Review of New Deal 25+

Report to the Assembly by the Comptroller and Auditor General for Northern Ireland (NIA 111/08-09)

13th May 2009 Mr John Dowdall CB, Comptroller and Auditor General, reported today on his review of the Department for Employment and Learning’s New Deal 25+, a ‘welfare to work’ programme which aimed to help long-term unemployed adults aged 25 and over into work.

Background

High long-term unemployment, relative to Great Britain, has been an on-going concern to the local economy and it is likely to increase in the current economic downturn. New Deal 25+, introduced in November 1998, was a mandatory programme which provided participants with assistance to overcome barriers to employment in the form of work experience and/or training. By the end of March 2007, 74,000 participants had taken part in New Deal 25+ at a cost to the Department of around £69million.

In September 2008, New Deal 25+ was subsumed within the Department’s new Steps to Work programme. However, lessons learned from New Deal 25+ remain particularly relevant given the current very challenging economic conditions.

Main Findings and Recommendations

The report focuses on the Department’s programme monitoring, reporting and performance in the five year period to March 2007. In this time, New Deal 25+ support resulted in 6,300 (18 per cent) of the 35,000 participants moving into sustained employment. However, the majority of leavers (54 per cent) returned to benefits. Older participants, particularly those aged 50 and over, were much less likely to get a job. The Audit Office’s recommendations urge the Department to improve the overall level of success and to focus more on the requirements of older participants.

The characteristics of those involved in New Deal 25+ changed over the life of the programme towards a core of ‘harder to help’ participants with complex and multiple barriers to employment, evidenced by the fact that by March 2007 around two-thirds of participants had been on the programme before, a small number more than five times. The NIAO report identifies the need to improve outcomes for these repeaters – the likelihood of repeaters getting a job diminished with each New Deal episode. This failure to get a job, according to providers, results from poor motivation and a benefits trap. Improving repeaters’ motivation towards employment represents a challenge for the Department.

The report notes significant variances in outcomes across the different programme options. The main option, the Preparation for Employment Programme (PEP) (i.e. work placements) which accounted for 60 per cent of all option starts between April 2002 and March 2007, was the least effective - only 7 per cent achieved sustained employment. While the report recognises that the performance of the PEP may reflect the more challenging nature of those assisted through this option, it recommends that more is done to improve the outcomes for those with the greatest barriers to employment.

The Audit Office review also identified considerable variation in the performance of providers in getting participants into jobs and recommends that the Department is more rigorous in monitoring and applying job targets set for these organisations.

The report acknowledges that the Department had recognised, in its new Steps to Work programme, that New Deal 25+ no longer met the needs of the remaining core of more challenging clients. The Department has incorporated a range of measures in the new programme aimed at addressing a number of the issues identified in the report. It also notes the establishment of a discrete quality and performance monitoring Unit and recent revisions in the Department’s contracting arrangements.

The Audit Office report also includes a number of other recommendations and issues:

  • the need for appropriate and challenging programme performance targets – the Department did set targets for the programme but these were inconsistent
  • the Department’s focus on the six-month sustained employment measure is too short. There is a need for it to routinely measure the programme impact on participants over a longer period
  • the need for the Department to benchmark against similar programmes elsewhere in the United Kingdom
  • NIAO’s survey of a sample of participating employers indicated that just under one quarter used New Deal 25+ as a source of low cost labour.