Jobcentre must be incentivised to get people into work

• Report: The role of Jobcentre Plus in the reformed welfare system
• Report: The role of Jobcentre Plus in the reformed welfare system (PDF 2.6MB)
• Inquiry: The role of Jobcentre Plus in the reformed welfare system
• Work and Pensions Committee

Commenting on the Report, Dame Anne Begg MP, Chair of the Work and Pensions Committee, said:

"People can leave benefit for a range of reasons, not all of them positive. JCP’s performance is currently measured primarily by the proportion of claimants leaving benefit by specific points in their claims. This takes no account of whether they are leaving benefit to start a job or for less positive reasons, including being sanctioned or simply transferring to another benefit. We believe this risks JCP hitting its targets but missing the point. JCP must be very clearly incentivised to get people into work, not just off benefits."

The Report further recommends that JCP conduct a more thorough initial assessment of claimants’ barriers to employment in order to better identify the level of employment support required. DWP should work to establish a jobseeker classification tool to allocate claimants to separate work streams, ensuring that those facing the greatest challenges receive the most support.  

Dame Anne Begg MP said:

"The processes by which JCP currently establishes claimants’ needs are haphazard and prone to missing crucial information about a person’s barriers to working, including homelessness and drug dependency.  A more thorough and systematic approach to assessing claimants’ needs is required."

The Report makes a number of other conclusions and recommendations.

Sanctions

Evidence suggests that JCP staff have referred many claimants for a sanction inappropriately or in circumstances in which common sense would dictate that discretion should have been applied. A limited independent review of sanctioning has been established by DWP. The Committee recommends that there should be a separate, broader independent review of the operation of benefit conditionality and sanctioning to ensure that the rules are being applied fairly and appropriately. This review should also investigate whether, and to what extent, sanctioning is having the desired effect of encouraging claimants to engage more actively in job-seeking. 

Some witnesses were concerned that financial hardship caused by sanctioning was a significant factor in a recent rise in referrals to food aid. The Report recommends that DWP take urgent steps to monitor the extent of financial hardship caused by sanctions.  These should include collecting and publishing data on the number of claimants "signposted" to food aid by JCP and the reasons why these claimants were in need of assistance. 

Dame Anne Begg MP said:

"An unprecedented number of claimants were sanctioned in the year to June 2013. Whilst conditionality is a necessary part of the benefit system, jobseekers need to have confidence that the sanctioning regime is being applied appropriately, fairly and proportionately and the Government needs to assure itself that sanctioning is achieving its intended objective of incentivising people to seek work."

Balancing conditionality with effective employment support

JCP needs to do more to balance the increasingly strict benefit conditionality rules with effective, in-depth employment support for those claimants who need it. This should include addressing as a matter of urgency the unacceptably high ratio of Employment and Support Allowance (ESA) claimants to specialist JCP Disability Employment Advisers (DEAs)—currently over 600 ESA claimants to each DEA. 

Dame Anne Begg MP said:

"Increasingly strict conditionality must be accompanied by more in-depth and effective advice and support for people struggling to find work, particularly those facing real barriers to employment, including health conditions and disabilities."

Resourcing of jobcentres in the medium term

DWP is required under the 2013 Spending Round to further reduce its running costs. At the same time Jobcentres are being required to implement changes that could substantially increase their workload.  These include

• Weekly signing on for "half of all jobseekers"
• Daily signing on for a third of claimants returning to JCP from the Work Programme, and
• The introduction of an "in-work conditionality" regime under Universal Credit, widely expected to apply to over 1 million low paid Universal Credit claimants.

There is a lack of transparency around DWP’s assessment of the likely impacts of these changes, in particular the impacts on the numbers of people attending Jobcentres and the resulting workload. It is not currently possible to assess, from any regularly published information, whether JCP will be sufficiently resourced to deliver the range of policy changes and at the same time offer effective employment support.

Dame Anne Begg said:

"The Government has no clear idea about how working with both employed and unemployed claimants will affect demand on Jobcentres because it has not yet formulated plans to deliver its ‘in-work conditionality regime’. It must address this as a priority.

"The Government must also be clearer about how it will ensure that Jobcentres are sufficiently resourced to deliver recent and planned policy changes, including more intensive signing on regimes."

Further information

• The Committee undertook an inquiry into the effectiveness of JCP in the light of a number of current and planned reforms and policy changes.
  
• Universal Credit is merging and replacing six benefits and tax credits. The Government’s aim is to create a system by which both working and non-working claimants will receive a single benefit payment, which will decrease as a claimant’s earnings increase. National implementation of Universal Credit was originally intended to begin in October 2013 and be completed in 2017. The roll out has been scaled back considerably—it will be delivered in only 10 of JCP’s 719 Jobcentres in 2014. DWP’s "working assumption" is that national implementation will begin in 2016. The expectation now is that the large majority of claimants will be claiming the new benefit in 2017.
  
• A new Claimant Commitment is being introduced in Jobcentres. It will replace the Jobseekers Agreement across the Jobcentre network by Spring 2014. The Claimant Commitment has been designed to set out more clearly the specific job-seeking actions claimants must undertake to meet the conditions of continued receipt of benefit. The Claimant Commitment gives DWP the power to require unemployed claimants to spend 35 hours per week looking for work.
  
• DWP is formulating plans for Jobcentre Plus to implement "in-work conditionality", under which Universal Credit claimants can be required to take steps to increase their earnings to the equivalent of 35 hours per week at the National Minimum Wage.