September 4, 2012

Welfare Reform 2.0: Long-term solutions, not short-term savings

Welfare Reform 2.0 says politicians need to be more honest about how successful JobCentre Plus is at reducing the number of people claiming benefits. While they talk of 75% of all benefit claimants moving off JSA within six months, in fact, less than half of claimants will enter paid employment of over 16 hours. 30% of claimants leaving JSA are back on benefits again within eight months.

Although 1.4million part time workers said they wanted full time employment but couldn’t find it, less than a third of them – 420,000 – are actively looking for another job with longer hours. This situation is also likely to get worse as the Government’s welfare reforms will mean that those working very few hours will get paid more benefits.

Work Programme providers have a payment system that is based on getting people into long term employment. If Jobcentre Plus were paid on the same basis, they would be unlikely receive significant payments for the vast majority of claimants going through their offices. To recognise this, the report recommends that jobcentres are measured on the success they have in getting people to enter and stay in work – not just moving people off benefits.

It also suggests that we should expect more of those claiming benefits. The public’s attitude towards welfare has toughened over the past few years. A poll for Policy Exchange found that 21% of the public thought that claimants should lose all of their benefits regardless of the hardship it would cause if they failed to comply with their jobseekers agreement.

The report recommends that the government should withdraw benefits from part time and temporary workers who are not doing all they can to find a higher paid or full time job.

  • Part time workers claiming Universal Credit should face a stronger conditionality regime than present until they are earning the equivalent of 40 hours at the National Minimum Wage. This should be introduced as soon as Universal Credit begins to be rolled out. Part-time employees claiming Universal Credit could be required to provide Jobcentre Plus with evidence to show that they are seeking longer hours, higher pay or higher paid jobs. They should be required to set out steps they will take to achieve these goals. Failure to do so should lead to a benefit sanction.
  • Conditionality should also apply to employees in fixed-term or temporary contracts. This could mean that a meeting with a Personal Adviser could be arranged at an appropriate time, including evenings or at the weekend in the month before their position was due to end. This meeting would provide advice and support and outline steps the individual should make to find further work and avoiding a move back onto benefits. If this meeting was not attended or the steps outlined not undertaken, eligibility to elements of Universal Credit based on unemployment would be delayed or sanctioned if the individual moved back on to benefits.


“Under Universal Credit the standard thinking of Job Centre Plus of getting someone into any job is no longer adequate. We need to start assessing job quality in terms of hours, pay and sustainability when designing performance targets for welfare to work programmes.”
Professor Paul Gregg, former adviser to the Treasury under Gordon Brown


Matthew Oakley

Head of Economics & Social Policy, 2011-2013

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