The UK Government is to slash funding for contracted-out employment support by up to 80%, according to the Centre for Economic and Social Inclusion (CESI).
Meeting the Government’s goal of halving the employment gap between disabled and non-disabled workers – moving around one million more disabled people into work – could now become a much more difficult task.
Contrary to Iain Duncan Smith’s ideological positioning, most people who don’t work are unable to do so because of genuine barriers to employment – such as incapacitating illnesses or disabilities.
In a speech in August about work, health and disability, Duncan Smith says: “Let’s take the Work Programme. The Work Programme is, I believe, the most successful back to work programme we’ve ever seen.
He claimed that by March of this year:
- over 1 million people – or 70% of all referrals – had spent some time off benefit;
- and over 430,000 people had moved into lasting employment.
However, this somewhat glossy look at the Work Programme isn’t widely supported among MPs. Last year, the Public Accounts Committee denounced the failure of Work Programme providers to target more help on the most difficult cases as a “scandal”.
Almost 90 per cent of claimants on Employment and Support Allowance, which is paid to sick and disabled people, and whom have gone through the Work Programme, have not found long-lasting employment.
The government is now cutting funding for contracted-out employment support by 80% following the Spending Review. The Department for Work and Pensions has indicated that total spending on employment support programmes will be reduced, including not renewing Mandatory Work Activity and Community Work Placements.
Its replacement, the new Work and Health Programme, will have funding of around £130 million a year – only around 20% of the current level of funding for the unsuccessful Work Programme and Work Choice, which are both set to be replaced.
The government is introducing a number of policy initiatives aimed at reducing the number of people claiming Employment and Support Allowance (ESA). This is the social security benefit for people with long-term health conditions or disabilities. However, these ‘initiatives’ are only at a research and trialing stage.
Iain Duncan Smith says: “This Spending Review will see the start of genuine integration between the health and work sectors, with a renewed focus on supporting people with health conditions and disabilities return to and remain in work.
“We will increase spending in this area, expanding Access to Work and Fit for Work, and investing in the Health and Work Innovation Fund and the new Work and Health Programme.”
At the Employment Related Services Association (ERSA) annual conference on Tuesday, Employment Minister Priti Patel said: “Funding for employment support will remain broadly stable” following the Spending Review.
This will include funding for extending conditionality to more claimants under Universal Credit, and increased investment in Jobcentre Plus “support.” There is also an announcement of an increase in Access to Work spending.
However, Patel’s speech, despite the title, is mostly pitched at meeting labour market conditions and employer’s needs and not the needs of employees.
Ministers confirmed that the contracted-out element – the new Work and Health Programme – would receive around £130 million per year.
The Centre for Economic and Social Inclusion estimates that Work Programme expenditure is between £500 and £600 million per year, with funding for the last twelve months estimated to be around £530 million (pages 20-22 of this briefing). The total Work Choice expenditure to 31 December 2013 is £257.6 million.
CESI Director of Policy and Research Tony Wilson said: “These huge reductions in funding for contracted employment support will have impacts both on the scale and the breadth of the new Work and Health Programme.
“With just half of disabled people and those with health conditions in work, we have long argued that we need to do more and do it better.
“However this new programme now appears to be doing the same or even less.”
“This must cast doubt on the extent to which specialist employment support can make a meaningful contribution to the government’s manifesto commitment to halve the gap in employment rates between disabled people and the wider population.
“And it will also have significant implications for those providers that have delivered the Work Programme and Work Choice.
“We would urge the government to look again at this, and at the case for funding more support through the additional savings of supporting disabled people and those with health conditions back into work.”
The Scottish Cabinet Secretary for Fair Work, Skills and Training, Roseanna Cunningham, has written to the Work and Pensions Secretary Iain Duncan Smith, with concerns over how the Spending Review will impact on unemployed Scottish people.
The changes announced will deliver a significant cut to funding for newly devolved services and therefore limit what Scotland is able to deliver, the Scottish Government claims.
In line with the Smith Commission recommendations, the Work Programme and Work Choice were to be devolved in less than 18 months.
The Scottish Government carried out a public consultation over the summer about the employability support services that people in Scotland want, and how they could help those “furthest from the labour market.”
Ms Cunningham said: “The Work Programme as it stands is not fit for a modern Scotland. After hearing from those who use these service, communities, businesses, training providers and the trade unions, we now know what we want to provide.
“However, our ability to deliver this has been significantly impacted by poorly thought through Westminster policy proposals that have not been brought to our attention in an acceptable fashion.
“We estimate DWP intends to cut its spend on Scottish programmes to be devolved by around £40 million annually – around 75 per cent. This undermines the agreed intentions in Smith and comes on top of existing limitations in powers being devolved.
“It is our view that the Smith Commission envisaged the Scottish Government having greater influence over these issues from April 2017 and this cut diminishes their recommendations to an unacceptable level.
“The UK proposals will magnify the challenge of helping those further from the labour market into work. The prospect of an even more intensive use of sanctions will magnify the already disproportionate impact on young people and those with disabilities in Scotland who are subject to sanctions by JobCentre Plus.
“I have today written to the UK Work and Pensions Secretary seeking an explanation on the implications of the UK Spending Review announcements for Scotland and have demanded an urgent meeting of the Joint Ministerial Working Group on Welfare to discuss the issue.
“The clarity needed to procure services has also not been forthcoming from DWP with a number of information requests by the Scottish Government remaining unanswered after several months.
“The lack of information on this vital issue is unacceptable and this latest move will have serious implications on both unemployed people in Scotland and the support they require.”