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The Bank of England’s ‘Forward Guidance’ and unemployment

Posted in Employment by

You will not have missed the news that Mark Carney, the new Governor of the Bank of England, has announced that the Bank of England intends not to raise interest rates until the unemployment rate has fallen below 7% at the earliest (subject to three “knockout” clauses, including inflation forecasts and expectations).

As a result, the Bank has now published a chart of its forecasts for the unemployment rate (below). This is not expected to fall below 7% for the next three years, though it is a ‘fan’ chart showing that there are chances of unemployment falling faster (or slower). These forecasts are expected to be updated each time the Bank publishes its quarterly Inflation report, so we will have more regularly updated forecasts than the six-monthly Office for Budget Responsibility forecasts.

Bank of England chart

The Bank examined a number of alternative approaches for its new forward guidance but it chose to use an unemployment measure for a couple of reasons.

Importantly, linking interest rates to unemployment makes sense if you’re a central banker who wants to control inflation. In economic theory, unemployment is a key driver of pressure on wages: if unemployment is very low, it’s harder to fill vacancies and to retain staff, so wages have to go up. If it is high, the opposite is true. The recent debate on zero-hours contracts is a good example of this – in a weak labour market with high unemployment, employers can get away with paying less and making conditions less good for employees.
Because real earnings have been falling, economists will believe that the current high unemployment rate is deflationary – reducing any inflationary pressures anywhere in the economy. Economists tend to see this as a good thing but excessive at the moment.
Economists use a ‘Phillips curve’ to show that there is a trade-off between the unemployment rate and the inflation rate. Monetarist economists have a concept of a ‘non-accelerating inflation rate of unemployment’ or NAIRU, which is often renamed the ‘equilibrium’ rate of unemployment (so people don’t get upset that economists think unemployment could be a 'price worth paying' for low inflation). The Bank thinks the ‘equilibrium’ rate is around 5%, a long way below current 7.8% levels.

Another key reason for choosing the unemployment rate is that it is published monthly, using recent data, and is not subject to big revisions (unlike some possible alternatives).
So the unemployment rate is something of a central bankers' measure - it gives a good indication of the likely pressure that the unemployed put on wages and thus inflation. However, it is definitely not an indicator of the overall state of the jobs market or the position of those out of work. It measures the share of the workforce looking for work rather than the share of the population, and ignores those out of work who are not looking for work.
There are several implications for the welfare to work sector.

Firstly, this guidance should give some welcome support to the view that we should be doing all that we can to support those furthest from work to prepare for, look for and then move into work. In this (mini) recovery we have seen rising employment and broadly stable unemployment – with economic inactivity falling. This is welcome and needs to continue, as it enables interest rates to be held down with little risk of inflation while employment rates rise. The Bank’s position is a timely reminder that we need to avoid the fate of the US (and the UK in the 1980s and 1990s) of unemployment falling because more people are becoming inactive rather than because they are finding work, which would be bad for inflation and bad for those out of work.

Secondly, the ‘forward guidance’ is stated in ILO unemployment terms. From a Bank point of view, it matters not that people are claiming benefits, it matters that they are applying for jobs. A tight regime driving people off benefits (or putting them off applying) can be detrimental if people become less effective at looking for work because they are not receiving support.

And thirdly, we get Bank forecasts of unemployment rates, which help with forward planning.

Paul Bivand
13 August 2013


The costs of welfare reform

The Local Government Association today publishes research by us on the local impacts of welfare reform. We’ve been piecing this together for the last three months – working through all of the Government’s welfare reforms and finding the best ways, with the available data, to estimate how many households will be affected and to what extent.

The results have had some coverage already today and make pretty hard reading.

Overall, we estimate that households claiming benefit will receive on average £1,615 a year less, by the last year of this Parliament, as a result of welfare reforms. And this isn’t just a small minority of families: fully 45% of all “working age” households receive benefit (tax credits or one of the benefits paid by DWP) and are covered by this analysis.

Our research also spells out the sheer breadth of the changes being made to the benefits system. In recent months the focus has been on the introduction of the benefit cap and the new size criteria in social housing, but these account for less than 5% of the annual savings from welfare reforms. More than twice this amount is being cut through reforms to the Local Housing Allowance for private renters, more than four times as much is coming from reforms specifically targeting disabled people and those with health conditions, and nearly ten times this amount is coming from cuts to tax credits for those in work. Most of these reforms have already started to bite.

Our analysis also suggests that most of the savings from welfare reform will fall on working households, most of whom will be on low incomes. And this is the case across the country – we estimate that the majority of savings will come from working households in all but eleven local authorities nationwide.

Looking at local areas, we find that the average impact on households claiming benefit is pretty similar in most places.  However what drives savings is different in different areas – with cuts to Housing Benefit in the private sector and the benefit cap accounting for more of the savings in the south of the country, and cuts to tax credits and disability benefits making up a larger share in the north. London, however, does worse on all counts – high rents, high worklessness and often low pay – with households worse off by nearly £2,000 a year on average.

Within this, of course, some families will see far larger losses and some smaller. Those losing the most are likely to be larger families, those with high housing costs, and those with someone claiming Disability Living Allowance and/ or Employment and Support Allowance. Clearly, many of these will find it difficult to cope with losses on this scale, even with support to find work or to move to cheaper accommodation. The government’s own research suggests that really very few claimants affected by reforms are looking for work, and even fewer are having success in finding it – while there is little evidence yet of claimants moving home. You wouldn’t guess this from what Ministers say – if I were them I’d be asking why so few claimants are moving into work, rather than so many.

In our research we modelled three different scenarios for how claimants may cope with Housing Benefit reforms by looking for work or moving home – based on the research so far. Even in the most optimistic scenario (and it was very optimistic…) fewer than half of those affected would find work or move home. And in more realistic scenarios, only about one in five would do so. Set against this, Discretionary Housing Payments would be able to meet perhaps £1 in every £7 that households would still stand to lose.

Looking further ahead, Universal Credit will make things a bit better overall – perhaps reducing the average impact of reforms by around £190 a year by the time it’s rolled out. Within this, some will be better off than they would have been and some will be worse off (again including many disabled people). However most analyses, including the government’s original Impact Assessment, suggest that any impacts on employment are likely to be modest at best.

So – what to make of this?

First, the impacts of reform will be substantial everywhere – but will be driven by different things in different areas. So in this case working locally really is best. This means looking at how we collect, understand and use information; how we join up support across employment, skills, housing, troubled families and so on; and how we share good practice.

Secondly, an over-heated rental housing market and weak labour market, as well as many families’ own circumstances, mean that most will struggle to find work or move home.  So we need to address these challenges – through stronger support to find work and renewed efforts to build more affordable housing.

Thirdly, the impacts of reform extend far beyond the benefit cap and the size criteria. So we need to ensure that we understand these wider impacts – particularly for low-income working families - and are able to plan to meet them. The Local Support Services framework under Universal Credit, which is due out in October, would be a good place to start.

And finally, we need better data from government – both on the cumulative impacts for different areas and the impacts for different groups (in particular disabled people). Today’s report represents a best estimate based on what is available.  We hope that it marks the start, rather than the end, of an evidence-led debate on the local impacts of reform.


Youth Contract Wage Incentives - a failure to listen to evidence

Posted in Blog by paul.bivand

Paul Bivand, Inclusion's Associate Director of Analysis & Statistics, outlines Inclusion's take on the first figures on the Coalition's Youth Contract wage subsidy for 18-24 year olds.

The first figures are now out on the take-up of the Coalition's Youth Contract wage incentive - and so far - in the year to May 2013,

In our report 'Youth Unemployment: a million reasons to act?' in November 2011, we pointed out that this sort of employer subsidy programme had been tried repeatedly by successive governments - and had always had very low take-up by employers.
We said:

  • Subsidies have tended to have very low take -up. The National Insurance holiday for employers taking on a long-term unemployed person launched in 1995 and was expected to benefit 130,000 people a year, but by January 1996 there had been just 2,300 successful applications.
  • More recently, DWP put in place a far simpler subsidy programme, the ― Six Month Offer where people who had been on JSA for more than six months were given a ―voucher for £1,000 that could be redeemed with any employer who took them on for a job likely to last more than six months (with £500 paid up front and £500 at six months).
  • Over the fifteen months of the subsidy being in place (April 2009 to June 2010), it was paid 46,000 times, but there were just 8,400 payments to people aged 18-24. The impact on youth unemployment would have been even lower than this figure – as a proportion of these young people would have been employed without a subsidy.

We do not yet have any estimates of deadweight - those who would have got a job without the subsidy - but for earlier programmes the figures have been high - meaning that additional jobs are even lower.

These figures contrast with the Future Jobs Fund - where the Government funded additional jobs - where 105,000 job starts were delivered in 18 months. The Youth Contract is substantially cheaper - but is clearly struggling to deliver much benefit.

Over much the same period as the Youth Contract figures, the Work Programme has delivered over 25,000 job outcomes for 18-24 year olds, over 17,000 being six-month jobs for 18-24 JSA claimants. The 2,070 Youth Contract payments are likely to be included in the Work Programme outcomes - which shows that Work Programme providers have so far found the Wage Subsidy at best a marginal help.

So, how could the Youth Contract funding be put to better use? City Deals, Housing Associations and the third sector are keen to use their knowledge and local contacts to give young people a chance of doing temporary jobs that help their communities and give young people a better chance of competing in a tough labour market. They want to work with Work Programme providers to help. Shouldn't we give them a chance?

Paul Bivand
22 July 2013


Welfare to Work UK Convention 2013, 9 July, Speech by Dave Simmonds OBE, Chief Executive, Inclusion

Posted in Employment by Nisha Alberti

Welfare to Work UK Convention 2013, 9 July
Speech by Dave Simmonds OBE
Chief Executive, Centre for Economic & Social Inclusion

This is the 10th anniversary of the Welfare to Work Convention. Much has changed in the past ten years. People and organisations have come and gone.

But looking back I suppose the main thing that strikes me is the passion and dedication that you all bring to your work.

It’s not always an easy industry to work in – we have to be constantly adjusting to new demands thrown at us by the economy and, of course, politicians. But the rewards are tremendous because we know that we help turn around the lives of millions of people.

The last year has all been about rolling up our sleeves and getting on with the job.

  • Jobcentre Plus with less staff has helped over 2 million into jobs
  • With less resources, the Work Programme and Work Choice have together helped almost 350,000 long-term unemployed into jobs.

The economy has not made this easy. Unemployment has declined … by not a lot. And most forecasts say it will stay broadly the same for the coming year.

The past year has been about both ‘grit’ and ‘innovation’. Grit because we have all had to dig deep to deliver – taking the hard decisions about what is done and when. Innovation because we have all had to learn new ways of delivering in times of austerity.

Like all areas of public expenditure we have had to rise to the challenge of doing more for less. And you have.

But we continue to lose many good people from the industry – from the front-line to management, from DWP to contractors. People who have dedicated their careers to helping unemployed people. Again, we should say ‘Thank you’.

So, in a way not a lot has changed for welfare to work in the last year. Jobcentre Plus and contractors have been given the tools and you’ve got on with the job.

However, if you were a claimant it would have felt very different. Welfare reform and cuts in benefits do not just hit the pockets of already poor households, they also create uncertainty and fear.

And this is on top of persistent descriptions of unemployed people as feckless and on the scrounge. The vast majority are not feckless and are not scroungers.

It is an insult to the 600,000 who were made redundant last year and an insult to those who desperately want a job – those 5 unemployed people who chase every vacancy.

In reality there is little difference between the average unemployed person and the average taxpayer – it’s just the former wants to be the latter.

Now, as last year I want to talk about the three pillars of our fight against unemployment – Jobcentre Plus, welfare reform, and the Work Programme.

First, Jobcentre Plus. I’ve said it before and will say it again – Jobcentre Plus is a national asset. But we can’t afford to turn it into a box-ticking machine policing a stricter and hasher benefits regime. We need to remember that Jobcentre Plus is successful because it provides the support people need and want to find work.

But this is under severe pressure. At the frontline Jobcentre Plus are having to make difficult decisions about how they allocate ever-shrinking personal adviser time. We think reducing that resource is a false economy – for our national economy and for your local economies.
Jobcentre Plus is there to help people get a job, not to just get people off benefits.

Managing the transition to Universal Credit will be a test for Jobcentre Plus and everyone working with claimants.

DWP is encouraging ‘Local support services’ for UC, and Jobcentre Plus is working locally to develop partnerships. This is an example of how Jobcentre Plus needs to position itself firmly as a local agency not just a national agency.

But localism is not just a challenge for Jobcentre Plus. There is a strong strand of debate throughout this Convention about what greater localism will mean for welfare-to-work.

The second pillar is welfare reform.

The roll-out of Universal Credit is almost with us. Surely this is the severest test of the Government’s reforms – making the considerable investment and upheaval worth it. It will only do this if it really does ‘make work pay’.

But from the point of view of the individual you have to take all of the welfare changes into account. For many this means less income but potentially more gains from work. But we cannot just look at narrow financial incentives. So yes, people may be better off in work – but the move to monthly budgeting, to getting housing costs paid directly, to longer waits for payment will all increase money worries and uncertainty.

And that’s our job – reducing uncertainty, finding people work and being able to tell people clearly and honestly how much they will be better off.

Understanding UC should now be a priority for all. We have to sell the advantages and warn of the problems.

With so much change in welfare payments people need

  • Sound benefits advice
  • Money and debt advice
  • And better off in work calculations

They need these as much as they need to know about vacancies. And the people that need this most are long-term claimants … and many do need face-to-face advice. This is why you and your local partners, such as CAB and Housing Associations, are so important.

This year we are well beyond design and legislation issues … we are now making it real for people and making sure reforms enrich rather than impoverish.

The third pillar is the Work Programme.

You will have all seen the welcome improvement in performance. But we all know that the Work Programme is not yet meeting hopes and aspirations – even if many of those were tough in the first place.

From our point of view the challenge to increase performance yet further means:

  • Investing in support for ESA claimants
  • Working locally to combine budgets with health and local authorities
  • Building employability not just jobsearch
  • Spreading innovation and best practice faster across contractors and supply chains.

Of course, performance could go shooting through the roof if the jobs market takes off. Don’t hold your breath … you would be unwise to count on the jobs market in the next year to boost your performance.

This means that improvement will have to come from within the programme and not from outside. It will be your appetite for continued risk, investment and innovation that will make the difference over the coming year.

But solving the problems of ESA claimants within the Work Programme looks to be a tough ask. Many are not ready for work but as contractors you are incentivised to find them work. Policymakers have to resolve this otherwise we are in danger of failing a group that has already been failed over the years.

Stimulating innovation and new ways of working with all participants will be critical. We welcome the establishment of DWP’s Best Practice Group but this is not nearly enough. More radical steps are needed, for example, by contractors openly sharing data and research. OK collaboration may sit uncomfortably with competition but every contractor has a common interest in the programme succeeding.

Now, the current state of the Work Programme will be hotly debated at this Convention but we also need to look to the future. We are half-way through the current contracts and already policy-makers are preparing for what should replace the Work Programme.

At this Convention we want to kick-off an open debate about Work Programme Mark 2. We shouldn’t make any assumptions this is just about changing the terms of the existing contract. Work Programme 2 may have to look very different from what we have now. Many of you will doubtless already have your own ideas but the next programme will have to cope with some significant forces.

First, it will need to show, more than ever before, that it really is “better than doing nothing”. Expect some to challenge whether there should be any contracted programmes at all.

Second, it will need to make the very most of scarce resources – including by working better with adult skills, criminal justice, health and local budgets, especially those independent local initiatives outside of the Work Programme.

Third, running through-out there will be a debate about the extent of localism. To what extent should the commissioning and management of programmes be devolved downwards?

We are getting ready for that debate. We all must.

Coming back to the present. At Inclusion we are always thinking about what is needed to help you do your job better. We’re firm believers that good and timely labour market information helps you know what employers are demanding.

That is why I’m pleased to announce today a new partnership between ourselves and Monster, the company behind Universal Jobmatch. We’re combining our skills to better inform your work.

When the new labour market information service goes live this Autumn it will provide you with bang up-to-date intelligence on employer demand – the jobs, the skills and the industries. Remember, a good job match is a sustainable job match.

Finally, given this is the 10th Anniversary it feels like a good time to also say “this will be last W2W Convention”. But we’re not going away – we’ll be back next year but looking different. We too have to adjust with the times.

So enjoy the last Convention.

We are One industry – but with diverse skills, capacity and interests.

Together we have one task – sustainable jobs.

I hope this Convention helps you achieve your aims for the coming year.

Thank you.


Inclusion's view on the Spending Review

Tony Wilson, Inclusion's Director of Policy, outlines Inclusion's view on the Spending Review, as delivered by Chancellor of the Exchequer, George Osborne, on Wednesday 26 June. 

As expected, this is a tough settlement for government departments and heralds a further squeeze for people on low incomes and those out of work.

The introduction of a one-week waiting period under Universal Credit is concerning and may be counter-productive. Waiting days are not new: currently, claimants don’t usually get paid for the first three days of a Jobseeker’s Allowance claim. And in other countries these periods can be much longer (for example it is two to three weeks in New Zealand). However the government’s Policy Costings suggest that it will apply to the whole of a Universal Credit claim – including housing, child and disability elements. If this is the case then it will increase risks of rent arrears and debt, and quite likely make it harder for newly unemployed people to sort their finances out and start looking for work.

The reintroduction of quarterly in-depth interviews with jobseekers, and weekly signing-on, is in principle positive. This will largely reintroduce the levels of support that existed up until April 2011. However it is essential that this leads to more support for jobseekers and not just more compliance activity. It will be a difficult balance for the Department for Work and Pensions to both increase quality support for jobseekers and also manage a 10% reduction in its operating costs.

It is also welcome that the government is committing itself to substantial investment in support for disabled people and those with health conditions. Ninety-five per cent of ESA claimants – 2.4 million people – are receiving no support from employment programmes and see an adviser twice a year at the most. Testing new ways of supporting these groups, and joining up with health, adult care, skills and other services, is long overdue.

On the overall welfare cap, the Chancellor has avoided difficult decisions for now. However the government will need clear plans at the Budget for how it is going to work and where the savings will fall. It is not a surprise that state pensions have been left out but it looks like the Winter Fuel Payment, bus passes and other pensioner benefits could be in play. There are no easy answers here, but unless these are included then the axe will fall even harder on those on the lowest incomes – both in and out of work.

For more on the Spending Review, please see our news section


Europe’s talking about youth unemployment ...but are we?

Posted in Employment by Nisha Alberti

Fran Parry, Inclusion's Director of New Business and Partnerships, blogs on youth unemployment, the EU, and the great opportunities available to the UK government.

You may be forgiven for not knowing this. European political, financial and business leaders met last week at the Europe: Next Steps conference to discuss youth unemployment and agree some policy steers to address the issue across the region. The cast list was impressive and included the heads of state of France, Italy and Spain (Hollande, Monti and Rajoy), German Finance Minister Wolfgang Shaeuble and Labour Minister Ursula von der Leyen and the heads of the European Investment Bank and the World Trade Organisation, amongst numerous others.

Youth unemployment is now at the top, or near the top, of the political and economic agenda in the Eurozone. However while our continental partners make plans, including how to allocate a pot of funding of 6 billion Euros set aside to address youth employment issues in the period 2014–20, we appear to be remaining on the sidelines. Why? Clearly part of the reason must be that we are outside the Eurozone. Part of it is probably that we are reluctant to recognise that the EU has authority on this (it doesn’t have 'competence' on labour market policy, in the EU jargon). But part of it is also likely to be that with so many different government departments involved, and so little co-ordination, we simply struggle to speak with one voice on youth unemployment – at home or abroad.

It’s extraordinarily difficult to see where the final responsibility for youth employment lies in the UK. As our 'fragmentation analysis' last year set out we have policy and programmes emanating from DoE, BIS, Cabinet Office, DCLG and DWP as well as local initiatives and ESF-funded programmes but who is coordinating it all and from where? There’s a laudable exception in the Scottish Parliament where Angela Constance holds the portfolio of Youth Employment Minister and new Junior Education Shadow Minister Tristram Hunt appears to have taken on the opposition responsibility for youth employment. But it’s unclear who in the Coalition ministerial team has the final say on what’s going to work most effectively for the long term prospects of our young people and the impact that must have for the turn around of UK plc?

There wasn’t any 'silver bullet' last week. European leaders acknowledged youth unemployment as an urgent priority and came up with limited though sensible proposals. As well as the German Finance and Labour ministers urging the conference to make good use of the available EU funds, including the aforementioned 6 billion euros (5.1 billion pounds) ring-fenced for youth employment, there was also agreement that there should be a focus on encouraging SMEs to take on young recruits. Finance Minister Wolfgang Schaeuble also spoke of the need to preserve Europe’s welfare model. If U.S. welfare standards were introduced in Europe, 'we would have revolution, not tomorrow, but on the very same day,' he told the conference.

What was agreed was that the youth employment crisis will be a central theme at the June EU leaders’ summit on 28 June. As an indication of the seriousness that Germany takes its own youth unemployment (low by European standards at 8%) and the wider European picture (23.6% European average, with Greece at 64% and Spain more than 50%) Angela Merkel, the German Chancellor, invited EU labour ministers to a youth unemployment conference in Berlin on July 3, timed presumably to align with Skills Ministers’ trips to support their Apprentices at World Skills in Leipzig that same week.

UK ministers should be encouraged to contribute to these events. Failing to do so would suggest a blinkered response to arguably the biggest social problem facing Europe and the UK. Not least there are some myths that need to be busted about what has worked and what hasn’t and lessons to be shared about how limited funds can be most appropriately invested, and how not. This will all necessitate a level of candour that it would be refreshing to see.

It’s clear the EU wants to prioritise youth employment and to fund member states to test new approaches. There’s a huge opportunity here for the UK government and for individual local authorities to harness this to innovate and evaluate new approaches. The big irony – and imperative – is that while we’re at the leading edge internationally in running active labour market programmes, we are near the bottom of the class on youth unemployment. So, it could be argued that we have things to learn from our European colleagues, much to contribute and certainly nothing to lose from being at the party. 


Youth Employment Convention ...what next?

Posted in Employment by Nisha Alberti

Fran Parry, Inclusion's Director of New Business and Partnerships, blogs on the Youth Employment Convention and how we can deliver a solution to a system that, up to now, has generated disappointing results.

One of the more sobering elements of the Youth Employment Convention, held in London on 8 and 9 May, was Will Hutton’s exhortation that we should be ‘very angry’ and for a few uncomfortable minutes we were. We felt guilt, responsibility, and failure. We felt the pain of the financial mess that is resulting in a whole generation of young adults enduring a recession the likes of which none of us have experienced before. We felt anger and we undertook to ensure that we followed up on the wise words of an invigorating two days with some tangible actions. Now it’s important that we do so and build upon the momentum of the event. 

The Convention sought to listen to young people and to understand how it feels to be unemployed and cast adrift at the time of your life when you are at your most optimistic, and at your most vulnerable. We heard from young job seekers about where they think the shortfalls in the education, employment and skills systems lie and what actions they think would address these shortcomings most effectively. A youth panel kicking off the event was impressive: 10 young people, from diverse backgrounds, helping us understand things from their perspective, eloquently, thoughtfully and with passion. Here’s just a flavour of what they, and young people contributing throughout the event, said would assist young people to transition more successfully in to the world of work:

  • Knowledgeable careers advice – that starts earlier in one’s school life and is consistently available rather than on an adhoc, occasional basis.
  • A universal careers support offer – available to everyone, face to face.
  • Practical, relevant and good quality work experience opportunities .
  • Long term mentoring support through important transitions.
  • Lessons made relevant with functional numeracy and literacy.
  • Lose the rigidity of the curriculum, ‘don’t teach us inside the box if you want us to think outside the box’.

On day two of the Convention we put the employers under the spotlight and asked them to tell us what the essential attributes are that they look for in young recruits. This is how they described what they are looking for:

  • Flair, imagination, innovation, entrepreneurial, confident, communicative, able to problem solve, resilient, right attitude…and more in the same vein.

None of this is rocket science. None of it seems unreasonable. None of it is particularly surprising. So, why then do we still have a system that young people consider ill prepares them for the transition to the world of work and which employers say is yielding disappointing results? Most notably this system is not, in the main, producing young recruits with the attributes employers state they need. Why do we continue to fail both the supply and demand side in such a fundamental way?

Clearly the ‘bonfire’ of a number of supporting services has had its effect. The demise of Connexions, Education Business Partnerships, Work Experience, Aim Higher, Enterprise Education funding, and Youth Services amongst others, will all have had an impact. But let’s not kid ourselves that there was ever a ‘Golden Age’ when careers information, advice and guidance was top quality for every child and universal work experience was tailored to the interests and ambitions of every youngster. There wasn’t. We aren’t harking back to something. We are looking at creating something fresh, dynamic and fit for 21st century purpose. Something that young people tell us they want and will respond to favourably. Further, employers tell us they are prepared to do what they can to support work experience and transition choices if they are supported to do so. The trick will be ensuring that there is an appropriate infrastructure to encourage and enable this support.

So, there’s clearly consensus about the problem and the end goal and, necessity being the mother of invention, the time seems right to turn the talk in to action. The big conundrum is how we deliver the solution. Do we allow a thousand initiatives to bloom (and the Convention demonstrated numerous examples of the excellent activity that is going on), or is there a danger that many will perish and fewest will survive in the neediest areas?

Somehow we need to get a grip on all the programmes and activities that are being undertaken and bring them together under common purpose as a universal offer to all 13–21 year olds. Could we create some kind of infrastructure to assist the development of best practice and the sharing of ‘what works’? If so what would this look like, how could we ensure equal access and what would the desired impact be?

These are hard questions but the Convention demonstrated the will of many individuals and organisations to set about tackling them. And, in all honesty, what could be a better shared objective than doing the best by the UK’s young people and creating some positive energy from that anger Will Hutton generated.

Inclusion wants to move the conversation onwards – contact us at



A well meant gamble to reduce reoffending - or just more privatisation..?

Posted in Ex-offenders by

Last week, plans were announced which will dramatically alter the way probation services are delivered; putting a large proportion out to competitive tender. Attempting to address the fact that short sentence (<12 months) prisoners leave custody without supervision from the Probation Service, Chris Grayling is justifiably demonstrating concern for the prolific short sentence offenders who cycle in and out of prison and incur great cost to the public purse. It seems logical to introduce some form of provision for a group who have the highest rates of reoffending of all prisoners.

However, does the need to rehabilitate this heterogeneous group and reduce the costs associated with them necessitate the privatisation of a large part of the probation service? Is prison the best place to begin the rehabilitation of these non-violent offenders in the first place? How will the new contracted out services differ from those already delivered by offender managers?

Transforming Rehabilitation: a Strategy for Reform asserts:

By competing the majority of services, and achieving a more efficient public sector service, we can extend rehabilitation to this group within allocated budgets and we will go ahead to put this new provision in place.”

An element of blame is implied in this statement. The prisoners Grayling is most concerned about are those very prisoners out of the control of the probation service- prisoners serving sentences of less than 12 months. The plans will involve a greater number of offenders under supervision (by new privately run services) but a reduction in the proportion of offenders supervised by the public sector.

The Probation Chiefs Association has expressed serious concerns over the government’s proposals to fragment offender supervision across organisations and sectors – with low and medium risk offenders outsourced to providers and high risk offenders retained by the public sector. It fears that information exchange will become more complex and that the introduction of national contracts with new actors will be at odds with local approaches to reducing crime, thus damaging long established relationships between local partners. All of which could potentially add to the risk of failures in public protection. The timescale of the reforms, as we have come to expect from the coalition, is incredibly ambitious. A new probation service is to be set up across 21 regions creating new services and competitive mechanisms by autumn 2014.

A key aspect of provision for offenders under the reforms will be mentoring. The causal link between social interventions, mentoring being just one example, and behavioural change is complex as Inclusion is finding through our continued research into the efficacy of mentoring as a social policy intervention for disadvantaged people. Our research to date shows mentoring can increase confidence, motivation to job search, and reduce drug and alcohol use (not to be underestimated when working with some of the hardest to help). Whether a mentor is a peer (has some shared experience or identity with the mentee) or a non-peer mentor is a discussion absent from ‘Transforming Rehabilitation: A Strategy for Reform’. There are inherent definitional difficulties in the term ‘peer’, and, even when you think you have established a reasonable basis on which to match two people, there will be reasons why one type of mentor should be chosen over another in different circumstances. These circumstances can be highly nuanced and the choice of mentor(s) should be given careful consideration. Decisions will need to be substantiated by more than Grayling's hunch that ‘There are some really good examples out there of making good use of the old lags in stopping the new ones. We need more of that for the future.’

Despite the above mentioned positive initial findings, proof of the hard outcomes that Grayling needs to make this plan work, such as employment and reductions in reoffending remains elusive. It may be that a mentor may work best as part of a wider range of services offered to a disadvantaged person, be they an offender or someone experiencing long term unemployment and social exclusion. Provided that offenders are being given access to a range of services to deal with complex and varied needs and that mentors are supported adequately and not relied upon too heavily, it could be ‘worth a shot’.

In the current climate is being ‘worth a shot’ enough though? The problem lies in the fact that mentoring, a method with varying and unconfirmed results, will be delivered as part of payment by results contracts, as BBC Home Affairs Editor Mark Easton drew out in his blog (referencing our research). The challenge is that third and private sector organisations alike will have to meet performance targets set by the Government in order to recoup the upfront costs of running such services but without the data to know whether those targets are realistic – and what precisely drives performance in achieving them. The payment by results model has already thrown up problems with the Work Programme -as our evaluation of its commissioning has shown- providers are finding it harder to finance operations than they anticipated and the payment structure is not driving innovation as intended.

Voluntary and Community sector organisations with a great deal of experience in this area will be delivering the proposed mentoring. The cost and scale of evaluations robust enough to prove efficacy are expensive and time consuming, a challenge for small organisations delivering services on the front line. The myriad variables that can bring about a change in a person’s behaviour are extremely difficult to measure and are often not easily attributed to the work of one organisation. Randomised Control Trials, the golden standard in proving statistical significance, are difficult to administer for such social interventions in front line environments. VCS organisations are getting help to demonstrate their effectiveness through a NOMS contract awarded to Clinks and New Philanthropy Capital which, it is hoped, will be able to support them in navigating the minefield that is evaluation in a payment by results world.

The questions remain, how will providing someone with a ‘mentor’ to steer them on the right path make a difference? Will these new volunteer mentors simply become unpaid probation officers? What outcome measures will be used to assess the effectiveness of mentoring? Is it fair, or even possible to try to attribute hard outcomes to a yet unproven model? Will public money be wasted rather than saved?

See Lydia's previous blog,  'Spotlight on mentoring: but do we know if it works?' here.