PRIVATE and voluntary sector providers of employment services have united behind a joint campaign to reform welfare-to-work policy in the UK The Government is shortly expected to publish its Green Paper on Welfare Reform and details of its intentions are eagerly awaited. The Prime Minister has continually stated that what matters is the quality of public services, not who provides them. Extending this notion further, he has made “diversity and promotion of alternative providers” one of the four principles of public sector reform.
Within current welfare-to-work policy, Jobcentre Plus, an executive agency of the Department for Work and Pensions, is responsible for delivering the public employment service. A relatively small number of these services are contracted to independent organisations from the voluntary and private sectors.
Independent providers enjoy a range of advantages — the ability to tailor services to specific groups, closer integration into local communities and the freedom to innovate. So, even when dealing with difficult groups, they can outperform state services. Tomorrow’s People is a charitable trust helping the long-term unemployed into employment, education and training. Independent evaluation shows that, on average, 90 per cent of clients are still in work three months later, compared with 79 per cent through Jobcentre Plus’s New Deal. Not only is it more effective; it is also cheaper. The gross cost per job created by Tomorrow’s People is about £2,050 compared with £3,500 for New Deal; results by no means unique among independent providers.
Seizing the chance to harness the voluntary and private sectors, the Australian Government pursued a programme of radical reform in this area. Reforms opened up the provision of services, with the state withdrawing over time to become exclusively a purchaser. Within five years, successful job outcomes increased by 70 per cent and total costs fell from A$3.2 billion (£1.37 billion) to A$1.9 billion.
A recent independent report by Oxford Economic Forecasting examined how the UK could improve employment services. Referring to the Australian model, it recommends allowing independent providers to compete on an equal footing with Jobcentre Plus to deliver services. The result, says the report, would be “a marked improvement in the numbers of long-term jobless across the country securing employment”.
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Jobcentre Plus has attracted a range of criticisms in recent months. The Public Accounts Committee estimates that £1.5 billion a year is lost because of staff errors. The BBC recently revealed that over a six-month period, one million calls from people making claims or seeking help went unanswered. Added to this, Jobcentre Plus has announced that £186 million of budget cuts have been made to frontline services.
There is a pressing case for restructuring employment services so that the best providers, no matter where they come from, are able to deliver services. The beneficiaries will be the people who need it most — those trying to get into work. Stephen Bubb (top) is chief executive of the Association of Chief Executives of Voluntary Organisations. Chris Melvin is deputy chair of the Employment Related Services Association
Stephen Bubb is chief executive of the Association of Chief Executives of Voluntary Organisations. Chris Melvin is deputy chair of the Employment Related Services Association