim is as much a problem for the government as any technical measurement of long-term unemployment.
The New Deal for Long-Term Unemployed went through various waves of reform, and achieved outcomes similar to Employment Zones, with a similar client base. By the end of its 12 year lifespan ND25+ had adopted the Gateway element, and several of the mandatory activities present in the Options stage. However, it had also adopted the strong work-first emphasis present in Employment Zones. Both programmes over time saw private-sector organisations take some or all delivery responsibilities in a number of areas of the UK.
Employment Zones underwent a similar, albeit more rapid evolution, and quickly became a testing ground for the DWP to experiment with contracting out employment services, to test cost-efficiency and build up a market for employment services in the future. In doing so they allowed for contractors to experiment with tailored support for the long-term unemployed by deploying a ‘black box’ approach, rather than the highly regulated delivery expected of the NDYP. The development of each of these policies during their lifetime showed evidence of incrementalism, where programmes were tested, evaluated and adapted gradually to involve more market forces, and a greater emphasis on labour market attachment reinforced by strong and escalating conditionality. Yet, despite these changes, the
189 slow decline of each AMLP’s delivery of sustained employment outcomes signalled a need for reform. The more marked decline of EZ’s would point to the continuation of NDYP/ND25+ style programme, but instead, and in fitting with path dependence, reform followed the Employment Zone model.
The following chapter will examine these reforms, outlining the design of the Flexible New Deal, and showing how many of the features of existing programmes have been adopted to build the programme.
190
CHAPTER 6
The Flexible New Deal: features and outcome potential
The previous chapter explored and analysed the Labour Party’s flagship active labour market
programmes. This chapter now turns to the final round of welfare reform introduced during their last term in office. Specifically, this section will explain the link between past initiatives and the introduction of the Flexible New Deal (FND). As the prime focus of this thesis the logic for and structure of, the Flexible New Deal are examined in detail. The chapter will discuss the arguments for welfare reform, the nature of the reforms as an evolution from past welfare programmes, and the estimated advantages, potential outcomes and risks of this type of active measure. These will subsequently inform the collection and analysis of the primary qualitative and quantitative data used in this thesis.
The Path to the Flexible New Deal and the Rationale for Reform
The academic research offered in the previous chapter outlined that both New Deal for Young People and Employment Zones enjoyed a degree of success. The urgent need for reform of active labour market policy in the UK was not therefore apparent. Nevertheless, by 2005 the Labour government was keen to adjust the existing arrangements, in particular the New Deal programmes. The official rationale for change, outlined by Thomas, is offered as follows:
The labour market has changed
Jobseekers increasingly have more complex barriers to employment
The proportion of young people recorded as leaving NDYP to employment has fallen over recent years
NDYP has been less successful with some ethnic groups, women and jobseekers with low qualifications
NDYP has focused on getting people quickly into work, but job sustainability has become an increasing priority
191 Some people frequently move in and out of unemployment601602
There is evidence in DWP administrative data supporting several of these arguments. In particular graphs 6.1 and 6.2 provided show that both the NDYP and Employment Zones were gradually failing in their ability to place individuals into long-term employment.
Fig 6.1 ALMP 13 Week Outcomes over 10 Years
Source: Adapted from DWP Statistics Hub603
Looking at Figure 6.1, the different welfare to work programmes show similar declining trajectories, with small performance upturns in 2004 and 2007. The ND25+ line is problematic given the quite fundamental changes it underwent in the early 2000s which brought forward participation from 24
601
Thomas, A. (2009) Benchmarking Employment Programmes, (presentation) International Labour Organisation, [online]
http://www.ilo.org/public/english/employment/yen/downloads/events/3lc/3lc-thomas.pdf [accessed 10/10/10 602
For example over the NDYP lifespan over one quarter of those who left the programme immediately returned to the Jobseeker’s Allowance or other benefit programme.
http://83.244.183.180/new_deals/ndyp/live/yp_l_s/i_lvdate/k_newdest/a_stock_r_i_lvdate_c_k_newdest_nov09.html 603
Data sourced from DWP (2010) DWP Statistics Hub [online] http://research.dwp.gov.uk/asd/index.php?page=tabtool
[accessed 10/11/11] 0 10 20 30 40 50 60 70 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Per ce n tage o f Star ts Gai n in g Sh o rt Jo b Ou tc o m e ND25+ NDYP EZs
192 months to 18 months. This general decline in performance was, officially, the main driver of the government’s reform programme, particularly in light of the fact that sustained long-term employment has a considerable impact on future benefit duration, labour market progression, and consequently government expenditure.
In a report reflecting many of the views voiced above, the National Audit Office (NAO) explained that ‘”The work-first” approach has helped many people into work, however there is a need for programmes to be developed to help people stay in work.’604 Using data from the DWP, the NAO showed that the longer the period of the employment an active labour market programme achieves, the greater the net fiscal benefit the programme achieves. For example, if all of the additional job outcomes achieved by the NDYP were to last 3 months, the cost to the Treasury would be £176 million pounds per annum. If these additional jobs lasted 12 months, the cost would be £91 million to the Treasury, but if jobs were sustained for 2 years, the Treasury would gain £30 million pounds in additional tax receipts above the cost of the programmes.605606
Reflecting upon employment programmes data, the Secretary of State for Work and Pensions John Hutton, ordered a review of active labour market provision, citing as his core concern the ‘sustainability of employment.’607 In pursuit of this, Hutton wished for a system to foster innovation in the welfare-to-
work model, and attack a perceived ‘can work – won’t work’ culture, appointing the former investment banker David Freud to conduct the review. The report was commissioned to discover new ways to encourage the jobless back to work, keep them there, and to find ways of encouraging those helping the jobless to do more. Hutton announced three parameters for the review:
604
NAO (2007) Sustainable Employment: Supporting People to Stay in Work and Advance, London, The Stationary Office, p8 605
Ibid, p9 606
The NAO also found that Employment Zones would not achieve a net fiscal position even after 2 years sustainment, consequent of the difficult labour market environment and individual barriers characteristic of the operating areas (see p9). 607
Hutton, J. (2006) cited in Grover, C. (2007) The Freud Report on the Future of Welfare to Work: Some critical reflections,