Welfare-to-work should focus on poverty reduction

Chris Goulden is the Head of Policy and Research at the Joseph Rowntree Foundation. This is the latest post in our manifesto series.

Poverty means that you can’t afford basic necessities and stops you from participating in society. It is determined by the cost of living and your family income, which depends largely on your earnings. The welfare-to-work system is the main way that the government helps the long-term unemployed to get into work, but its potential role in improving people’s earnings – and therefore addressing poverty – is under-realised.

Does welfare-to-work really work?

Welfare-to-work policy does not currently target poverty reduction. Instead, its focus is on moving claimants off benefits and, in some cases, into a long-term job. As a result, we don’t really have clear evidence about how the welfare-to-work system can best help to reduce poverty. We also know relatively little about what can successfully help people increase their earnings once they are in work. Localised commissioning and delivery alongside devolution of welfare-to-work budgets comes with both risks and potential gains. While sanctions may provide an incentive to some people to move into work where they might not have done otherwise, it can push others into poverty.

Jobs are not enough

There are signs that job insecurity is getting more entrenched in the UK labour market despite rising employment. Using figures from the Department for Work and Pensions, we can estimate that only one in three claimants of Job Seeker’s Allowance (JSA) find a job that lasts for over seven months within six months of starting to claim. We also know that there is a high rate of repeat claiming of JSA. Around 50% of men making a new claim for JSA have made a claim in the previous six months.

How the voluntary sector can help

Instead of the current system, then, it would be better to place the goal of sustainably increasing earnings at the centre of welfare-to-work. How can this be achieved?

• The delivery of employment support should take a personalised approach to tackling barriers to both employment and higher earnings.
• Welfare-to-work should support people who are furthest from the labour market, without writing them off or introducing unhelpful conditions. NCVO’s manifesto (PDF, 1.56MB) calls for co-ordinated specialist support for individuals with complex barriers to work, and greater discretion for local job centres to refer people to appropriate services and not just implement sanctions.
• Finally, the programme should join up the support available across different agencies and delivery partners, which is currently fragmented. This would enable the contributions of a range of voluntary sector organisations, who often have the best knowledge and experience of how to help claimants with complex needs.

Refocusing welfare-to-work on reducing family poverty would limit the damage done by sanctions and other conditions and make a considerable contribution to a much-needed comprehensive anti-poverty strategy for the UK.

Chris Goulden