I write in response to the government claims made recently regarding employment. During Prime Minister’s questions in Parliament on Wednesday, Mr Cameron said that the number of people in full-time employment had risen. Other ministers, such as Esther McVey have echoed these claims.
“We are growing the economy and we’ve got more people in work,” Mr Cameron said.
And: “The number of people out of work in the UK fell by 133,000 to a fresh five-year low of 2.2 million in the three months to March, official figures show.The jobless rate also fell to a five-year low of 6.8%, the Office for National Statistics (ONS) has said”.
I am very concerned about the accuracy of these claims, and should like to challenge both the validity and reliability of them, given the current methodological problems with measurement, which the ONS have acknowledged in part, previously.
To count as unemployed, people have to say they are not working, are available for work and have either looked for work in the past four weeks or are waiting to start a new job they have already obtained. Someone who is out of work but doesn’t meet these criteria counts as “economically inactive”. The results from a selected sample, based on narrow criteria, are then weighted to give an estimate that reflects the entire population.
The other measure of joblessness – the claimant count – is published for each single month. It doesn’t suffer from the limitations of sample size and sampling frame, because it derives from the numbers of Jobseeker’s Allowance (JSA) claimants recorded by Jobcentre Plus, so a monthly figure is possible right down to local level. But because many people who are out of work won’t be eligible for JSA, it’s an even narrower measure.
I draw your attention to the following, taken from the Summary of recommendations: Response from the Employment Related Services Association (ERSA) to the Work and Pensions Select Committee inquiry into Jobcentre Plus, dated May, 2013:
Jobcentre Plus performance metrics:
- The effectiveness of Jobcentre Plus (JCP) should be measured by sustained job outcomes rather than off-benefit flows to create greater incentives to support jobseekers into employment and provide a more accurate picture of success rates. This would address potential perverse incentives to sanction claimants inappropriately, plus ensure greater comparability between JCP provision and contracted out provision.
- Such a change could help to provide greater transparency in order to identify those who would benefit from intensive employment support. Such a performance metric would prevent the phenomenon of ‘cycling’, jobseekers moving between short term jobs and unemployment for many years, but not building up the length of time of continual unemployment to qualify them for specialist support.
In particular, I wish to draw your attention to this from the same document – Response from ERSA to the Work and Pensions Select Committee inquiry into JCP, 2013:
4.1. JCP is measured by off-benefit flows rather than sustained job outcomes. This can create perverse incentives to move jobseekers into short term employment outcomes, rather than refer them to long term contracted out support. It can also create a perverse incentive to sanction claimants as discussed below.
ERSA recommends that whilst off-benefit checks are monitored for national statistical purposes, job outcome and sustainment measure, comparable to the Work Programme, should be introduced for Jobcentre Plus. This would enable analysis between the performance of JCP and contracted out provision and provide accurate value for money comparisons.
5.1. DWP point to off-benefit flows as an indication of the effectiveness of pre-Work Programme support. However, analysis undertaken by Policy Exchange calls into question the validity of off-benefit figures as a success measure given that many do not go into sustainable employment or simply move on to another type of benefit.
8.1 As identified by the Committee in its report into the experience of different user groups on the Work Programme, the use of sanctions is inconsistent.
Providers are obliged to notify Jobcentre Plus if a jobseeker fails to undertake an activity, for example if they miss an appointment. The decision as to whether to actually enact sanctions rests with Jobcentre Plus though. This means that sanctions are not applied even though a provider may think there is a clear case to do so. Conversely, a provider may be satisfied with the progress made by a participant but may be overruled by Jobcentre Plus who have a case for applying conditionality.
For example, one ERSA member reported that Jobcentre Plus decided to sanction a Work Programme participant for insufficient use of the Universal Jobmatch website, despite the fact that the provider had explicitly asked the participant to focus on resolving some other issues ahead of any formal job search activity. Sanctioning represented a great setback in the trust and progress made up to that point. ERSA agrees with the recommendation put forward by the Committee in its most recent report into the Work Programme for DWP to conduct a review of sanctioning activity with a view to ensuring that the processes are clearly understood by participants and consistently applied.
8.2 Part of the problem lies in the fact that Jobcentre Plus is measured by off-benefit flows rather than sustained job outcomes. This therefore means that a situation in which a Personal Advisor applies a sanction that may in fact damage an individual’s progress to employment, would register as a success according to the off-benefit flow measure. ERSA believes that measuring Jobcentre Plus success by sustained job outcomes would remove any perverse incentives to sanction individuals.
So, in summary, simply measuring how many people end their claims for benefits does not reveal the true impact of jobcentre services, nor does it accurately reflect the numbers of those moving into employment.
Let’s not forget that in 1996, the Conservative government introduced the jobseeker’s allowance that cut benefits to young people up to 18 years old – the new allowance was designed to replace unemployment benefit and income support. Young people excluded from eligibility for benefit are therefore absent from unemployment statistics.
The Department has simplified its performance measures and now primarily targets the move by claimants away from benefits, or “off-flow”, as a simple and intuitive measure of performance. However, this gives no information about how individual jobcentres perform in supporting claimants to work. Some may have found work but, in more than 40 per cent of cases, the reason for moving off benefits is not actually recorded.
I am also concerned that underemployment continues to remain very high, despite a small fall of 7,000 in the number in involuntary part time work, the total still stands at 1.42m. This is an increase of a 100 per cent beyond the pre-recession level of 701,000. The rise in employment also continued to be driven by self-employment, which is extraordinary as self-employment is a relatively small part of the UK jobs market. But although just one in seven workers are self-employed, over half of all jobs growth over the year has been in this type of employment. The TUC share this concern, and have said that some people have been forced in to self-employment as they have no alternative.
Previous TUC’s analysis suggests that rising self-employment is part of a wider shift towards insecure employment, rather than as a result of a growing number of people starting up new companies as ministers have claimed. Analysis shows that self-employed workers are often earning less, underemployed, and have less job security than employees.
One very important issue not currently considered is that since the government does not track or follow up the destination of all those leaving the benefit system, as discussed, the off-flow figures will inevitably include many having their claim ended for reasons other than securing employment, including sanctions, awaiting mandatory review, appeal, death, hospitalisation, imprisonment, on a government “training scheme” (see consent.me.uk and the Telegraph – those on workfare are counted as employed by the Labour Force Survey.)
Furthermore, last week Iain Duncan Smith met a whistle-blower who has worked for his Department for Work and Pensions for more than 20 years. Giving the Secretary of State a dossier of evidence, the former Jobcentre Plus adviser told him of a “brutal and bullying” culture of “setting claimants up to fail”.
“The pressure to sanction customers was constant,” he said. “It led to people being stitched-up on a daily basis.”
The whistle-blower wishes to be anonymous but gave his details to Iain Duncan Smith, DWP minister Esther McVey and Neil Couling, Head of Jobcentre Plus, who also attended the meeting. He said:
“We were constantly told ‘agitate the customer’ and that ‘any engagement with the customer is an opportunity to sanction.”
Iain Duncan Smith and his department have repeatedly denied there are targets for sanctions. However, the whistle-blower says:
“They don’t always call them targets, they call them ‘expectations’ that you will refer people’s benefits to the decision maker. It’s the same thing.”
He claimed managers fraudulently altered claimants’ records, adding: “Managers would change people’s appointments without telling them. The appointment wouldn’t arrive in time in the post so they would miss it and have to be sanctioned. That’s fraud. The customer fails to attend. Their claim is closed. It’s called ‘off-flow’ – they come off the statistics. Unemployment has dropped. They are being stitched up.”
Labour MP Debbie Abrahams, the member of the DWP Select Committee who set up the meeting, has renewed her call for an inquiry into inappropriate sanctioning. Debbie said:
“I am deeply concerned that sanctions are being used to create the illusion the Government is bringing down unemployment.”
It is my belief that the claims made by David Cameron and his ministers are an unwarranted, far-fetched inferential leap from methodological premises that don’t stand up to scrutiny, for all of the reasons I have outlined. I felt obliged to draw your attention to this matter, not least because I am not alone in my concerns, and I feel very strongly that it is immoral of any government to mislead the public to which it is meant to be accountable.
Ms Susan Jones.