1 Active Labour Market Policies in the UK – What lessons can be learned from the British Experience? Helen Bache UK Department for Work and Pensions CICERO.

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“Active Labour Market Policies in the UK – What lessons can be learned from

the British Experience?”

Helen Bache

UK Department for Work and Pensions

CICERO FOUNDATION

PARIS, 23 FEBRUARY 2006

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WHAT HAVE WE DONE?

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Employment Rate

62

64

66

68

70

72

74

76

78

Perc

enta

ge o

f Wor

king

Age

Pop

ulat

ion

(%)

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Comparing the UK with the EU:

UK EU

Employment Rate 71.6% 63.3%

Men 77.8% 70.9%

Women 65.6% 55.7%

Older 56.2% 41.0%

Unemployment Rate 4.7% 9%

Women 4.2% 10.2%

Youth 12.1% 18.7%

Long Term 1.0% 4.1%

Source: Employment in Europe 2005, Eurostat

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Wider International Comparison

Source: OECD

0

10

20

30

40

50

60

70

80

Pe

rce

nta

ge

Em

plo

ye

d

0

2

4

6

8

10

12

Pe

rce

nta

ge

Un

em

plo

ye

d

Employment 2004 Unemployment 2004

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HOW HAVE WE DONE IT?

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Success in the labour market is built on solid foundations

• Macroeconomic Stability

• Flexibility and diversity

• Making work pay

• Active Labour Market Policies– Jobcentre Plus – New Deals

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Macroeconomic stability

• Macroeconomic stability is the platform from which countries can achieve high levels of employment.

• The new macroeconomic framework introduced since 1997 has delivered stability and growth in the UK – creating the right kind of environment for employment to flourish.

• A stable economy is necessary for high levels of employment, but not sufficient.

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Flexibility and diversity

United Kingdom

0%

10%

20%

30%

40%

50%

60%

0 20-24 36 40 44

Germany

0%

10%

20%

30%

40%

50%

60%

0 20-24 36 40 44

France

0%

10%

20%

30%

40%

50%

60%

0 20-24 36 40 44Italy

0%

10%

20%

30%

40%

50%

60%

0 20-24 36 40 44

11 % work40 hours

29% work40 hours

11% work39 hours

39% work40 hours

10

Part Time Workers

8%

74%

2%

16%

Could Not Find a Full Time Job Did Not Want a Full Time Job

Ill or Disabled Student or at School

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Making work pay

• Work incentives are important to make it worthwhile for individuals to participate in the labour market, particularly for those on low incomes.

• The Government strategy to make work pay is designed to tackle the unemployment trap and the poverty trap.

• Reforms to income tax and National Insurance Contributions and the introduction of the National Minimum Wage and tax credits improve incentives to work for low income households.

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Active Labour Market Policies

• Jobseeker’s Allowance– Rights & Responsibility agenda– Assisted job search– Increased help as duration increases

• New Deal– Ends long term unemployment– Gateway to training/retraining– No other option

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Modern Jobcentre Plus services

Self-service and face to face advice brought together

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RESULTS

• Around 60% of unemployment benefit claimants leave the register within 3 months

• Around 80% leave within 6 months

• Around 90% leave within 9 months

• Around 95% leave within a year

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Jobseekers Allowance Caseload Over 1 Year

0

100

200

300

400

500

600

700

1997

1998

1999

2000

2001

2002

2003

2004

2005 De

c

Aged 18-24 on JSA over 1 yr

All Ages on JSA over 1 yr

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MAIN SUCCESSES

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Key success factors

• Jobcentre Plus – single point of delivery for benefits and help into work

• Compulsory work focussed interviews and specially trained advisers

• Something for something – rights and responsibilities

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Future challenges

• Our 5 year strategy, published earlier this year, set out our long-term aspiration to increase our employment rate to 80%.

• If we are to meet our aspiration of an 80% employment rate, we would need to increase the number of people in employment by around 2.5 million.

• 5 year strategy and Green Paper are available on our website at www.dwp.gov.uk

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ANY QUESTIONS?