‘Creaming and parking’ and the problem of the Work Programme’s pay structure
21 May 2013
The Work and Pensions Select Committee published their report ‘Can the Work Programme work for all user groups?’ today (21 May 2013). One of the most striking, but not sadly surprising findings from the report was the extent to which the Work Programme is failing vulnerable groups such as those with disabilities, the homeless, drug users and the long-term unemployed.
Whilst an important and pressing part of the failure of the Work Programme to support people into work is a simple lack of jobs, vulnerable groups are then further affected by what is known as ‘creaming and parking’.
It wasn’t meant to be like this, though. The Work Programme was meant to have a unique payment by results structure, in which providers only got paid for success and where payment amounts were linked to benefit type - which would encourage a focus on the hardest to help. It was designed to prevent the vulnerable from being left on the side-line, and ensure that those who only needed a gentle ‘push’ or the removal of easy and obvious barriers to employment didn’t get all the attention. So, why isn’t it working?
The most straight forward answer is that benefit type is a crude proxy for level of need, and has led to the creation of a flawed pricing structure. As the Employment Related Services Association (ERSA) and the trade body for Work Programme providers points out in the report, the type of benefit someone claims is not necessarily linked to how close they are to the labour market, or how easy it will be to help them into employment. Of those claiming JSA, 49% of people will have some form of disability. This is exacerbated by the Work Capability Assessment (WCA), which, despite efforts to improve, still has a high rate of incorrectly assessing people as ‘fit to work’.
In order to rectify this issue, the report suggests considering a needs-based differential pricing structure, with prices based on the outcome of an assessment of how close an individual is to the labour market. Alongside the support of disability charities such as Scope, this seems like an idea with potential, and one that has already been tried in Australia in the guise of the Job Seeker Clarification Instrument.
However, many will view a new form of assessment with some trepidation. Many people with disabilities already face several often stressful forms of assessment, most notably the Work Capability Assessment. Whilst the idea of a new additional assessment is potentially good, if implemented, it should be done with care and understanding by learning from previous assessments.
Finally, and although I am in danger of sounding like a broken record, a supply-side intervention will never be enough without more jobs. No matter how much support a person receives, if the jobs aren’t there then the programme will not work- and so the effect of a change to the payment structure of the Work Programme will be limited.