Government Employment Strategy

We need to say two things about New Zealand. First, they have what is called a ““work first”” approach. If someone loses their job and approaches the New Zealand equivalent of the Employment Service, the system is geared towards getting them another job. In the United Kingdom, the system is geared towards establishing benefits. An awful lot of effort, technology and staff time is spent on getting the benefit established, and then people start to look for work opportunities. We need to consider how things are structured. Secondly, I am not sure what the hon. Gentleman meant about ““over a budget””. Each adviser does not have a personal budget. It is uncapped. I suppose there will be a limit at which they would have to refer the matter upwards—we were not told that—but essentially, they have the freedom to spend whatever is necessary to remove the barrier that stops an individual moving into work. That might involve paying the mortgage or the rent for two months, or buying them a new suit. They even told us of cases where they had bought people cars, because the job was 70 or 80 miles away and there was no transport. They were not buying Bentley convertibles—they were TR7s—but the point is that we need that flexibility to remove the barrier that stops an individual from getting into work. There would be a price cap. Obviously, we could not allow advisers to spend £25,000, because they would send people on holiday to make them feel better about themselves. However, we need that flexibility somewhere and the accounting process needs to be, ““If we don’t do this, we will spend this amount on benefits this year, the year after and the year after on benefits.”” The generational deprivation would otherwise be continued, and, although I hate to mention the Government’s child poverty target, we will not reach it if we do not get more people into work. The employment programmes at the moment are largely geared towards people who come on to benefits. For a new claimant, things move pretty well, but a ““stock””—it is an awful phrase—of some 4.5 million are on inactive benefits. There is nothing substantial available to them to help them to get into work. Pathways to work and the employment and support allowance, which picks up on the pathways to work pilots and offers training, medical treatment and so on, help new claimants to get into work. That is fantastic, and it is right and proper, but there is nothing for the 4.5 million long-term claimants. To go back to Freud, he said that no impact will be made on those individuals unless we change the way in which government is organised and financed. It is hard to give an average, but we could say that it costs about £3,500 to get someone into work. For those 4.5 million people, the cost would be in the region of £15 billion. The Government do not have that. If anyone stands up today and says, ““Our party will do it””, they will be misleading the House. It will not happen. Freud suggested transferring the risk to the private and voluntary sector—mainly the private sector—over a set period of three years. That period is too long, however, and it should be two years. If the provider gets those people into work within that period, it should retain the benefit savings less the cost of putting the person into work. That might not be the perfect solution, but it is the way forward, and it reflects entirely our recommendation on recycling benefits savings while retaining some of that in the Department. I want to close with two issues that relate to single parents. First, last October an incentive to lone parents to engage in work-related activity was announced. It was the work-related activity premium, which had already been piloted in some areas and would be extended from 1 April. On 29 March, it was announced that the premium would be abolished, which sent out a dreadful message. Lots of organisations up and down the country advised their clients that the premium was coming and geared them up to potential work-related training and activity, and that was snatched away at the last moment. My second point is to do with the increasing use of work-focused interviews. I do not have a problem with the principle that people engage in work-focused interviews to assess where they are on the return-to-work scale, where they need help and everything else. However, it is worrying—frightening, in fact—that there have been 40,000 sanctions against lone parents. Something is not working if that many lone parents do not engage with the system in the full knowledge that their benefits could be sanctioned. The Minister helpfully replied to a question of mine the other day and set out the process, and it is almost impossible to get sanctioned because of the number of attempts that are made to get the person to take part in the interview. Notwithstanding that, there were 40,000 sanctions last year. Someone needs to consider that, because the system is obviously not working and nobody is benefiting. The individuals are losing benefit, and the Department is not getting people into work. Something is going wrong somewhere, perhaps in the training programme or the personal adviser programme. We need a close analysis of why 40,000 people have chosen to take a benefit hit rather than attend an interview. An interview is all that it is. It is not an instruction to go to work, it is theoretically a helping part of the process of moving people back into the work arena. That is a serious cause for concern.