Innovation in labour market programmes

Jo Casebourne - 08.10.2012

There is a lot of evidence on the extent of innovation in labour market programmes prior to the coalition governments' launch of the Work Programme. The Labour Government began 13 years of wide-scale experimentation in labour market programme design with the launch of the New Deal programmes in 1997, focused on lone parents, young people, disabled people and long-term unemployed people. These were followed by a plethora of pilots to develop and test innovative ideas.

These included:

redesigning how employment services were delivered (eg New Deal Innovation pilots, ONE, introduction of Jobcentre Plus, introduction of Work-Focused Interviews, Employment Zones, private sector led New Deals)
area-based initiatives (eg Action Teams for Jobs, Working Neighbourhood Pilots, City Strategy Pathfinders)
skills initiatives (eg New Deal for Skills, Integration of Employment and Skills pilots, Skills Coaching pilots)
initiatives for Black and Minority Ethnic Groups (eg Fair Cities, Ethnic Minority Outreach, Partners Outreach for Ethnic Minorities, Specialist Employment Advisers)
initiatives for lone parents (eg In Work Credit, New Deal Plus, Employment Retention and Advancement Demonstration Project)
initiatives for those with health problems and disabilities (eg Pathways to Work, Disability Employment Advisers, Workstep/Workprep, Access to Work)
initiatives focused on the 'hardest-to-help' (eg Progress to Work/Progress to Work Linkup, StepUP)

These were all evaluated (and the results published in DWP's extensive Research Report Series[1]) and elements seen as successful were designed into future employment initiatives.

Some evaluations suggested that flexibility in how services were delivered could bring improved results. For example, one of the constraints to innovation in the past has been the system of Jobcentre Plus contracting arrangements. The evaluation of Fair Cities found that there was not enough flexibility to restructure contracts in the light of experience gained[2]. The lack of innovative approaches in the Working Neighbourhood Pilots was partially due to the rigidity of Jobcentre Plus procedures which inhibited the ability of Jobcentre Plus-led pilots to develop new approaches, particularly in the use of a flexible pool of money designed to be used locally - the Community Flexible Discretionary Fund. Rigid contracting arrangements also meant that some pilots were less able to be responsive to customer needs (due to lengthy contracting procedures), which limited both flexibility and innovation[3].

More recently, as a result of an independent report on the future of welfare-to-work done for the Labour government in 2007[4], and the subsequent development of DWP's Commissioning Strategy in 2008[5], there has been a shift towards outcomes-based commissioning and the development of 'Payment-by-Results' (PBR) models as mechanisms for buying employment outcomes in welfare-to-work, with the aim of incentivising service providers to innovate in how they deliver these social outcomes.

Based on this work, Flexible New Deal (FND) was launched in two phases in April 2009 and April 2010, replacing a previous plethora of programmes and pilots with a single outcome-based programme delivered by contracted-out providers who were paid by results and could choose what services to deliver in a 'black box' of provision designed to increase innovation. A key change in this programme compared to previous ones was a focus on sustainable employment (defined as being in work for 52 weeks), rather than the past focus on an employment outcome being defined at 13 weeks.

Whilst FND used an innovative approach to employment programme design, an evaluation of FND found that minimum prescription/black box approaches did not necessarily result in greater innovation to deliver sustainable employment. For example, "despite limited prescription on what providers should deliver, little innovation was evident in the design and content of services"[6]. In fact there was "evidence to suggest that the choice of services on offer was narrow and did not address the full range of customer needs, contrary to what might be expected from a 'black box' approach".

Next week we explore how the Work Programme has built on past approaches and the level of innovation happening within the Work Programme.

Read the first blog in the series on Worklessness here.

[1] http://research.dwp.gov.uk/asd/asd5/rrs-index.asp

[2] Atkinson, J; Dewson, S; Fern, H; Page, R; Pillai, R and Tackey, N (2008) Evaluation of the Fair Cities Pilots 2007, DWP Research Report Number 495

[3] Dewson, S; Casebourne, J; Darlow, A and Bickerstaffe, T (2007) Evaluation of the Working Neighbourhoods Pilot, DWP Research Report Number 411

[4] Freud, D (2007) Reducing dependency, increasing opportunity: options for the future of welfare to work. An independent report to the Department for Work and Pensions, DWP

[5] DWP (2008) DWP Commissioning Strategy http://www.dwp.gov.uk/docs/cs-rep-08.pdf

[6] Vergeris, S; Adams, L; Oldfield, K; Bertram, C; Davidson, R; Durante, L; Riley, C and Vowden, K (2011) Flexible New Deal evaluation: Customer survey and qualitative research findings, DWP Research Report Number 758