Jobcentre Plus

Chris Evans Excerpts

Tuesday 7th July 2015 Westminster Hall

[Chris Evans (Islwyn) (Lab/Co-op)]

I beg to move,

That this House has considered reform of Jobcentre Plus.

It is once again an honour to serve under your chairmanship, Mr Williams. It is good to see you back in your place. This is the first time we have been in a debate together since you were re-elected, on which I congratulate you.

Since the early 1970s, we have tried 34 different schemes in an effort to get long-term and young unemployed people back to work, at a cost to the country of more than £13 billion. Each scheme has had varying results, but in the main has failed. Welfare dependency and long-term joblessness continue to scar our society. That is not just a failure of policy, but a moral failure. Joblessness damages families for generations. It sets people and groups against each other. It divides people into tribes with no common purpose. William Beveridge said:

“Unemployment is like a headache or a high temperature—unpleasant and exhausting but not carrying in itself any explanation of its cause.”

From the youth training scheme to the new deal for young people, and now the Work programme, multiple schemes have not tackled the causes of unemployment. Long-term joblessness remains stubbornly high, at over 32% of the unemployment rate. No real effort has been made to reverse decades of long-term unemployment or welfare dependency. Our attitude, across this House, needs to change. We cannot accept that long-term unemployment is here to stay or that people will waste their lives on welfare. People should never accept that they will have to lower their ambitions to go into low-paid, insecure jobs. Our welfare system has to be a ladder to success, not a way of life. It is not attitudes that must be shifted; we can deliver change only if the right processes are in place.

The first port of call for any jobseeker is Jobcentre Plus. Jobcentre Plus should exist to get people back into work. Despite claims over the weekend that Jobcentre Plus has helped 100,000 people into work, it still has a record of failure. Policy Exchange research, as outlined in its report “Joined Up Welfare: The next steps for personalisation”, found that only 36% of JSA claimants found a job within six months of claiming benefits and kept it over a seven to eight-month period. Others did not find employment or cycled in and out of work. Only one in five people sent to colleges to increase their vocational training ended up in employment. That research is underlined by Ofsted, which found that in some examples the success rate of Jobcentre Plus schemes is as low as 1%.

The Policy Exchange report identified the root causes of the problem, which is that the design of our employment services has two main issues: the signposting of services does not occur from identifiable points and the delivery of services is nowhere near specialised enough. Policy Exchange could not have been clearer:

“The dominance of Jobcentre Plus on employment support services prevents the development of more specialist providers and personalised welfare services.”

Policy Exchange concluded that Jobcentre Plus is not fit for purpose. Given my experience as a constituency MP over the past five years, I tend to agree. It does not reflect the modern job market, where employees no longer stay in the same job for life—it is more like less than a decade, and falling. It also does not reflect globalisation, whereby people have multiple careers in their lifetime. It is not suited to supporting, helping and retraining people, as necessary.

If someone were to ask for help now, Jobcentre Plus would direct them to the Universal Jobmatch site. The good jobcentres would offer to help people with their CV, but in effect someone would have to wait for six months before a jobcentre really started to help them. Jobcentres are not even attractive places to visit. For far too many people, they are the places they go to be sanctioned; furniture is nailed to the floor and there is a security guard at the front door. Beyond that, the system’s one-size-fits-all model does not reflect the individual needs of jobseekers or understand what employers are looking for.

The situation is even worse for young people. We all know the stories about the Work programme, whereby people with degrees were forced to leave volunteering programmes that would help their future to work in jobs that would not. Some progress has been made, especially in south-east Wales with the work coach delivery model, which provides a single “work coach” for a jobseeker’s entire period of unemployment. However, it seems that much of this activity is too little, too late. Even now, people are getting just a maximum of 20 minutes with a single person—20 minutes to help someone to begin a life-changing process. It is all part of another attempt to make a broken system function just a little bit better.

It is time to change the entire system. Doing anything less would mean that long-term unemployment was not being tackled, and we would create yet another generation of people dependent on welfare. That would fail not only the young people who cannot get a job, their families who often have to support them and the long-term unemployed who are stuck on welfare and want nothing more than to work; it would fail our entire country.

The Prince’s Trust calculates that the cost of youth unemployment to the nation is £10 million a day. To put that into context, that amounts to more each year than the combined budgets for the Cabinet Office and the Foreign and Commonwealth Office. Change will cause pain in many areas, but the decisions that secure long-term, sustainable employment for everyone in our country are worth the short-term hurt that would be caused. It will require a generational effort, but we must start now. The first stage is to abolish Jobcentre Plus.

Jobcentre Plus must be replaced with an agency that exists to contract charities and private recruitment companies to provide a service based firmly in the communities of the long-term unemployed. That service would ensure that there is localised, individualised and specialist support for jobseekers, delivered by groups with a proven track record of success in their locality.

As the Policy Exchange report identified, it would be more effective for funding to flow to different providers, following the individual jobseeker to the service provider best able to get them into work, rather than funding remaining static in one organisation, as it is now with Jobcentre Plus. If someone loses their job on Friday, they should expect to have a personalised discussion with a jobsearch expert by Monday about what employers in the area are looking for, what they want to achieve, what barriers are stopping them from achieving their goal and how they can get the skills that they need and that employers want.

The providers must work hand in hand with local employers. They must know the skills that employers need, the jobs that need to be filled and how candidates can be successful. Once these things have been identified, the local providers should work with jobseekers to get them the skills that employers want, rather than forcing them into jobs through sanctions.

This is not a matter of right versus left; it is simply a matter of following what works. The OECD’s 2010 report, “Off to a Good Start”, found that countries such as Australia, which have moved from a “work first” approach to a “train/learn first” approach, achieved much greater progress in helping people out of work into sustainable, long-term employment. The same report highlighted that

“A move towards early and selective intervention…helps to avoid the build-up of a large pool of youth at risk of becoming long-term unemployed”.

It is by partnering with the people providing jobs, determining what they need and then delivering it that we will tackle long-term unemployment.

A similar model has worked before. In the 1960s, Bobby Kennedy, the New York Senator and presidential candidate, pioneered a community development corporation in Bedford-Stuyvesant, in Brooklyn. That organisation succeeded in turning Bedford-Stuyvesant from one of the poorest areas of New York into one of the most desirable places to live in New York. The CDC is a not-for-profit, community-based corporation that is free from central Government control. It provides a localised and personalised service, and supplements employment programmes with economic development activities and community development. It is driven by a board made up of established local business leaders, charities and—most importantly—local residents, who are brought together in partnership by government to harness the best of private enterprise and the best of social action, with the clear aim of creating and expanding locally owned businesses, and providing residents with the training they need to work in those companies.

The CDC designates each local entrepreneur with a single contract person, who is given full responsibility for helping them to establish and grow their new business, creating growth, jobs and prosperity for the entire community. The CDC contract-holder provides a range of services, including providing guidance in gaining funding, negotiating with banks, finding the best location, and selecting the right equipment, staff and resources. In effect, it provides the services that an entrepreneur needs to start their company and make it a success.

Once the company opens its doors, the CDC increases its efforts. It will be the responsibility of the contract-holder to make that company a success, so that it adds to the economic prosperity of the community. These new companies will be good for communities and for reducing unemployment. The CDCs will support entrepreneurs and help to grow companies, which will create new employment opportunities.

The CDC model has worked before, but it must be updated for the modern world. Employment service providers must bring about a system targeted purely at need and demand. We should use this form of partnership and competition to deliver the jobs that we need for the future.

However, as with all things, there is an elephant in the room. Anyone who has worked in business—especially in small and medium-sized enterprises, as I did in my days at a bookmaker—knows that taking on a new employee is a risk, especially one who has been long-term unemployed. I can understand why firms often choose not to do so. That is where the Government must step in and encourage companies to employ the long-term unemployed. The Government are large enough to take the risk away from companies. We can give employers tax breaks for taking on the long-term unemployed. Yes, there will be a cost, but doing nothing has a greater cost; there is a greater cost in allowing joblessness and welfare dependency to continue.

That is why we must be clear to people. The Government will play their part, creating the new jobs and helping the jobless to get the skills they need to fill them, but jobseekers must play their part as well. As the philosopher John Rawls has said, in a just society

“all citizens are to do their part in society’s co-operative work.”

For me, that means that no-one can be allowed to have a life on welfare. I support the Government’s welfare cap—work must always pay more than benefits. However, for far too long sanctions on jobseekers have had exactly the opposite effect to the one we want. Often through no fault of their own, and in many cases because of the faults of Jobcentre Plus, people are being sanctioned, which traps them in a cycle where they cannot find work and cannot receive the support they need.

In the last Parliament, a Work and Pensions Committee report, “Benefit sanctions policy beyond the Oakley review”, found that at present the sanctions regime does not achieve its aims, and that often all sanctions achieve is harming vulnerable people and causing financial hardship, further trapping the jobless in welfare dependency.

The solution illustrates how, more than any other problem, the issue can be solved only by using both the left and the right. The Policy Exchange report called for the creation of “citizen support centres”, operating separately but alongside employment support providers. These centres would act as the primary and central hub for accessing Government services, including all benefits. That would make the process of receiving payments distinct from receiving help into work.

However, that is not enough. What is also needed was identified in the Institute for Public Policy Research report, “It’s All About You: Citizen-centred welfare”, and it is welfare responsibility contracts. They are legally binding contracts between jobseekers and the Government that outline in plain terms what is expected of jobseekers, what sanctions they will face if they do not fulfil their obligations, the Government’s responsibility to them and the responsibility that they have to the Government and society.

I will end by restating a simple fact. This issue is not about Labour or Tory; it is not about left versus right; and it is not about political advantage. It is about doing what works. In the past 40 years, welfare dependency has been allowed to become a way of life in many of our communities. Joblessness has become the norm for too many families. Low pay, insecure jobs and the lack of a future have been allowed to become part and parcel of people’s lives. Poverty of money and ambition are all too often just facts of life now. No Government of any hue have managed to solve this. Simply put, we have failed our country and our constituents. We have tried the same thing over and over: ineffective training programmes, irrelevant to the real needs of business; sanctions for those who cannot get jobs; and subsidies for low pay through tax credits. We have tried time and again to reform jobcentres, but to no avail.

We need a new approach built around partnership between Government, charities, private enterprise and local residents, in which the individual needs of the jobless and of businesses are properly catered for, in which we harness the right structures and right techniques to create new jobs for the unemployed at a local level and in which support from Government is matched by responsibility from the jobless. We have no future as a country if these problems continue to exist. Communities across the country such as the one I represent have no future when unemployment and poverty are a fact of life.

Let me be clear. It is our duty in this place to get Britain back to work. This is the only future our country has: one in which we work our way out of poverty, out of low pay and off welfare dependency. The great American President Franklin Delano Roosevelt said that to govern:

“demands bold, persistent experimentation. It is common sense to take a method and try it. If it fails, admit it frankly and try another.”

We have tried the current method of getting people back into work for the past 40 years. It has failed. It is time to try another.