Chapter 26

Cross-Departmental Review of Welfare to Work and ONE

Scope

The cross-departmental review of the Welfare to Work programme sought to find ways of increasing the labour supply by moving as many unemployed people and inactive welfare recipients who can work into jobs and active competition for jobs. It explored options for countering poverty and social exclusion by helping out-of-work benefit recipients facing the most severe disadvantages to compete effectively for jobs.

Background

26.1 Since spring 1997, the number of people in work in the UK has risen by over 1 million and employment is currently at record levels. Despite these successes, there are still 1.1 million unemployed people claiming Jobseeker's Allowance, and a further 3.8 million people of working age receiving other out of work benefits, including sick and disabled people and lone parents.

26.2 Worklessness is the most common cause of poverty among working age people and their children. Moving into employment is the surest route out of poverty. Chapter 3 describes the framework underpinning the Government's approach to delivering employment opportunity for all. The Spending Review provides for a continuation and enhancement of policies to help people move from welfare to work.

Outcomes

26.3 The Government's long term economic ambition is that by the end of the decade there will be a higher percentage of people in employment than ever before. A target for the next three years is therefore to secure growth in the number of people in employment taking account of the economic cycle.

26.4 The Government is determined to build on the success of the New Deal, which has already helped 216,000 young people into work, well on the way to the target of 250,000. To help achieve the Government's objective of securing employment opportunities for all, the New Deal will become a permanent deal. A new Employment Opportunities Fund will be created to fund the New Deal, associated employment programmes, the ONE service and the establishment costs of the working age agency after the Windfall Tax receipts are spent.

The ONE service

26.5 The ONE service is the Government's integrated approach to benefits and employment advice for people of working age. The ONE service includes work-focused interviews for new benefit claimants, backed up by a personal adviser service to help people into work. ONE is currently operating in 12 pilot areas and, learning from the experience of the pilots, the Government intends a substantial expansion of the ONE service. This will represent a fundamental change, creating a new culture which puts work first.

26.6 The ONE service will be delivered by the new working age agency, building upon the current partnership approach to working with the private and voluntary sectors. The new agency will be established during 2001, bringing together the Employment Service and those elements of the Benefit Agency which support people of working age.

Enhanced New Deal 25 plus

26.7 The Budget set out plans to intensify and extend the New Deal for 25 plus on a national basis from April 2001 - along the lines of the New Deal for 18-24s - incorporating lessons learned from the New Deal 25 plus pilots. The enhanced New Deal 25 plus will provide a step change in provision for those people over 25 who have been unemployed for 18 months, heralding a strong emphasis on rights and responsibilities. This is part of a wider package of provision for people aged over 25. From six months of unemployment, there will be a staged increase in provision and support culminating in the enhanced New Deal 25 plus.

Helping disabled people into work

26.8 The national extension of the New Deal for Disabled People will be exploratory, continuing to test different ways of helping disabled people into work. The service will be fully evaluated to ensure that the Government continues to develop policies that are most effective in helping disabled people.

26.9 The Government will also take action to help people when they first become sick at work, before they lose touch with their jobs and with the labour market. Job retention and rehabilitation pilots will compare the effectiveness of different types of assistance to people who are off work because of sickness. The pilots will evaluate what assistance is most effective across a range of measures, including jobs, earnings and future health.

Employment Opportunities Fund

26.10 The Employment Opportunities Fund will fund New Deal employment programmes, the ONE service, the costs of establishing working age agency and associated programmes. There remains an unallocated element within the Fund. This will allow the Government to provide additional funds for those areas where policy is still developing as evidence emerges over the next three years, and allow for continuous improvement of existing programmes.

Childcare

26.11 Childcare is an essential element of the Government's employment strategy, ensuring that parents have genuine opportunities to work. Building on the success of the National Childcare Strategy, the Government will provide additional support in areas where the childcare market faces barriers to development. This will be achieved by focusing significant new funds on helping childcare providers - both private and voluntary sector - to set up in these areas.

26.12 This review provides additional funding to support the expansion in childcare provision. This includes new funds to kick-start provision in disadvantaged areas and provide grants and support for new childminders. In addition, there is a business support package, to encourage the emergence and development of childcare businesses.

Box 26.1: Key PSA targets - Welfare to Work

Increase employment over the economic cycle.
A continued reduction in the number of unemployed people over the age of 18 over the three years to 2004, taking account of the economic cycle.
Reduce the number of children in households with no one in work over the three years to 2004.
Over the three years to 2004, increase the employment rates of disadvantaged areas and groups, taking account of the economic cycle - people with disabilities, lone parents, ethnic minorities and the over 50s, the 30 local authority districts with the poorest initial labour market position - and reduce the difference between their employment rates and the overall rate.

Spending plans

26.13 Spending plans for the Employment Opportunities Fund are set out in Table 26.1. This is additional to resources allocated to Welfare to Work within the Department for Education and Employment and Department for Social Security DELs.

Table 26.1: Key figures

£ million
	2000-01	2001-02	2002-03	2003-04
Employment Opportunities Fund DEL*	873	875	854	1371
Expected Windfall Tax carry over from previous years**	0	175	545	0
Expected total resources available to the Employment Opportunities Fund	873	1050	1399	1371
Of which
Expected to be funded by the Windfall Tax**	873	1050	670	0
Non-Windfall Tax**	0	0	729	1371

* Departmental Expenditure Limit. This includes programmes funded from the Windfall Tax including non-Welfare to Work programmes (of £24m in 2000-01, and £6m in 2001-02 and 2002-03) but excludes New Deal for Schools.
** These are based on current estimates of expenditure on programmes financed by the Windfall Tax.