Centre for Economic and Social Inclusion, Welfare to Work Event

Speech by Chris Grayling MP.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
The Rt Hon Chris Grayling MP

The Work Programme

Good morning.

In my previous role as Shadow Minister for Merseyside I have had plenty of opportunity to visit this area over the last three years.

Much of my time here has been spent with some of the voluntary and third sector organisations that work so tirelessly to improve people’s lives.

Each time I have visited I have been struck by the enthusiasm and dedication of people in this area, the drive they have to really get involved in their communities and make things happen.

The employment rate in Liverpool is just over 60 per cent, well below the national average - as the new Minister for Employment I look forward to making further visits here to support the growth of employment opportunities.

In fact, this is the second time I have been to Liverpool in recent weeks. My first visit was to the north of the city, to Everton. I went to the Jobcentre, met some people at the West Everton community centre and visited Goodison Park.

And there I met a group of young men taking part in a scheme called Premier League into Work, a back to work programme that uses the hook of football to get people involved.

This was a group of fit, healthy, enthusiastic young men looking for a role in life.

The programme is a good one, but these boys didn’t need the pull of football to keep them interested - one of them described it as a “bonus”.

What they need, what they are desperate for, is simply something to do.

This tragedy of wasted potential is something I have seen again and again particularly in our cities.

Just a short journey from the prosperous centres there are whole areas, whole streets, whole families out of work.

It is like a glass wall has been put up around them and they can’t get out. On the other side is a decent education, training, jobs but they can’t reach it.

Many of them, still only in their late teens or early twenties, had been churned round and round the system through various schemes, New Deals, and now Future Jobs Fund but at the end of it there’s nothing. They just get back on the welfare merry go-round and start all over again.

But unemployment and a lack of money is just one aspect of poverty. In areas of endemic worklessness there are also higher levels of family breakdown, of addiction and crime, of debt and benefit dependency.

All of these elements are part of that glass wall, they merge together to form an impenitrable, invisible barrier.

That’s what we are up against today.

In the Coalition agreement we made a promise to people that we would encourage a strong, fair, responsible society.

A society without those glass walls.

One which supports and protects the poorest and most vulnerable.

One which respects the investment taxpayers make and spends that money wisely.

In welfare this means radical reform.

It means replacing current welfare programmes with an integrated Work Programme.

It means reforming benefits to make work pay and be seen to pay.

It means a vastly different approach which sees worklessness in its true context.

Worklessness creates intergenerational cycles of disadvantage, it is a root cause of poverty and leads to a tragic waste of human potential.

Every year the benefits bill grows and more and more people are pushed out to the margins by the very system that is supposed to support them.

With every year that passes it becomes harder and harder for them to get back.

We have moved swiftly to start implementing the promises we made in the Coalition agreement.

I’d like to outline for you this morning our latest thinking and the timetable for delivery.

Our key aim is to establish a system of employment support that treats people with the dignity they deserve.

We want to provide a clear route back to work.

We want to involve the best of the public, private and voluntary sector.

We want a system that’s fair to unemployed people and fair to the taxpayer.

This commitment to fairness is at the heart of our approach.

We must strike a balance between supporting people to find and keep work and asking more of people claiming benefits.

And we must find the right balance between the welfare state as a safety net and a benefits system that sends out a clear message: if you can work, you must work.

To make the system truly fair we have to look at employment support in the context of the benefits system.

Too often the combined impact of benefits lost and taxation means that work does not pay for the poorest.

Too often the rules and regulations mean that the positives of taking a job are not worth the risk of losing all your benefits, and the hassle of trying to get them back if it doesn’t work out.

For some people, the move from welfare into work means they face losing more than 95 pence for every additional £1 they earn.

We must ensure that as we work hard to support people back into employment that the benefits system is not the final barrier to them taking a job.

That’s why we have asked Lord Freud, who will be speaking to you later, to urgently investigate ways to make work pay and ensure the transition from benefits into work is a smooth one.

Now, turning to the journey back to work and employment support.

As announced in the Coalition Agreement we will radically simplify the back to work system by replacing it with the new Work Programme.

The Work Programme will provide a coherent package of support for people out of work, regardless of the barriers they face or the benefits they claim.

But this is not a one-size fits all scheme.

The Work Programme will not be like the old style, centrally designed, over engineered welfare to work programmes.

We will look to investors from the private, public and voluntary sectors to provide this support.

We will not dictate the shape of this support but will judge organisations, many of whom are represented here today, on their success rate.

And success will be measured against the key goal of sustained employment.

Beyond that crucial outcome we will not dictate to you - the experts - how to do your job.

We will let you decide the best possible approach for each person.

Giving you the freedom to provide a truly flexible service, tailored to the needs of the individuals.

Private, public and voluntary sector organisations are crucial to our planned reforms.

You have the knowledge and expertise to deliver the kind of specialist support we need.

We plan to procure this support through a commercial framework arrangement.

This week we have released an advert setting out the parameters of that framework and encouraging private, public and voluntary sector organisations to bid to be part of the new world of welfare provision.

We have advertised nine regional lots plus Scotland and Wales, with a small number of valuable contracts available in each region. Groups can bid for as many or as few regions as they wish.

We envisage, particularly smaller, more specialist groups will need to form consortia to be large enough to prove they have the capital and the ability to deliver these much larger contracts.

We want to encourage these consortia, and the involvement of voluntary sector organisations in the delivery of the Work Programme. As I began my speech by saying it is often the localised, specialised voluntary services that can make the biggest change to people’s lives - particularly those with complex situations and multiple barriers that prevent them from returning to work.

By November we hope to have the framework established.

Once in the framework organisations will compete to supply employment support. The first contracts will be awarded early in the New Year and the Work Programme will begin to roll out in the spring.

It’s a tight timetable. We will all need to work together to deliver.

Lord Freud and I are keen that Government and industry keep talking to each other throughout this process.

That is why we held a provider briefing event within a couple of weeks of taking office, and why some of you were in my office on Tuesday for a roundtable and in part that’s why you have both of us at the conference today.

We want to keep this conversation going throughout the contracting process so we’ll set up an online ideas exchange to encourage full and frank discussion.

We have a lot invested in the success of the Work Programme, but so do you.

The framework arrangement means we will be able to let larger, longer contracts, encouraging greater investment and creating the circumstances for a proper rate of return for investors.

We are currently working on plans to ensure the harder to help, those with the most barriers, are as profitable for welfare providers as those closer to the labour market.

It has always been our intention to use the savings we make from moving someone off benefits to pay providers.

But let me be clear, those payments will be made on the basis of achieving sustainable employment over a meaningful period of time. We will measure by success and pay by success. 

We have also clear made our plans to re-assess people on incapacity benefits.

We know not everyone in that group is able to work.

And not everyone will be expected to work.

For very sick and disabled people we are committed to providing unconditional support.

But there are people in that group who are fit enough to work, indeed want to work, but have been written off by a passive welfare system.

With our help they can begin to take the first steps towards sustainable employment, through the Work Programme.

We are keen to get going on this reassessment.

People have been allowed to linger on this benefit for too long.

Around a quarter of the 2.6 million people claiming incapacity benefits have been claiming for more than 12 years. This is a devastating legacy to inherit.

So, in the autumn we will make a start. People claiming incapacity benefits in Burnley and Aberdeen will be required to go for a Work Capability Assessment. The rest of the country will follow, with assessments taking place when the normal benefit review comes up, in every town and every city throughout Britain.

This package of reforms is not just about getting people into a job.

It’s about setting people on the road to sustainable work. Work that pays.

The new Work Programme will be an improvement on the current offer. It will deliver long-lasting tailored support.

We are taking the first steps towards developing a package of support that includes a simplified benefits system that works along side personalised back to work provision to support people into sustained employment.

Our approach will bring about transformational change in the benefits system, helping people leave benefits and work towards a better quality of life for themselves and their families.

This is an exciting time for the welfare sector. This is an exciting time for those of us involved in providing welfare. I hope you are as anxious as I am to get started and start to make a real difference.

Published 1 July 2010