Two challenges for welfare reformers

As part of the Coalition's welfare reform package, they are scrapping Labour's 'New Deal' programmes and replacing with the 'Work Programme'. The Work Programme will largely target the same recipient group as the New Deals but be delivered by a large network of private providers.

The evaluations of the New Deal programmes showed them to be moderately successful. The New Deal for Lone Parents, for example, boosted the number of lone parents returning to work by between 20 to 25 per cent. However, two problems were outlined by the evaluators.

(1) The New Deals worked best for those better equipped to return to the labour market and worse for those with the biggest barriers to work

(2) And, in terms of job retainment, many jobs which lasted over 3 months were not sustained over the longer term.

Evidence like this suggests that Active Labour Market Policies (ALMPs) work best for those who need them least. Thus, the Coalition and the array of private welfare-to-work providers face two profound challenges. First, they must ensure that the Work Programme succeeds in helping those with the biggest barriers begin the long road back to work. Second, they must ensure that when jobs are found, they are - as George Osborne might say - not just for christmas.