Sadly, the DWP's press release doesn't mention any of these key points. Nevertheless, one would naturally assume that as a consequence the programme would be redesigned to achieve better outcomes. However, in a Written Statement, the Minister for Employment said:
I am also pleased to announce the Government has decided to expand the Mandatory Work Activity scheme. The expansion will enable Jobcentre Plus to make between 60,000 and 70,000 referrals to Mandatory Work Activity each year, based on the current experience of the scheme, at a cost of an additional £5 million per annum. This decision has been taken as the result of careful consideration of the positive impacts demonstrated within the Impact Assessment.
Unfortunately it is very difficult indeed to reconcile this statement with the impact assessment itself. Before I explain the details, however, I would like to congratulate both DWP Ministers and their officials for performing a detailed impact analysis, subjecting it to outside scrutiny, and publishing the results, even though they are clearly unfavourable. It speaks well of the Department and its continued commitment to evidence-based policy, and contrasts well with the muddle over Work Experience (described here), let alone the continued distortion of data and evidence by the Department for Communities and Local Government.
"NIESR concluded that the methodology was sound, although the nature of the selection process for programme referrals means that it is very difficult to identify truly comparable individuals who were not referred. As a consequence, it is possible that impacts are underestimated. However, subject to this, the key conclusions - that MWA had a small and transitory impact on benefit receipt, and no impact on employment - appear reasonable.
- lots of those referred wouldn't show up for the programme
- there would be a substantial drop in benefit receipt - some of this would be only temporary, but some would be permanent
- there would be little or no impact on employment
And what happened? Well, drop out was indeed very high; only about 55% of those referred to MWA actually started the programme. But the impacts on benefit receipt were disappointing. Among those who did actually start the progamme, there was essentially no impact. And while there was a substantial impact on those who didn't start - as you would expect, given that the programme was compulsory and they could be sanctioned for non-attendance - this was transitory. Overall, the maximum impact was a 5 percentage point reduction in benefit receipt, and only 13 weeks after starting the programme the impact had disappeared completely. On average, someone referred to MWA spent just 4 days less on benefit as a result.
13 weeks after referral, those referred were 3 percentage points more likely to be on ESA. Not to put too fine a point on it, this is a complete policy disaster. ESA claimants are both more expensive and more difficult to get off benefit than JSA claimants. Indeed, the main thrust of welfare-to-work policy under both this government and the previous one has been to try to move ESA claimants closer to the labour market. MWA appears to achieve precisely the opposite. We can only speculate why, although the obvious answer is that the "hassle factor" of being referred to MWA had the unintended consequence of encouraging some claimants to claim a benefit - ESA - where there is not necessarily any obligation to look for work at all. In any case, whatever the explanation, the long-run costs of moving even a few JSA claimants to ESA will clearly outweigh any possible other benefits of the programme.