The UK Future Jobs Fund: Labour’s adoption of the job guarantee principle

Ali, Tanweer (2011): The UK Future Jobs Fund: Labour’s adoption of the job guarantee principle.

Abstract

This paper examines the development of employment policy in the United Kingdom leading to the creation of the Young Person’s Guarantee and its main component, the Future Jobs Fund. Past public-sector direct employment schemes, including those associated with the workfare model, had been discredited as ineffective across the OECD. In numerous countries, however, newer job creation schemes were implemented from the 1990s, aimed at addressing some of the shortcomings of earlier projects, and utilizing the growth of smaller community-based projects – the Intermediate Labour Markets, or ILMs. Whilst there was no strategic policy commitment to demand-led active labour market policy in the UK until recent years, a network of ILMs came into existence, and much of the funding for these small-scale local projects came from the government. With the onset of the current economic downturn, and the substantial rise in cyclical unemployment, policy-makers more closely examined options for a demand-led strategy. Although ILMs had not been created with a view to forming part of an ‘employer of last resort’ policy, and were generally directed at very specific groups, the potential of these schemes to form part of a wider national strategy was clearly seen. In 2009 the government announced a job guarantee for all young people, primarily through the Future Jobs Fund. This initiative was inspired by ‘employer of last resort’ (or ‘job guarantee’) concept and the work of Hyman Minsky, and the intention was to extend it over time. Although the Future Jobs Fund was scrapped in May 2010 following a change of government in the UK, it incorporates the lessons of past policy failures, representing a bold step in active labour market policy – and may form a model for reviving demand-led employment policy.

• Item Type: MPRA Paper
• Language: English
• Keywords: Unemployment; New Deal; Job Guarantee; Employer of Last Resort; Minsky; Future Jobs Fund
• Subjects: J - Labor and Demographic Economics > J0 - General > J08 - Labor Economics Policies; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B50 - General

References

Beveridge, William H. (1944). Full Employment in a Free Society. London: George Allen & Unwin.

Bivand, P., Brooke, B., Jenkins, S., Simmonds, D. (2006). Evaluation of StepUP Pilot: Final Report. Research Report No. 337. Department for Work and Pensions. Available: http://campaigns.dwp.gov.uk/asd/asd5/rports2005-2006/rrep337.pdf [April 2006].

Cooke, G. & Purnell, J. (2009, December 4). Every one of us should be guaranteed a job. Financial Times.

Cooke, G. & Purnell, J. (2010). Introduction. In Cooke, G. & Purnell, J. (Ed.). We Mean Power: Ideas for the Future of the Left (pp. 15-49). London: Demos.

Daguerre, A. (2004). Importing Workfare: Policy Transfer of Social and Labour Market Policies from the USA to Britain under New Labour. Social Policy & Administration. Vol.38, No. 1. 41-56.

Daguerre, A. & Etherington, D. (2009). Active Labour Market Policies in International Context: What Works Best? Lessons for the UK. Department for Work and Pensions, Working Paper No. 59. Her Majesty’s Stationary Office. Available: http://campaigns.dwp.gov.uk/asd/asd5/WP59.pdf

Darling, Alistair (2009). 2009 Budget Speech. As reported in Hansard – House of Commons Debates, 22 April 2009, Columns 240/1. http://www.publications.parliament.uk/pa/cm200809/cmhansrd/cm090422/debtext/90422-0004.htm

De Giorgi, G. (2005). Long-term effects of a mandatory multistage program: the New Deal for Young People in the UK. Institute for Fiscal Studies. Working Paper 0508. Department of Education, Employment and Workplace Relations

(DEEWR). (2009a). Jobs Fund Fact Sheet. [Online]. Available: http://www.deewr.gov.au/Employment/Documents/factsheet.pdf [Retrieved: 12 October 2010] Department of Education, Employment and Workplace Relations

(DEEWR). (2009b). Frequently Asked Questions – Jobs Fund. [Online]. Available : http://www.deewr.gov.au/Employment/Documents/JobsFundFAQ.pdf [Retrieved: 12 October 2010]

Department for Work & Pensions (DWP). (2009a). Guide to the Future Jobs Fund. [Online]. Available : http://campaigns.dwp.gov.uk/campaigns/futurejobsfund/pdf/fjf-guide.pdf [Retrieved: 12 July 2010]

Department for Work & Pensions (DWP). (2009b). Future Jobs Fund Bid: Guidance Notes. [Online]. Available : http://campaigns.dwp.gov.uk/campaigns/futurejobsfund/pdf/fjf-bid-guide-notes.pdf [Retrieved: 12 July 2010]

Department for Work & Pensions (DWP). (2009c). Building Britain’s Recovery: Achieving Full Employment. (Government White Paper.) London: The Stationary Office.

Department for Work & Pensions (DWP). (2010a). Future Jobs Fund. [Online]. Available : http://campaigns.dwp.gov.uk/campaigns/futurejobsfund/index.asp [Retrieved: 12 July 2010]

Department for Work & Pensions (DWP). (2010b). Young Person’s Guarantee Official Statistics. [Online]. Available: http://research.dwp.gov.uk/asd/asd1/jsa/ypg/ypg_oct2010.pdf [Retrieved: 6 November 2010].

Exell, R., Senior Policy Officer, TUC. (28 June 2010). Future Jobs Fund. E-mail to Tanweer Ali ([e-mail]).

Finn, D. (2001). Modernisation or Workfare ? New Labour’s Work-Based Welfare State. Competition & Change. 5. 355-374.

Finn, D. (2003). The “Employment First” Welfare State: Lessons from the New Deal for Young People. Social Policy & Administration. Vol.37, No. 7. 709-723.

Finn, D. & Simmonds, D. (2003). Intermediate Labour Markets in Britain and an International Review of Transitional Employment Programmes. Department for Work and Pensions Report No. 173. Available: http://campaigns.dwp.gov.uk/asd/asd5/working_age/wa2003/173rep.pdf

Foot, Michael (1984). Another Heart and Other Pulses. Glasgow: William Collins Sons & Co.

Fraser, D. (2003). The Evolution of the British Welfare State (3rd Ed.). Basingstoke: Palgrave Macmillan.

Glynn, S. (1999). Employment, Unemployment and the Labour Market. In Page, R.M. & Silburn, R. (Ed.) British Social Welfare in the Twentieth Century. (pp. 179-198). London: Macmillan Press.

Green, A.E. & Hasluck, C. (2009). Action to Reduce Worklessness: What Works? Local Economy. Vol. 24, No. 1. 28-37.

Gregg, P. (2008). Realising Potential : A Vision for Personalised Conditionality and Support. An Independent report to the Department for Work and Pensions. Norwich: The Stationary Office.

Gregg, P. (2009). Job Guarantee: Evidence and Design. Bristol: Centre for Market & Public Organisation, University of Bristol [Online]. Available: http://www.bristol.ac.uk/cmpo/publications/other/jobguarantee.pdf

Gregg, P. & Layard, R. (2009). A Job Guarantee. Centre for Economic Performance, London School of Economics. Available: http://cep.lse.ac.uk/textonly/_new/staff/layard/pdf/001JGProposal-16-03-09.pdf [16 March 2009].

Harari, Daniel (2010). Young Person’s Guarantee. Standard note SN/EP/5352. House of Commons Library, Economic Policy and Statistics Section.

Labour Party. (2010). The Labour Party Manifesto 2010: A Future Fair for All. [Online]. Available : http://www.labour.org.uk/manifesto-splash [Retrieved: 12 July 2010]

Layard, R. (2009). Note on unemployment policy and the crisis. Centre for Economic Performance, London School of Economics. Available: http://cep.lse.ac.uk/textonly/_new/staff/layard/pdf/Note_unemployment_crisis_IZAOct09.pdf [20 October 2009].

Lowe, R. (2005). The Welfare State in Britain since 1945. (3rd Ed.). Basingstoke: Palgrave Macmillan.

Martin, John (1998). What Works among Active Labour Market Policies: Evidence from OECD Countries’ Experiences. Labour Market & Social Policy – Occasional Papers. No. 35. Paris: OECD.

Meager, N. & Evans, C. (1998). The Evaluation of Active Labour Market Measures for the Long-term Unemployed. Employment and Training Papers 16. Geneva: International Labour Office.

Minsky, H. (1986). Stabilizing an Unstable Economy (2008 edition).McGraw Hill, NY.

Organisation for Economic Cooperation & Development. (1994). The OECD Jobs Study: Evidence and Explanation. Paris: Organisation for Economic Cooperation & Development.

Prideaux, S.J. (2010). The Welfare Policies of Charles Murray are Alive and Well in the UK. International Journal of Social Welfare. Vol. 9, Issue 3. 293-302.

Richards, Paul (2009). Labour Must Act Now on Unemployment. In Progress Online [Online]. Available: http://progressonline.org.uk/columns/column.asp?c=252 [17 July 2009].

Sianesi, B. (2002). Differential effects of Swedish Active Labour Market Programmes for Unemployed Adults During the 1990s. Institute for Fiscal Studies. Working Paper 0125.

Syrett, S. (2008). Reducing Worklessness : The Role of Local Action and Local Economic Development. Liverpool: John Moores University, European Institute for Urban Affairs [Online]. Available. http://www.ljmu.ac.uk/EIUA/EIUA_Docs/9_Syrett.pdf.

Theodore, N. (2007). New Labour at Work: Long-term Unemployment and the Geography of Opportunity. Cambridge Journal of Economics. 31. 927-939.

Van Reenen, J. (2004). Active Labour Market Policies and the British New Deal for Unemployed Youth in Context. In Blundell, R., Card, D. & Freeman, R. (Eds). Seeking a Premier Economy. University of Chicago Press.

Wickham-Jones, Mark (2001). Missed Opportunities: British Social Democracy and the Rehn Model, 1951-1964. In Milner H. & Wadensjö, E. (Ed.) Gösta Rehn, the Swedish Model and Labour Market Policies: International and national perspectives (Chapter 14). Ashgate, UK: Ashgate Publishing.

Wise Group website [Online]. Available: http://www.thewisegroup.co.uk/content/. [Retrieval]: 22 November 2010.