• 9 August 2011
• Types: Press Releases

NESC Publishes New Report

Supports and Services for Unemployed Jobseekers

NESC Report 123

Dublin, Tuesday August 9th — The National Economic and Social Council (NESC) publishes today a detailed study of how people in Ireland are currently supported while unemployed. Its principal messages include:

Reaching all today’s unemployed requires bolder changes in policies

Ireland’s labour market will take years to recover from the massive contraction that has occurred in the economy. Males, young people, low skilled workers and nationals from the recent EU Accession States have borne the brunt of the collapse in employment. Compared to previous recessions, more among the unemployed today have good levels of education, skills, and extensive work experience. The share of total unemployment that is long term is relentlessly rising. Significant groups do not appear on the Live Register, notably the ‘unemployed self-employed’ and people who have exhausted their entitlement to Jobseeker’s Benefit and whose spouses/partners continue to earn. These aspects require changes in approach if supports and services are to reach unemployed people and prevent them being scarred for the rest of their lives by their current unemployment.

Changes are underway. A major institutional reconfiguration for delivering employment services is taking place, access to further education and training for the unemployed is being facilitated in new ways, the capacity for effective activation is being developed and social welfare has been cut in some areas to help pay for the larger bill for unemployment. These responses have been government-led and departmental-driven. The ownership of, and responsibility for implementing, a further wave of changes needs to be more broadly shared. Further changes should also be guided by a long-term vision of what constitutes an effective unemployment regime in a knowledge-based economy, and be imbued with greater empathy and less suspicion towards those who have lost their jobs or the misfortune to be seeking a first one at the present time.

High levels of ambition are needed for the National Employment and Entitlements Service (NEES)

Up to 2008, Ireland’s National Employment Action Plan (NEAP) did not achieve positive outcomes, unlike similar programmes in many other countries. Participation in the NEAP reduced participants’ chances of returning to employment a year later. Much is underway to address the weaknesses in how employment services and social welfare payments were provided up to that time. NEES is an entirely new framework within which a one-stop shop can be provided to unemployed jobseekers where they can receive a more seamless, joined-up, comprehensive and consistent service.

For NEES to achieve its potential, it must – among other things – make a success of merging organisations that had different cultures as well as operating procedures; adopt a strong customer focus; train frontline staff to high levels; foster a performance dialogue across a range of different providers; and ensure health, housing and other services are ‘employment friendly’. NEES must serve all unemployed jobseekers and not just those on the Live Register.

Access to job-placement and career guidance services remain important

Net job creation is not expected to resume until 2012 at the earliest, but a significant number of jobs continue to be filled each month in the Irish economy. Most of these are ‘replacement jobs’; employment services must help ensure that unemployed people can compete for them on a level playing field. Other jobs are in multinational companies that are improving their export performance; employment services should help Irish graduates to increase their share of this employment.

Skills deficits persist during this recession and new deficits are anticipated. A major expansion of adult learning is underway. A satisfactory return on the rising private and public investments being made, requires that the worlds of education, training and work cooperate extremely closely. The work of frontline staff involved in job-placement and career guidance should be informed by quality labour market intelligence. The evidence-base for answering what works best and for whom is still underdeveloped. Staff need to be able to answer with conviction and authority their clients’ questions about the courses of action that will deliver best for them.

Social welfare must serve as a trampoline and not hold people back

Ireland’s levels of income support for people jobless a long time are high by international standards, but not when people first become unemployed. This is because, in the recent past, policy concentrated on using social welfare to reduce poverty and weakened the contributory principle. High replacement rates in the early stages of unemployment make good labour market sense and are consistent with keeping unemployment low in several countries.

A detailed analysis of replacement rates shows that the large majority of claimants on the Live Register face replacement rates that are low. This is because the large majority of claimants are either single people or have spouses/partners still in employment whose earnings are taken into account in the household means-test and reduce the amounts of social welfare paid. Concerns that receipt of secondary payments, and of housing supplements in particular, boost replacement rates apply to only small proportions of those on the Live Register. The best way to protect good payment levels of long-term social assistance is to intensify and improve activation policies.
Error rather than fraud accounts for the greater part of social welfare overpayments. The complexity of Ireland’s social welfare code is a major cause of administrative and claimant error. It is easier to control social welfare fraud when unemployment is low than when it is high. The fiscal crisis puts an added premium on the control of fraud but how controls are tightened should not involve treating everyone on the LR with greater suspicion.

Welfare-to-work or activation strategies can be much improved

Effective welfare-to-work or ‘activation’ strategies involve coordinating and sequencing supports and services in a tailored way for people who have been jobless for a long time, and the recourse to sanctions where people clearly refuse to co-operate. Prior to the crisis, the weakness of Ireland’s activation strategies and the scope for policy to catch-up with best practice in other countries was already apparent. Since the crisis broke, the need has become greater, not less, for improving welfare-to-work or activation strategies.
Activation strategies should help people achieve a sustainable independence from social benefits and not just an early transition from welfare to work. Activation requires attention to two dimensions: (i) ensuring people remain interested in, and committed to, finding a job; and (ii) improving people’s skills and employability. The outcomes sought cannot be engineered by central government acting unilaterally. They require the coordinated and competent engagement of a wide number of actors—state agencies, local government, education and training providers, social partners, the community and voluntary sector, and social welfare recipients themselves. It is important to proceed with as broad agreement as possible on the purpose and methods of effective activation, which include transparent and fair forms of conditionality and recourse to sanctions, i.e., lower payments for a period escalating to their temporary suspension if necessary. Sanctions, however, entail surgical reductions in welfare payments not generalised cuts. There is extensive international evidence that sanctions which are fair, transparent and proportionate improve outcomes, while poverty does not.

Further temporary employment schemes are still needed

More temporary employment schemes are needed at the present time. Periods of employment on projects that result in useful outcomes and which allow unemployed people to use the skills they have while retaining their social welfare support can be beneficial in many instances for individuals and society. The National Internship Programme should be more boldly developed (for example, to raise the extremely poor language skills of Irish graduates) and attain a much higher capacity than the 5,000 places currently envisaged.

The pivotal need is for greater clarity on how further schemes are to be identified and implemented, i.e., for a transparent, inclusive and speedy process. The interaction to date has been strongest between central government and the mainline departments and state bodies directly under its control. This interaction should extend to include the inputs of local government, private enterprise, professional associations, regional bodies and the community and voluntary sector in a stronger and more systematic way. NESC advocates that a Board for Temporary Projects be established for a limited time period. Its membership should be made up of people at the appropriate level in organisations that, collectively, could guarantee (i) a sufficient volume of suitable projects that are sure to be well managed and delivered on, (ii) participation/ employment on terms and conditions that are fair and feasible for unemployed people, and (iii) no additional Exchequer spending other than the ‘transformation’ of what otherwise would have been spent on Jobseeker’s Allowance or other social welfare.

Note to Editors

The National Economic & Social Council (NESC) was established in 1973. Its function is to analyse and report to the Taoiseach on strategic issues relating to the efficient development of the economy, the achievement of social justice and the development of a strategic framework for the conduct of relations and the negotiation of agreements between the government and the social partners. The Council is chaired by the Secretary General of the Department of the Taoiseach. It comprises representative of trade unions, employer bodies, farm organisations, community and voluntary organisations, environmental organisations, key Government departments and has eight independent experts.