SMF July 2012 Newsletter

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Social Market Foundation | Newsletter July 2012 |

Newsletter: July 2012

At the end of the Coalition’s second parliamentary year, the stakes for all of the political parties at the 2012 conferences remain high. What to do about the ailing economy remains a source of much debate, whilst tensions within the coalition and the prospect of an autumn reshuffle mean that this year’s party conferences will set the tone for the long run-in to the next General Election for both the governing parties and the Opposition

Throughout the year the SMF has sought to bring clarity and rigour to the debate over our economic future, through hard-hitting research, well-placed commentary and high-profile debates. We were therefore delighted to be named UK Think Tank of the Year and Economic and Financial Think Tank of the Year in the annual Prospect Magazine awards earlier this month. More information about the awards and some photos from the event is on page 4.

In the last newsletter, Ian Mulheirn examined the latest growth figures and showed why a funded stimulus to get the economy growing again should be urgently adopted. In this newsletter Ian Mulheirn looks at the IMF’s latest advice to the UK and argues that time is running out for Government to adopt such a plan.

As the growth problem looks set to generate still more difficult choices about public spending, politicians are turning their attention to where savings can be made next. Responding to Nick Boles MP’s calls to scrap Sure Start, on

page 3 Ryan Shorthouse examines why the right approach is to reform the programme rather than scrap it.

The next parliamentary session will see the roll-out of many of the Government’s flagship initiatives, including Universal Credit. In anticipation of this, the SMF will soon be publishing research into the impact of Universal Credit on low-income households. Concerns abound about whether the IT will work. On page 5 Deputy Director Nigel Keohane gives a sneak preview of this research and asks: what will happen if the planned IT systems do work?

Last week’s fall in unemployment was a rare piece good news about the economy. But with worries about a North-South divide in the labour market persisting, Senior Economist Nida Broughton looks on page 8 at why the picture is more complex than it might first appear.

Page 7 of this newsletter also contains information on our latest publication Britain’s Got Talent, which outlines a comprehensive plan for better linking the provision of adult skills to the demands of the economy. This publication was launched by Skills Minister John Hayes. Details of the SMF’s recent debate series on tax avoidance are on page 9.

Finally, with party conference season just around the corner, there is still time to get involved with the SMF’s programme of debates. Full details are on page 10.

Contents

But what if it does work? Universal Credit and real time information: Dr Nigel Keohane 5

Forthcoming SMF events 6

Skills Minister John Hayes launches SMF skills report 7

Unemployment: As simple as a north/south divide? Nida Broughton 8

Paying Your Dues: SMF event series on tax 9

Party Conferences 2012 10

The marketsquare 11

Welcome to the July newsletter

Don’t scrap Sure Start, Reform it: Ryan Shorthouse 4

SMF scoops top prize at annual Think Tank awards 3

Director’s note: IMF: “A plague on all your houses” 2

www.smf.co.uk




Last week’s IMF country report for the UK had something for everyone in the debate about fiscal policy and growth.

There were two headline conclusions. The first was that evidence from non-Eurozone countries suggests that, in the UK, low Gilt yields are an indicator of weak growth prospects. As Jonathan Portes has long argued, they aren’t a market vote of confidence in the Government’s fiscal strategy. So the benefits of Plan A aren’t nearly as great as the Government likes to claim. Loosening up on Plan A would indeed raise the Government’s cost of borrowing, but only because prospects for growth in the private sector would improve. So much for Plan A fundamentalism.

So Plan B it is then? Well not quite. At the same time as challenging the benefits of Plan A, the report’s second conclusion cast doubt on the gains from easing-up on deficit reduction.

The benefits of slowing the pace of the cuts depend upon your view of how the impact of government spending on output varies with the state of the economy. Does a pound of government spending boost GDP by more when output is below its potential – or in a recession - than it does in normal times? The IMF sets out three scenarios.

First, that the timing of spending makes no difference in the long-run. Plan B would therefore be a prescription for lower-intensity pain for longer, while Plan A is more of a short, sharp shock. But in the long-run, the negative impact on the potential of the UK and its workers would be no different under either plan.

So Plan B it is then? Well not quite. Second, it could be that each pound of spending has more impact when output is below its potential, as it is now. In this case slowing the pace of cuts would be a good idea, saving thousands of people from being permanently disadvantaged in the labour market.

Third, it might be that government spending has its greatest impact when the economy is actually shrinking, and less impact when it’s growing. If slower cuts fed through just as growth picked up, then Plan B might even be worse than Plan A on this view.

So for Plan B to be effective, we need to be in the second of these worlds. And a lot of microeconomic evidence strongly suggests that we are. Yet the IMF casts some doubt on that, citing a study that “finds a weak relationship between the output gap and multipliers in the UK”. For the IMF, if not for most labour market economists, the benefits of Plan B are uncertain for the UK .

The composition of government taxation and spending matters

So we have a situation where Plan B might not cause a panic, but it might also not help. The risks of both plans may be less than their respective opponents claim, but their benefits too may be oversold. So what to do?

In all this discussion of the impact of government spending on output, the IMF, along with most commentators, generally talks in terms of the average effect of government spending. But one thing we know with more certainty is that spending on things like public infrastructure is far more beneficial for output than, say, fiscal incentives for people to lock money away in a pension for 30 years. As I argued in Osborne’s Choice, the composition of government taxation and spending matters far more than most of the macroeconomic debate suggests. That’s why the only way to reduce the damage wrought by a stagnant economy with any certainty is to rejig spending from low- to high-growth areas. And this is an important yet overlooked part of what the IMF proposed last week.

The Fund points out that neither Plan A nor Plan B are free lunches. But in economic terms, a funded stimulus is about the cheapest lunch you can get. The catch is that it takes real political leadership to pull it off. The growth crisis demands nothing less.

Director’s Note: Director’s Note: Director’s Note: Osborne’s alternativeOsborne’s alternativeOsborne’s alternative Ian MulheirnIan MulheirnIan Mulheirn

Director’s note: Director’s note: Director’s note: IMF: ’a plague on both your houses’ IMF: ’a plague on both your houses’ IMF: ’a plague on both your houses’

Ian MulheirnIan MulheirnIan Mulheirn

http://www.imf.org/external/pubs/ft/scr/2012/cr12190.pdf

http://notthetreasuryview.blogspot.co.uk/

http://www.smf.co.uk/research/economic-policy/osborne-s-choice-combining-fiscal-credibility-and-growth/



The Social Market Foundation was named Prospect Magazine's 2012 Think Tank of the Year at the publication's respected annual think tank awards in London earlier this month.

The SMF, which also picked up the Economic and Financial Think Tank of the Year award in a separate category, was commended by judges for the rigour of its research, the high quality of its events and its outstanding and original contribution to the debate on economic growth.

Ian Mulheirn, SMF Director said: "It's a fantastic achievement to be named the top UK think tank by Prospect Magazine. At a time of ongoing economic crisis, the need for robust and creative policy solutions which transcend party politics is essential. These awards are therefore a real endorsement of the SMF's analytical depth, timely policy interventions and our nonpartisan approach."

Mary Ann Sieghart, SMF Chair said: “For a small think tank, the SMF punches well above its weight. These awards are a great tribute to Ian and his staff for their imaginative ideas, media savvy, rigour and sheer hard work.”

The award judges - Sir Richard Lambert, The Right Honourable Baroness Vadera PC, Nader Mousavizadeh, Bronwen Maddox, and James Elwes - commented on the topicality and originality of the SMF’s research programme this year, which included papers outlining an innovative plan for growth, an analysis of the Work Programme, and a solution to the childcare affordability problem. They commended the SMF’s influential contribution to the economic debate, and praised our work for combining “intellectual rigour with an excellent record of attracting big names for events”.

SMF scoops top prize at Prospect SMF scoops top prize at Prospect SMF scoops top prize at Prospect annual Think Tank awards annual Think Tank awards annual Think Tank awards

Some of the SMF team with the two awards (from left to right: Noita Sadler, Communications & Events Officer; Ian Mulheirn , Director; Leonora Merry, Head of Media & External Affairs; Ryan Shorthouse, Researcher). Ian Mulheirn is wearing the “tank top for the top tank” ,


SMF Director Ian Mulheirn receives the UK Think Tank of the Year award from Lord Mandelson at the Royal Society (left)

given each year to the winning think tank (right).

The SMF now joins a distinguished list of previous award winners, including the Institute for Fiscal Studies, the National Institute for Economic and Social Research, the Institute for Government and Policy Exchange.



A lack of growth in the economy is undermining the Government’s aim of eliminating the deficit within this parliament. This has kick-started the debate about where the extra savings will come from after the next election.

Last week, Nick Boles MP – a close ally of the Prime Minister – targeted Sure Start Children’s Centres, the education and health community hubs for new families. Boles claimed the latest evaluation of the programme proved government expenditure on it was “wasted over the last decade”. It is true that the evidence on the value of Sure Start for children’s development is disappointing. But the response should be to reform it, not to scrap it.

The latest report from the National Evaluation of Sure Start (NESS) has measured how families living in a Sure Start area when their children are aged seven perform across 15 different outcomes, compared to a similar population not in a Sure Start area. It shows that the programme has improved two parental outcomes for all families and, in comparison to earlier evaluations this increases to four for workless households. This suggests Children’s Centres responded to early criticisms that they weren’t doing enough to help the hardest-to-reach families.

These improvements for parents are welcome. But what of the other outcomes? Since the quality of parenting is a strong influence on children’s development, you would expect improved parenting outcomes to lead to improved children’s outcomes. But while Foundation Stage Profile results and those at Key Stage One have improved for all children in recent years there is a lack of any observable progress on child outcomes resulting from Sure Start alone. It’s formal childcare, rather than Sure Start centres, which seems to have been a sound investment to improve children’s development.

It may be the case that any positive developmental, social or emotional outcomes for children from Sure Start manifest later in life. As former director of Sure Start Naomi Eisenstadt has stated, “it may just be too early to tell”. But the lack of evidence to date isn’t encouraging.

Does all this mean we should scrap the programme? No. Evidence from the Head Start programme introduced in the US in 1965, which Sure Start is based on, does show positive effects on high-school graduation and propensity to crime. This indicates that Sure Start has the potential to make a huge impact. The challenge therefore is to reform Sure Start so it achieves its potential of demonstrably adding value to children’s development.

When I was working for the Conservative Party in opposition, we believed that paying Sure Start on a results basis could be an effective mechanism for getting practitioners to focus on delivering desirable outcomes. This payment-by-results approach is being trialled at the moment, with the chosen local authorities given their 5% reward payment only when the Sure Start centres in their areas have helped to achieve outcomes such as increased attendance in parenting programmes and improved breastfeeding rates. If the Government wants to see more progress on child outcomes, then the results Children’s Centres are paid on should be more reflective of that. UCL published a report last week suggesting more measurable outcomes that are good indicators of children’s development, such as skill at drawing and copying, and use of spoken and written language.

The evidence from abroad is clear and robust: integrated education, health and welfare services can reap long-term benefits to individuals and the public purse. Politicians shouldn’t despair and axe Sure Start. Rather, it should seek innovative ways of making sure the scheme fulfils its potential.

Don’t scrap Sure Start. Reform it. Don’t scrap Sure Start. Reform it. Don’t scrap Sure Start. Reform it. Ryan Shorthouse, ResearcherRyan Shorthouse, ResearcherRyan Shorthouse, Researcher


http://www.resolutionfoundation.org/media/media/downloads/Nick_Boles_Speech_to_Resolution_Foundation.pdf

http://www.ness.bbk.ac.uk/impact/documents/DFE-RR220.pdf

http://www.guardian.co.uk/commentisfree/2012/jul/12/sure-start-can-work

http://home.uchicago.edu/%7Eludwigj/papers/NYAS-LudwigPhillips-HeadStart-2008.pdf

http://www.education.gov.uk/inthenews/inthenews/a00204812/coalition-government-to-reward-local-authorities-for-improving-childrens-lives

http://www.instituteofhealthequity.org/projects/an-equal-start-improving-outcomes-in-childrens-centres




Much of the discussion on Universal Credit has focused on whether the Real Time Information (RTI) on earnings on which the new assessment is predicated is likely to work. An influential group of MPs has just set out its concerns that this could be become another government IT fiasco.

Little attention, however, has been paid to what would happen if RTI does work. SMF’s research exploring the potential impact of Universal Credit on low income households suggests varied and at times unexpected effects, which throw up significant concerns as well as improvements.

The ambition of the Government’s flagship scheme is to replace the annual assessment of tax credits with a rolling monthly assessment. This would allow the Government to calculate the earnings of a household every month – by accessing its PAYE records – and to adjust its Universal Credit payment up or down accordingly.

Theoretically, this could have four positive outcomes: households would have to fill fewer forms; earners would feel the benefit immediately of working more hours and would see that ‘work pays’; households whose income fluctuates seasonally over the year would see fewer peaks and troughs; and, the much-reported problem of overpayments and underpayments could be rectified.

Many of our research participants thought there was much to applaud in the concept. In particular, claimants welcomed a resolution to the problem of overpayments. As one of our households noted,

“we always get to the end of the year and it’s always a nightmare because we either owe them or they owe us.”

However, concerns were also registered. In the first place, views varied markedly across households as to the advantages of the UC payment fluctuating month by month. Some felt it would help them by boosting income in months when earnings from work were lower; but, others put a higher value on the certainty of a fixed UC income which could be diverted to specific expenditure or kept back as a contingency. Such individuals worried that the new system would destabilise their household budgeting.

Second, despite recognising that they could be overall better-off working more hours, some saw the rolling assessment as a disincentive to do overtime.

“I don’t think I’d bother trying to put more overtime because at the moment, I try and do as much as I can but I just think… I just think it would be disheartening…. even if you say, you know, that if you had a good month you would be left with a bit more, I still don’t think I’d put that extra effort in.”

Rationally, this does not appear to make sense. However, the response probably stems from what behavioural economists term ‘loss aversion’, with individuals attaching greater value to the benefits ‘lost’ than the earnings ‘gained’. And, as the most perceptive respondents noted, this system would abolish the current earnings disregard, which means that households can keep the first £10,000 of additional earnings that they bring in without losing any tax credits.

Finally, households will have their earnings assessed every month, but they will also be paid monthly payment in arrears. Even on the most optimistic assumptions about the success of the RTI system this could have significant ramifications. Someone on a weekly wage who is subsequently made redundant could face a month waiting for their revised benefit payment. Many would have little alternative but to go into debt, with all the potential consequences that can entail. Therefore, considerable thought will have to be given so that all those who may find themselves in this predicament can access early financial support through DWP loans or advances.

So, we can’t leave it all up to the

Dr Nigel Keohane is the author of the SMF’s research on the impact of Universal Credit on the financial habits of low income households, to be published in the autumn.

But what if it does work? But what if it does work? Universal Credit and real time informationUniversal Credit and real time information

Dr Nigel Keohane, Deputy DirectorDr Nigel Keohane, Deputy Director

computer – even if we do get that right.

Universal Credit and real time informationDr Nigel Keohane, Deputy Director

But what if it does work?

http://www.telegraph.co.uk/technology/news/9396083/Universal-Credit-benefit-reforms-threatened-by-IT-system.html

http://www.appgtaxation.org/PAYE_at_the_Crossroads.pdf




Forthcoming SMF eventsForthcoming SMF eventsForthcoming SMF events

SMF Chalk + Talk: Professor Chris Husbands - improving the quality of teaching SMF, 11 Tufton Street, SW1P 3QB | 12.30pm

Chris Husbands, Professor of Education and Director of the Institute for Education will look at research into teaching quality and what policymakers can do to raise standards. Contact: [email protected] / 0207 227 4410

Kindly supported by

SMF Chalk + Talk: Paul Corrigan - reforming the NHS SMF, 11 Tufton Street, SW1P 3QB | 12.30pm

Paul Corrigan CBE, Director of Strategy and Commissioning of the NHS London Strategic Health Authority will look at barriers to reforming the NHS and what can be done about them Contact: [email protected] / 0207 227 4410

Kindly supported by

SMF fringe debates at the Liberal Democrat Party Conference Brighton

The SMF will be running fringe events at the Liberal Democrat Party Conference on topics from welfare reform to pensions auto-enrolment. A full programme will be available in the SMF’s September conference newsletter. In the meantime contact [email protected] for more information

SMF fringe debates at the Labour Party Conference Manchester

The SMF will be running fringe events at the Labour Party Conference on topics from education reform to localism A full programme will be available in the SMF’s September conference newsletter. In the meantime contact [email protected] for more information

SMF fringe debates at the Conservative Party Conference Birmingham

The SMF will be running fringe events at the Conservative Party Conference on topics from higher education to financial services. A full programme will be available in the SMF’s September conference newsletter. In the meantime contact [email protected] for more information




Skills Minister John Hayes speaks at Skills Minister John Hayes speaks at Skills Minister John Hayes speaks at SMF report launchSMF report launchSMF report launch

SMF publication

Skills Minister John Hayes MP spoke at the SMF earlier this month as part of an event to launch the Foundation’s latest research paper on adult skills.

The Minister welcomed the SMF’s focus on the need to create a genuinely demand led system in further education, acknowledging that this has been a perennially difficult goal for successive governments.

John Hayes spoke about the real need to uncover the latent talent in the UK workforce, citing the unprecedented demand for apprenticeships as evidence of the potential in the economy.

The keynote speech was followed by a panel discussion featuring contributions from the report’s author John Springford, independent FE consultant Geoff Stanton, Colin Geering, Head of Skills at Knowsley Metropolitan Borough Council. The report and publication were sponsored by the City and Guilds Centre for Skills Development.

Britain’s Got Talent: Unlocking the demand for skills

By John Springford and Ian Mulheirn

The UK suffers from a chronic skills deficit and the current economic crisis is compounding long-standing problems for low-skilled workers. The skills policies of successive governments have focused on subsidising employers or individuals to train. But this has simply led some employers to get free training they would have conducted anyway, and learners to take courses that are of no or limited value in the wider economy.

Bureaucratic remedies have failed to resolve these problems. This is costly for government, unhelpful for employers, and bad for learners whose efforts to achieve sustainable and good quality employment are too often in vain.

This paper makes the case for an entirely new approach using market signals – employment rates and wage levels - to identify and serve the demand for skills. The SMF’s model puts Further Education colleges in the driving seat empowering them and rewarding them for giving employers the skilled staff they need and boosting the productivity of the UK workforce.

http://www.smf.co.uk/research/category-two/britain-s-got-talent-unlocking-the-demand-for-skills/

www.smf.co.uk │@smfthinktank

Social Market Foundation, 11 Tufton Street,



It is often said that there is a North/South divide In England in terms of jobs and employment. In anticipation of last week’s official unemployment statistics, the Telegraph reported that the north was being hit hard by joblessness.

But a quick look at the figures shows that things are actually

a bit more complex than that. The chart below shows the

latest unemployment figures from the ONS. The North East,

North West and Yorkshire & The Humber all have

unemployment rates above the England average. But so

does London, in contrast to the rest of the South-East.

Looking in more detail at unemployment rates by age, it is

clear that different areas experience different types of

unemployment. For example, London has the second

highest level of unemployment among 16-17 year-olds,

followed by the East Midlands. Among older age groups,

such as the over-35s, London actually does worse than

most other regions.

There are a number of reasons why London differs from the

rest of the South-East. These include a relatively high

proportion of the types of population groups that are more

at risk of labour market exclusion, such as lone parents.

Those at the younger end of the spectrum and those with

low skills can be at a particular disadvantage in London,

because the city’s attractions often mean that competition

for entry level jobs is fierce – which could explain the high

unemployment rate among 16-17 year olds in particular.

More broadly, unemployment rates across different regions

generally relate to the types of groups who live there. This

means that even within regions, there are likely to be

substantial differences, such as between inner-cities,

suburban and rural areas.

This highlights the need for tailored approaches to getting

the unemployed working again, with providers that are

focused on the specific needs of types of unemployed

people in their local areas. The Work

Programme, which devolves

decision-making to individual

providers, can go a long way to

meeting this need. But unless

resources better reflect population

needs, unemployment disparities

will persist.

Unemployment: As simple as a Unemployment: As simple as a Unemployment: As simple as a North/South divide?North/South divide?North/South divide?

Nida Broughton Nida Broughton Nida Broughton

Senior EconomistSenior EconomistSenior Economist

http://www.telegraph.co.uk/finance/jobs/9406647/North-South-divide-on-jobs-as-UK-braced-for-unemployment-figures.html




With the public finances in a mess and slow economic growth dominating the news, ensuring the effective collection of taxes from both business and individuals has become a priority for Government.

At the Budget, George Osborne described personal tax avoidance as “morally repugnant” and announced the Treasury’s plan to introduce a General Anti-Avoidance Rule.

At the same time, tax avoidance has rarely been out of the headlines. HMRC’s implementation of retrospective legislation to prevent tax avoidance activities by Barclays has put the issue of corporate tax avoidance back in the spotlight, and The Times’ high-profile investigation into personal tax avoiders, such as Jimmy Carr, brought the issue to the forefront of mainstream debate.

Against this backdrop, the SMF held three breakfast roundtable events, sponsored by SICPA, to discuss the issues of business, excise and personal taxation.

With speakers including Michael Meacher MP (who has recently published a Private Members Bill on tax avoidance), Vanessa Houlder of the Financial Times, Judith Nott of HMRC, Paul Keane of the National Audit Office, and Evan

Harris, the sessions provoked lively debate. Key questions examined included:

• Will a simplified tax system work better for businesses, individuals and the Government?

• Does retrospective legislation create unacceptable levels of uncertainty for business? Or is retrospective action the price they pay for illegitimate avoidance behaviours?

• How can HMRC ensure it collects all of the excise duty it is owed on goods such as tobacco and alcohol?

• What is the dividing line between legitimate and illegitimate personal tax avoidance?

• Can Government ever really ensure that people and business pay their dues?

Paying Your Dues: SMF roundtable series on Paying Your Dues: SMF roundtable series on Paying Your Dues: SMF roundtable series on

tax evasion and avoidancetax evasion and avoidancetax evasion and avoidance

Chas-Roy Chowdury of ACCA and Dr Jamie Whyte discuss personal tax avoidance (above); Evan Davies listens to the debate (right)




Party Conferences 2012Party Conferences 2012Party Conferences 2012

At the half way point of the electoral cycle, this year’s party conference season will be a crucial opportunity to reflect on the Coalition Government’s record so far and to contribute to the developing policy agenda.

The Olympics and the Queen’s Diamond Jubilee will place Britain firmly in the international spotlight this year. But, with the UK now officially back in recession, rising dissent over the Government’s reform agenda in areas from health to welfare, and uncertainty over the future of the Eurozone, will 2012 be remembered for very different reasons?

The SMF will be at the centre of some of the most relevant policy discussions and debates at this year’s conferences. You can get involved in this through following our live party conference blog and Twitter updates, attending a debate, or by partnering with us.

We have been running successful and highly respected fringe events at the major political party conferences for over a decade. Our debates involve high profile speakers and address topical policy issues.

This, coupled with our independent, cross-party approach, makes us an excellent choice for any organisation wishing to engage intelligently and constructively in the issues facing policymakers, politicians and the public at this crucial time.

To discuss ways that you can work with the SMF, please contact our dedicated party conference manager, Rachel Baker on 020 7227 4404 or [email protected].




The Market SquareThe Market SquareThe Market Square www.smf.co.uk/marketsquarewww.smf.co.uk/marketsquarewww.smf.co.uk/marketsquare

A market square is a social hub where people come together to trade goods and chew the fat. The SMF's Market Square is an ideas exchange, where the SMF team blog about the latest issues and test out new thinking.

Get involved in the discussion by commenting on posts, voting on our ideas, and sharing through social media.

Reading the latest Work Programme numbers

Ian Mulheirn : 9 July 2012

The Department for Work and Pensions (DWP) has today thrown another statistical cat among the Work Programme pigeons by releasing some new data on how the scheme is going. The figures show that 24% of people who joined the scheme in June 2011 have been off benefits for at least three months. But, as avid Work Programme watchers will know, a close exegesis of numbers relating to the scheme tends to reveal that their true meaning is much less clear than it might first appear. Today’s measure of its performance – the number of people off benefits for three months – is different to that by which providers will be paid. To achieve an outcome payment for a Jobseeker’s Allowance (JSA) claimant over 25 years old, for example, providers need to get the person into a job that lasts for six months.

Focusing on the “off-benefit” part of the DWP figures, unfortunately being off-benefit isn’t the same as being in employment. In fact Office for National Statistics (ONS) data suggests that there’s a big divergence between the two figures. Administrative JSA claimant data shows that there are a number of destinations for people coming off JSA – failing to sign on, moving abroad, moving onto ESA, and a large number of people simply disappear from the figures untraced. In fact, only around 46% of people who moved off long-term JSA between March and May 2012 went into work with certainty (see pie chart below). Of those who moved off JSA and didn’t go onto another benefit, the into work proportion is 50%. Around one in five of those moving off benefits fall into the ‘unknown destination’ group, so it could be that many of

them are going onto work. But whichever way you look at it, the off-benefit figure doesn’t look like a very good barometer for three-month sustained jobs.

That leaves the 24% figure from today’s figures looking less positive than it might at first appear. Twenty-four per cent three-month job outcomes would be a very solid performance, giving real reasons to be positive about the scheme’s success, especially given that comparable figures for Labour’s Flexible New Deal were about 19% into 3 months’ continuous employment. Unfortunately that’s not quite what today’s figure means. As it is, we may have to wait for several more months – and possibly a reconfigured Work Programme – for that kind of news.

Also on the Market Square:

Adult skills training: not up to the job - John Springford A Work Programme designed in a boom can't cope with the bust - Ian Mulheirn

Credit confusion Nida Broughton Why rich pensioners’ benefits should be scrapped - Ian Mulheirn

http://www.smf.co.uk/index.php/marketsquare/john-springford/adult-skills-training-not-up-to-the-job/

http://www.smf.co.uk/index.php/marketsquare/posts-by-ian-mulheirn/a-work-programme-designed-in-a-boom-cant-cope-with-the-bust/

http://www.smf.co.uk/marketsquare/posts-by-ian-mulheirn/why-rich-pensioners-benefits-should-be-scrapped/

SMF July 2012 Newsletter

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Transcript of SMF July 2012 Newsletter