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The government will fail to reduce long term welfare dependency unless radical changes are made to Jobcentre Plus (JCP), the agency tasked with helping the unemployed back into work. A new report published by leading think tank, Policy Exchange, argues that government is wasting billions and letting down the unemployed by failing to diagnose claimants’ underlying problems and barriers to work at an early stage. It recommends that JCP should be replaced by a smaller, cross departmental organisation called "CommunityLink". The main role of CommunityLink would not be to hand out benefits but to identify the support that people need and get them into long term work.

The report – Personalised welfare: rethinking employment support and Jobcentres- notes serious problems with JCP. Only 29% of claimants say they are satisfied with their experience at Jobcentres. In research for DWP*, employers reported "very negative" experiences with "really inappropriate" candidates sent for interviews. JCP’s job search database is severely dysfunctional. And JCPs advisers are hamstrung by poor use of information, which gives them only very basic information about the claimants they are trying to help.

The report says that an effective and personalised employment service rather than a benefits office would be of greater help to those looking for work. CommunityLink would be used to target this sort of support at those with the greatest needs from day one of a benefit claim, replicating the Australian model which focuses on making a detailed profile of claimants’ needs and underlying problems.

CommunityLink would be fully functional by 2017/2018 and the report calls for some short term reforms to enable the transition from JobCentre Plus to take place smoothly:

1. As a first step, the Government should announce that it will begin to give targeted support to jobseekers from day one of their benefit claim and that it will move the provision of employment services completely to the private and third sector

2. Until this system is fully in place, the functioning of JCP should be split into two distinct roles. One part to deliver segmentation and claim management; and another to provide employment support. This will allow each of these distinct segments to build expertise and experience in delivering the services under CommunityLink when it is introduced

3. New models of public service provision should be employed in the employment support side of JCP before CommunityLink is created. This would allow JCP staff to set up mutuals or social enterprises to deliver employment support and to start to build market expertise so that they could compete with private and third sector firms when CommunityLink is created and employment support contracted out

To pave the way for the transition to a new model for the provision of employment support, there are

other reforms that will make employment support more targeted and effective now and to prepare JCP for its future role. These include:

- Creating a full, personal record for each claimant. Advisers know very little about a claimant’s history or circumstances. To start to move towards a system where more tailored support is possible it is essential that a permanent record for all claimants is created. This would include a full claim history, periods of work, training and interventions

- The creation of a national CV database and proper job matching system. Each claimant would be required to write a CV at the initial point of the application process and individual accounts would be registered that would show how long each claimant has searched for jobs, how many they have applied for and, whether the jobs searched and applied for are appropriate.

- Freeing up advisers’ time to focus on the most vulnerable. With great pressure on advisers, it makes very little sense for JCP advisers to see all claimants every fortnight. This "sign on" is often for only a few minutes, regardless of need – a space of time too short to give meaningful help. Instead, a large portion of claimants would sign in electronically at Jobcentres on a fortnightly basis, freeing up personal advisers to concentrate on at-risk groups, while still mandating regular attendance at JCP

- Changing the culture of JobCentre Plus. Personal Advisers are paid on national salary scales and are evaluated by multiple targets that bear little relation to sustainable job outcomes and do not adequately reward effort or performance. Instead, personal targets linked to job sustainability should be used as the key basis for performance reviews and remuneration – rather like recruitment agencies or Work Programme providers in the private sector. At the same time, advisors would be given greater discretion over how they handle claimants.

- Diverting people from starting to claim benefits. The report suggests that to free up resources to implement the system, the time claimants have to look for work before they were eligible for benefits should be increased from three days to two weeks. The waiting period between the point that a person applies for benefits and the point at which they begin to accrue in the United States is one month.

Matthew Oakley, co-author of the report and head of Policy Exchange’s economics and social policy unit, said,

"The current system of employment support is both unfair and ineffective. It is letting unemployed people down as Jobcentres don’t provide a personalised service. This means that some claimants with significant barriers to work are left without support for up to 12 months before being given effective employment support. This is costly to both the state and to the individuals involved."

"It wouldn’t be efficient to spend money on welfare-to-work schemes for all claimants. But if we target support better, then we can afford more help for those who need it, and avoid wasting money on those who don’t. This will reduce average times on benefit, save money, and help reduce unemployment and poverty."

*Hall S, Pettigrew N, Mousley W, ‘Building a coherent strategy for engagement: Deliberative research with employers’, DWP 2008, p. 29. http://research.dwp.gov.uk/asd/asd5/rports2007-2008/rrep477.pdf 

For further information, please contact Nick Faith on 07960 996 233 or nick.faith@policyexchange.org.uk