16 November 2007
More than 40% of benefit claimants who enter work are back on the dole within six months, auditors have reported, casting doubt on ministers' plans to get millions more people into sustainable employment.
A National Audit Office study of employment programmes, published on November 14, also reveals that a quarter of Jobseeker's Allowance recipients become repeat claimants within the 13-week threshold deemed to be 'long-term' employment.
The report is a blow to a government that has set an ambitious 80% employment target for people of working age, which would raise UK productivity and tackle rising poverty rates.
Edward Leigh, Conservative chair of the Commons' Public Accounts Committee, said it was 'shattering to realise that the percentage of people looking for jobs who make repeat claims for benefits has remained unchanged since the early 1980s'.
The NAO reports that, following substantial investment in programmes such as the New Deal, many government initiatives to help unemployed people find work 'are having a real impact'.
But Sustainable employment warns: 'Too many people… cycle between work and benefits.'
The incentive to cut the number of repeat claimants is sizable: auditors estimate that halving the time repeat claimants spend on benefits would save £520m annually.
But the incentives are not simply financial. 'Improving job retention is essential if the government is to meet objectives on child poverty and employment rate targets,' the auditors add.
Sir John Bourn, head of the NAO, said: 'The Department for Work and Pensions and the Department for Innovation, Universities and Skills need to work together and to join up local initiatives with local action so that people are not just helped into work, but stay in work.'
Many problems faced by claimants stem from their low skill levels, which often means that they can find only temporary work.
The Department for Work and Pensions published a green paper this summer, aimed at tackling such problems, and labour force figures published on November 14 show that employment increased by 69,000 in the third quarter of 2007 – to 29.2 million.
Welfare reform minister Caroline Flint said: 'The NAO's report recognises the progress we have made in supporting unemployed people back into work, slashing the number collecting Jobseeker's Allowance in half since 1997.
'However, we are not complacent. With more than 600,000 vacancies in the UK we need to… ensure that people have the right skills and attitude to find work and stay in work.'
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