[guide.chat] news department work and pensions
- From: vanessa <qwerty1234567a@xxxxxxxxx>
- To: "GUIDE CHAT" <guide.chat@xxxxxxxxxxxxx>
- Date: Tue, 31 Jan 2012 19:29:35 -0000
An extra 750,000 people will join the ranks of the long-term unemployed over
the next four years due to deteriorating economic circumstances, according to
new government forecasts.
The figures, lodged in the House of Commons library last week by the Department
for Work and Pensions (DWP), show an increase of 32% from 2.4 million to 3.3
million in the number of people expected to be entered into the Work Programme
? the government's flagship project for finding work for those who are
typically out of work for longer than 9-12 months.
More than 100,000 prison leavers will now also be entered into the Work
Programme for the first time but when this group excluded from the new total,
the upward revision compared with 2010 DWP figures is 743,000.
The DWP has admitted that its revised figures are a response to the decline in
the UK's economic fortunes reflected in the Office for Budget Responsibility
forecasts in November when they dramatically slashed growth predictions for
2012 from 2.5% to just 0.7%.
The UK slipped into negative growth during the last quarter by 0.2% leading to
fears of a double-dip recession and further hikes in unemployment.
A DWP spokesperson said the figures were also released in order to give fair
warning to the charities and companies that administer the Work Programme, such
as Ingeus-Deloitte, the security company G4S, and Action for Employment or A4e,
as they struggle to fulfil the terms of current contracts and get people into
jobs.
The main rise in entry to the Work Programme comes for those aged 18-24. The
DWP now expects an 83% leap on last year's numbers and a further 71% rise for
2013/14.
The biggest increase in overall numbers is expected to come in 2013/14, when
just over a three-quarters of a million extra people are expected to be looking
for work under the Work Programme, 362,000 more than previously predicted.
In a statement, the DWP said: "The country faces a changing economic picture as
shown by the latest economic and fiscal outlook from the Office for Budget
Responsibility. It is only right that we revise our projections for people
entering the Work Programme to reflect this."
The new figures also increase worries about the scarring effect that long term
unemployment will have on the British labour market and, what politicians have
termed, the "lost generation".
Chris Goulden, the head of research and policy at the Joseph Rowntree
Foundation, said the figures were worrying, adding: "There's definitely a
scarring effect, even for short periods of unemployment and the evidence is
worse when you're younger. And protracted periods can start to affect your
career later in life."
Paul Gregg, professor of economic and social policy at the University of Bath,
who helped coin the phrase "unemployment scarring", was also concerned by the
latest figures.
"We know that exposure to significant periods without work leads to long-term
damage. We know that the costs of that to the individuals in higher future
unemployment, lower wages, health-related problems is very large."
"This recession has been particularly focused on young people, and what is
depressing at the moment is that we seem to be entering a second phase of the
recession and it is still very much the case that all the pain is being borne
by the young."
The revised estimates come as a National Audit report criticised the programme
for being "over-optimistic" and said that the programme was only likely to help
25% of those out of work opposed to a government estimate of 40%.
The 32% increase in jobless people entering the Work Programme is likely to put
further longer-term strain on the private companies and charity subcontractors
that provide the back-to-work schemes, triggering fears that a number could go
bust, and potentially putting the entire £5bn programme at risk.
The 18 major contractors face demanding targets ? getting more than a third of
the programme's projected 3.3 million clients into sustainable work by 2015-16
- in order to activate fees paid to them under the government's
payment-by-results model.
Although contractors would receive increased upfront attachment fees of nearly
£100m as a result of the higher volumes of work programme clients, the rising
influx of new clients, coupled with the deteriorating job market, could force
on them massive extra costs that could threaten their financial viability in
the medium term.
Work Programme industry experts the Centre for Economic and Social Inclusion
said: "The weaker labour market outlook means higher than anticipated Work
Programme referrals and a much bigger challenge for Work Programme providers.
"In the short term, income from attachment fees will increase. But in the
longer term job outcomes and sustainment payments are likely to be harder to
gain than DWP would have expected a year ago."
The figures also show a projected decrease in the numbers of long-term sick and
disabled people entering the work programme.
This is believed to reflect the increasing numbers of incapacity benefit
claimants who are found to be unable to work as a result of work capability
assessments, as well as an explosion in those who are appealing against what
they believe to be unfair decisions that they are fit for work.
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