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This publication is available at https://www.gov.uk/government/publications/government-response-ssac-report-on-in-work-progression-and-universal-credit/dwp-response-to-ssac-report-on-in-work-progression-and-universal-credit-government-response
1. The government welcomes this report and the recognition within it of the work already underway to establish the best approaches to supporting low paid workers in receipt of Universal Credit to progress and earn more. DWP would like to thank the committee for their helpful considerations.
2. Supporting people in work to increase their earnings is innovative, and despite a good deal of progress in developing the evidence, DWP is still at a relatively early stage in understanding what works. The committee rightly sets out the need to do more, and to test a wider range of approaches, and the funding committed in Autumn Budget 2017 (£8 million over 4 years) provides the opportunity to do so. Many of the areas the committee identifies for further work are consistent with the department’s own thinking and where work is already planned or underway.
3. The government’s response to the report’s recommendations is set out below.
Test a much broader range of interventions, including those identified by work coaches in local jobcentres for the full range of working claimants.
The expectation of their ‘test and learn’ approach is that DWP will look widely at ways to support people to progress. DWP has recently published findings from 3 small proof of concept tests, Evaluation of GOALS UK’s Step Up, and Timewise Foundation’s Earnings Progression and Flexible Career Pathways in Retail, which help to increase the department’s understanding of in-work progression from both employee-facing and employer-facing perspectives. The findings from the large-scale Randomised Control Trial (RCT) are due in summer 2018. DWP wants to build on these trials, and the Autumn Budget 2017 committed £8 million over 4 years from 2018-19 to further develop the evidence base. DWP will be working in partnership with organisations both inside and outside government to develop evidence about what works to help people earn more and progress in work. DWP has already had an initial discussion with SSAC on the early planning for this. This will include building on the experience of work coaches and others in Jobcentre Plus. Over the next 4 years DWP anticipates delivering a multi-faceted suite of tests and trials to help them better understand the best ways of supporting individuals to progress.
Establish a formal evaluation framework that enables jobcentres to carry out this testing while drawing on the department’s central analytical capacity and its access to high quality data to ensure rigorous evaluation.
The approach outlined in this recommendation broadly reflects that taken in the development of the current IWP RCT, where an initial call for ideas was followed by limited testing using a proof of concept test. The evidence from this testing was used to develop the full-scale IWP RCT, which is currently being delivered. As appropriate, DWP will continue to use this approach. Our expectation is that over the next 4 years, DWP will deliver a range of small projects at proof of concept scale. This will be supplemented by larger trials delivering approaches evidenced as successful in the proof of concept testing.
Quickly develop an in-depth understanding of current in-work tax credit claimants and their prospects for advancement in hours and/or pay, to feed into the plan for the migration of tax credit claimants to Universal Credit.
DWP agrees with the committee on the need to develop an understanding of in-work tax credit claimants. DWP recognises that the existing RCT tests a relatively early cohort of in-work UC claimants and that there is more to do to understand the situations, barriers and support needs of future cohorts, including those who will migrate to Universal Credit from tax credits.
DWP will continue to consider what can be done to improve the department’s understanding of claimants, including those currently in receipt of tax credits.
Adopt a data driven approach to support segmentation, for example segment Universal Credit claimants for the best form of support using a range of personal and, potentially, psychometric data.
DWP agrees with the committee about the importance of using data to deliver an effective and well-targeted service. The scale of the existing RCT is such that DWP should be able to gather a good deal of evidence about the needs of different groups within the in-work population and about the impacts of the interventions being tested for different groups. The evidence will also identify where there is a need for additional analysis, research and trialling to improve DWP’s understanding of their needs and what support may help their progression journey. DWP is looking at a range of approaches to segmentation and, as part of this, will consider whether there is the potential for the practical application of psychometric data and its effectiveness.
Urgently identify and tackle some of the operational complexities that can present obstacles to in-work progression.
The committee identified some challenges faced by DWP operational staff; work coaches and service centre colleagues in particular. DWP is making improvements to the Universal Credit Full Service all the time, including recently adding functionality to upload self-employed earnings online. Further enhancements, including functionality to upload of childcare costs online, are rolling out soon. DWP will continue to monitor the experience of claimants and examine how any difficulties may be addressed. Part of DWP’s programme of activity as they develop interventions to support people to progress is necessarily to also support their work coaches to ensure that they are able to effectively deliver this support.
Develop a better ‘it pays to progress’ calculator, in which work coaches and claimants have confidence.
DWP agrees with the committee that the department needs to support claimants to make informed decisions that impact their financial circumstances when making choices on progression options. DWP has just introduced a series of calculators designed to support work coaches and claimants to assess the impact of extra work on claimants’ benefits. The calculators are available on GOV.UK.
Clarify policy in a number of areas – for example on the variety of circumstances where claimants are working part time in order to study, re-train, or pursue other interests – so that work coaches are able to exercise their discretion with a measure of consistency.
This recommendation is also welcomed; DWP’s extensive current and future test and learn approach will help to address this further. The IWP RCT and evidence from other trials, will help DWP to understand the possible parameters of work coach discretion and what DWP guidance may be required to manage the exercise of that discretion, should they introduce in-work conditionality in the future. Part of DWP’s programme of activity as the department develops interventions to support people to progress, is to ensure their work coaches have the training and skills required to deliver in-work support and exercise their discretion effectively.