Saturday, April 12, 2008

Job Brokers



As we know, there are currently 2.7m people on Incapacity Benefit (IB). And altogether we currently spend some £26bn pa on incapacity, disability and injury benefits (eg see this blog). That's an awful lot of welfare dependency.

But the good news is that according to the government, 1m of the recipients actually want to work. Which is handy, because that's also what the Major wants, it's what the red tops want, and it's what the vast majority of working taxpayers want. So the government has pledged to make everyone's dreams come true.

Ah, but how? Talk is easy, but how do you actually do it?

One idea is to jolly well make it harder to get onto IB. Which is why from this coming October, instead of wandering along to see kindly old Doc Crippen and getting a sick note, people wanting to receive IB will have to see an officer from the State Arbeit Commissariat. And unlike your untrained hopelessly gullible family GP, this will be "a trained doctor or nurse" who will focus on "what you can do, and not just what you cannot".

If you're unable to convince the officers that you're fully incapable, you will be passed fit for work. Which will mean your benefits are made conditional on your active pursuit of paid employment, just like Job Seekers' Allowance. And to make sure minds are suitably concentrated, backsliders and malingerers will be shot!

Tough, or what?

Except of course, for the pesky details.

For one thing, the government has already backed off its original Hard Talk about applying this to all IB claimants, and will now only apply it to new claimants from October.

Then again, it isn't at all clear how these "trained doctors and nurses" will actually sort the malingerers from the genuinely incapacitated. Let's remind ourself of what incapacities IB claimants actually have (chart from Freud Report):


As we can see, the big growth area has been in mental and behavioural incapacity, which now accounts for 40% of all claimants. Sounds pretty flakey, but people like the Doc reckon such conditions are fearsomely difficult to diagnose objectively, so how do you identify malingerers? The Major and I say that being "a bit stressed" can't be enough to prevent some kind of work, but what do we know? Probably about as much as James Purnell.

Well, OK, let's park that. Let's simply assume the government is right when it says 1m of IB recipients really do want to work, but simply can't find jobs. What do we do about that?

For years, the job of finding jobs for the unjobbed was entirely down to the DWP's Job Centres, or Jobcentres Plus, as they've been rebranded (cost?). But that... well, it has its limitations, as we can possibly glean from Freud's 'Benefits Supervisor Sleeping' (modelled by 20 stone Jobcentre supervisor Big Sue Tilley, who has since been promoted to manager of a Jobcentre Plus in central London).

So a few years back, as part of Labour's welfare to work policy, DWP began to employ job brokers. These are commercial and voluntary organisations who, for a fee, undertake to get welfare recipients back into paid employment. Which they do, not just by finding job opportunities, but by working with candidates to train and prepare them for the job market and the world of work.

In the case of IB recipients it's called the New Deal for Disabled People (NDDP), and last year it cost us £74m.

Job brokers are in fact everyone's Great Idea for shrinking the massed ranks of working age welfare dependents. What could be better than leaving publically payrolled and pensioned Big Sue to doze on the sofa, and replacing her with power of specialist professionals fired up with financial incentives geared to rewarding sustained employment, not just initial placement.

Brilliant.

There's just one small problemette- in the hands of DWP, there's virtually no evidence it actually works.

The DWP says the NDDP programme costs around £1,000 per registrant. But the cost per successful job placement is higher at around £2,000-£3,000. And the cost per successful "sustainment" (at least six months in the job) higher still at around £4,000-£5,000. That's because less than half of registrants get placed, and less than a quarter then manage to keep their jobs (see here).

That could still be worthwhile, because workers pay tax, so there are some other benefits to taxpayers. There are also potential non-financial benefits to recipients (eg better health in work). But the DWP has no serious evidence on any of this. When the Public Accounts Committee looked at it, their verdict was damning:

"The Department has an inadequate understanding of the return it is getting for its expenditure on work programmes. Disabled people have access to specialist provision but can also access mainstream services offered by Jobcentre Plus. The Department does not know how much of the mainstream provision is used in helping disabled people find work, nor how effective it is.

In addition, it holds limited or patchy information about providers... there is little or no information on how many people are on the programme, what services are being provided, or on the effectiveness of the programme. As a result it cannot easily assess the effectiveness of the programme or profile clients to ensure their needs are being met."

Which is a problem only too familiar to BOM readers: the commissars bulldozing something through on the basis of no proper evidence, and no systematic monitoring of results. PAC went on:

"There are more than 500 providers contracting with Jobcentre Plus to deliver one or more of the disability programmes. The quality and value for money of provision varies widely and acceptable standards are not always achieved. Between 2002 and 2005, for example, over 50% of the learning offered in Workstep provider placements was judged unsatisfactory by the Adult Learning Inspectorate."

Another familiar problem: it's one thing to contract with private sector suppliers, it's quite another to manage the contracts so as to get the desired results. Our Simple Shopper routinely hires duds.

PAC continued:

"Providers of the New Deal for Disabled People may be deliberately picking people who are easier to help, at the expense of the more difficult to help. The contract for New Deal for Disabled People specifies that providers must accept all self-referred people who are eligible. However, such a stipulation does not preclude subtle encouragement to the easiest to place and discouragement of those who would require more effort."

A classic: ye olde cream skimming. Unless contracts are tightly drawn and service suppliers properly managed, they will systematically skim off the easiest cases. And with IB recipients, the easiest to employ may well find work for themselves under the existing arrangements.

We began looking at the DWP's job brokers after prompting from someone who's actually had experience of trying to use them. Benefit Scrounging Scum (aka Bendy Girl) has a condition that I don't pretend to understand. Suffice it to say, she's on benefits, wants to work, and has direct experience of DWP's job brokers. But as she writes on her blog, they have been useless.

She clearly felt she was one of the few people to have understood that, but the PAC report shows she's not alone (also see the associated NAO Report). And Policy Exchange are publishing a study on Monday which is going to make some very similar points:

"The study concludes that while dole queues can be cut when the system works efficiently, it is all too often exploited by companies whose main aim is to maximise profits.

The study found that in some cases companies exploited "success fees" which are paid when they find someone a job and increase in line with how long a person has been out of work. This led them to deliberately keep people on benefits until they passed a threshold that would guarantee higher payments. There have also been claims that firms "cream off" those who are easiest to place in jobs, while refusing to take on difficult cases."

This is a sad and familiar tale. In theory, job brokers sound like a good idea. But in practice, in the hands of our simple shopping evidence-lite commissars, it's turned into yet another opportunity for sharp operators from the private sector to get their noses even deeper into the public trough.

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