Welfare reform will only work when jobs market recovers, experts warn

The government’s welfare reform proposals are not particularly radical and will not succeed unless the jobs market starts to recover, employment experts have warned.

Iain Duncan Smith, the new work and pensions secretary, yesterday revealed the coalition would look to create a single welfare-to-work programme to stop people getting “parked on inactivity benefits” and help them back into work.

The proposals include making welfare-to-work provision more personalised, increasing the use of private providers and the third sector to get people into work, and re-assessing all those on incapacity benefits and removing payments for those able but not willing to take up employment.

But Kate Lawton, research fellow at the Institute for Public Policy Research, told Personnel Today that, while the government had focused on tackling the right areas, “a lot of this is a continuation of what’s been happening under the previous government”.

She highlighted that personalised care had been implemented under Labour’s Flexible New Deal; that private providers were already being used; and that the previous government had started the ball rolling on re-assessing those claiming incapacity benefits.

Lawton also accused the government of only addressing “half the picture”, as the reforms’ success depended on job creation, which would be difficult in the current economic climate especially in light of the coalition’s decision to scale back the Young Person’s Guarantee and the Six Month Offer aimed at boosting employment.

“All the stuff about benefit reform is very important, but I don’t think purely looking at this will sort out the issues. They need to do more to create jobs to make it work,” she said.

Ian Brinkley, associate director at the Work Foundation, said the proposals were a “logical continuation” of where welfare-to-work policy has been going over the past 15 years and cast doubt they would work in certain areas.

“It’s not a radical departure, it’s just reinforcing the thrust of policy,” he said. “It could well work in parts of the country where there’s a strong recovery in employment like the South East, but it could really struggle in the Midlands and the North.”

Brinkley warned the pledge to use more private providers could backfire as tight budgets could prevent the government offering attractive contracts to firms who needed to make a profit.

“The question is whether the contracts can be sufficient to induce providers to come in, in terms of scale as government budgets are now very tight,” he said.

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