You are here:   Home  »  Blog  »  The darker, hidden side of unemployment statistics

The darker, hidden side of unemployment statistics

Posted on: 6th Jan 2016

The government’s claim to have the lowest unemployment figures for years hides a dirty little secret; and actually it’s not at all little.

Festering underclass – ignored by society

There is a festering underclass of people being ignored and left behind by our society. When they talk about lowest unemployment figures for 7 years at 1.77 million they mean Job Seekers Allowance (JSA) claimants. What is rarely, if ever, mentioned are the people on ESA (Employment support allowance – the old disability benefit) or IS (Income Support- essentially lone parents) of whom the most recent Nomis figures say there are 1.3 million, almost doubling what is claimed as unemployment figures.

These are people with “complex and multiple issues” by which the system means they are difficult to handle. What it means in human terms is that typically these people are trapped in a spiral of physical injury or disability which leads to mental health issues which in turn leads to further physical issues and onward in an ever increasing downward spiral.

What is a tragedy is that this group really is not being helped and people on ESA talk about feeling ignored and “being left on the scrap heap”. Because they are on ESA and therefore are not required to attend the JobCentre, they have little contact with JCP staff and little if any support is provided. This means that many people spend many years on ESA. This is a social and economic time bomb. 1.2 million people (and their families  … don’t forget the ripple effect) pretty much left to wallow on benefits with no effective support, typically with their physical and mental health declining or staying at rock bottom. The irony is that we’re not an uncaring society, there is funding and help available, it’s just that we are absolutely failing to deploy support in any useful way to this group.  It’s a social nightmare because there are millions of people in these families living hard, embittered and non-productive lives, instead of being able to support themselves and their families. It’s an economic nightmare because the costs of this group in terms of medical and social benefits are high and remain high year after year.

Potential solutions?

I know about this because I run a small social enterprise that was involved in working with the long term unemployed and ESA claimants. These are not easy groups to work with because they tend to be embittered and battered, carrying a lot of emotional baggage that makes them hard for workers to engage with. However we developed a programme that was really effective in working with these groups. It was a very innovative and unique mixture of psychological and practical approaches that helped people understand themselves and their situation better and make sense of it and feel willing and able to progress. It then connected them with relevant specialists who could help them deal with their specific issues. Our programme was acclaimed by the JCP staff whose claimants we worked with and the claimants themselves. Of 45 people we worked with over a 6 month period, 31% had tangible positive outcomes. Overall we worked with 500 claimants from JSA (mostly long term / ESA / IS) and yet we’ve been forced to stop working in that area now.

Road to nowhere – Flexible support fund

We were largely funded by the DWP’s “flexible support”. One of whose main criteria is innovation. It’s designed not to fund ongoing programmes but to trial things. So having discovered a successful format for really helping long term unemployed and ESA claimants you would think this would then be taken and applied more widely? But no, although it is a fund designed for innovation, there is no mechanism for what to do next. It’s like running a clinical trial, discovering a wonder drug, and then not doing anything with it to produce it or distribute it to patients in need.

Fatal Funding Flaws

The fundamental flaw though was more than just the madness of having a fund for pilot schemes with no follow on mechanism.

The thinking behind the flexible support fund and indeed almost all government funding in this area is based on a twisted concept of payment by results that is deeply flawed.  Now I’m a massive believer in rewarding success and rewarding outputs, not just paying people for showing up and doing a bad job.  So whilst I agree with the principle of payment for results, the application of that principle has become bizarrely warped

As an example, we applied for a grant to work with ESA claimants in a local area. The contract was to work with a group of ESA claimants who, by many measures would look like they were unemployable, with physical and mental health issues. The terms of the contract were to work with 30 claimants and get at least 7 of them (23%) into jobs within the project duration which was 4 months, failure to do this meant not getting paid. We took the risk, applied for it, committed to find the 23% job outcomes and 7 amended applications later were rejected on the grounds of, “not value for money”.  As a fairly typical example of the sort of thing that happens, this is wrong on so many levels it’s difficult to know where to start but I’ll focus on just 3 areas.

This isn’t an article calling for more funding necessarily. We’re all more than aware of the challenges to the public purse.  However, if we spent the money we spend in this area with better targeting, better metrics, and a LOT less bureaucracy we would probably have enough to stop the social and economic nightmare that is happening under our noses.