"The roll-out of Universal Credit will see the administration of benefits digitised, taking away another key function of jobcentres. Image: Press Association
Despite the worst economic shock since the second world war, concerns that unemployment would reach 3 million in the wake of the financial crisis proved unfounded. Indeed, the number of people claiming Jobseeker’s Allowance around the turn of the last decade was roughly half the level seen in the 1980s.
The labour market’s resilience over this period partly explains why Jobcentre Plus – the UK’s public employment service – has recently won plaudits. In 2013, the National Audit Office concluded that jobcentres represented value for money. An independent review found the service has curbed the welfare bill and increased the number of people willing and able to work.
Yet the current standing of jobcentres is by no means guaranteed. Internet search tools long ago replaced the local jobs board as the principal tool used by jobseekers to find out about vacancies. The roll-out of Universal Credit will see the administration of benefits digitised, taking away another key function of jobcentres.
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These developments are welcome. If private sector firms increase jobseekers’ understanding of the local labour market, so be it. Digitising the administration of benefits will reduce the scope for error, cut costs and increase convenience.
Nonetheless, there will always be some people who need additional support. The private and third sectors have a significant role to play in the delivery of specialised employment services. But, as Reform argues in a report published today, government could do much more to help the unemployed back into work before referral to an outsourced programme. Three initiatives would help.
First, government needs to change the current framework against which jobcentres are judged. At present, the very act of moving a claimant off benefits constitutes success – even if the individual simply starts another claim. Instead, government should judge jobcentres against their ability to get individuals into sustainable jobs.
"Employment policy is moving in a data-driven direction – but the transition to this new approach is far from assured"
Second, jobcentres need to develop a more evidence-based approach to policy. The introduction of ‘real time’ tax data will soon allow analysts to understand the current employment status of former claimants in great detail. If this data is matched with the tactics used to get individuals back into work, jobcentres could develop a much richer picture of what works in welfare. These insights could help job coaches target resources on those that need them most, as well as personalise back-to-work programmes.
Third, jobcentres must adopt a more proactive approach in local labour markets. Jobcentres currently sit on a huge amount of data regarding those who are looking for work and their skill sets. Sharing this information on a consistent basis with firms and educational establishments would improve investment and training decisions – boosting local prosperity in the process.
The positive news is that policy is moving in this data-driven direction. Under Universal Credit, jobcentres will be required to help those on low pay boost their earnings. Indeed, a trial is already underway to understand how best to deliver these services. But the transition to this new approach to employment policy is far from assured. Only last week, the new work and pensions secretary Damian Green quietly announced further delays to the Universal Credit timetable. Reform will require ministerial resolve as well as technical know-how.
On the steps of Number 10, the new Prime Minister Theresa May pledged to deliver a “country that works for everyone”. With the prospect of an economic slowdown looking increasingly likely, improving employment services must be a priority for the new administration. If May’s ministers succeed, jobcentres will stand a good chance of repeating their strong performance over the financial crisis.