20 October 2006
Plans to increase benefit payments to single parents seeking work will have a limited impact because little is being done to keep them in the labour market, a former welfare minister has warned.
Chris Pond, now chief executive of the pressure group One Parent Families, told Public Finance that the new Work Related Activity Premium (Wrap) could be successful in the long term only if it were accompanied by additional in-work childcare support within the government's welfare-to-work package.
Welfare reform minister Jim Murphy announced last week that the Wrap, an additional £20 weekly benefit payment to parents actively seeking to enter the labour market, will be piloted across seven local authorities during 2007.
The scheme, which could push the government towards its ambitious lone parent employment and child poverty reduction targets, involves extensive use of bespoke employment advisers at Jobcentre Plus offices and could later be rolled out nationally.
But Pond said that he was concerned that the six-month payments were being offered only to parents with a child aged 11 or over.
'Around 66% of such single parents are already in work – so it is not going to help greatly against the [government's] 70% employment target,' Pond said. 'So we need, as we move beyond the pilot stage, to see how we can extend that sort of incentive and help to a lot more lone parents.'
Pond told a conference in London that he was also concerned that little of the welfare-to-work package had focused on keeping single parents in employment.
'We've reached the stage where job entry rates for lone parents have converged with those of other parents. Given the barriers that many lone parents face, that's tremendous. But it's not going to help you achieve the 70% [employment] target.
'To do that you have to stop people leaving work, and the job exit rate for lone parents is still twice as high as the exit rates for… the wider workforce. A third of people leave their jobs when they become a lone parent,' he warned.
Pond believes that if the Department for Work and Pensions could get job exit rates for lone parents down to the national average, the government would achieve its employment target and get close to its child poverty aims.
Murphy said that Wrap would be available in seven areas from April: Edinburgh, Lothian and Borders, Bradford, Sandwell and Dudley, Leicestershire, north London, southeast London and South Wales.
'Nine out of ten lone parents say they want to work, either now or in the future,' Murphy said. 'Wrap will enable us to test if the extra financial assistance will encourage lone parents… to actively take steps back into the workplace,' he said.
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