From the TUC

The PBR, unemployment and poverty policy

09 Dec 2009, by in Labour market

Today’s PBR contained some important policy announcements on welfare and labour market policy – but nothing earth shattering. The Young Person’s Guarantee will now be available to unemployed 18-24 year olds after 6 months of claiming JSA (with compulsory participation in the Community Task Force now starting after 10 months). However, there was no specific commitment to increase the number of Future Jobs Fund jobs, or to make the Guarantee a permanent feature of welfare to work policy.

There was also a promise to provide 10,000 graduates with financial support to undertake unpaid internships. The full PBR report reveals that this comprises an £8 million Government contribution towards a “financial support scheme to provide bursary-style support for undergraduates undertaking short unpaid internships in professions with historically poor access”. The details of the scheme are yet to be developed, and it will not be operational before Summer 2010. Regardless of whether bursary support is available, the TUC would like to see far more Government action now to enforce Minimum Wage regulations with respect to internships. At present too many employers appear to be evading these regulations, advertising private sector jobs as ‘voluntary’ positions for interns – not least through the Government supported Graduate Talent Pool website.

For unemployed adults aged over 50 there was some good news – more support to be available through Jobcentre Plus, and an increase in Tax Credit eligibility for those aged 65 (who will now be entitled to claim after working 16 hours rather than the current 35). There is however no extension of Job Gurantees to adults aged 25 and over – a policy that we will continue to call for.

The roll out of the ‘Better Off In Work’ Credit, which has been piloted over the last year in Yorkshire and Humber, looks like a positive step (although I can’t find any evaluation evidence on its effectiveness). During the pilot people who have been out of work and claiming benefits (the list includes JSA and ESA among others) continuously for 26 weeks or more and who move into full time work (Jobcentre Plus define this as a job of 16 hours or more) are guaranteed an income from work, including any in-work benefits, of at least £25 more than they received from out of work benefits. The Credit is available for 26 weeks. While wider reform is needed for those working under 16 hours (including revision of the £5 earnings disregard) and on including the additional costs of work (such as travel and food) in ‘better off’ calculations, the recognition of the need for further work both on benefit take up and clarity regarding better off in work calculations is welcome.

Note: This section of the post has been amended, as the previous text did not take into account the lack of eligibility of families in reciept of Working Tax Credit for Free School Meals.

Child Poverty campaigners have welcomed the announcement on the extension of Free School Meals, and any increase in availability is certainly good news. However, the full PBR report presents a slightly more complicated picture than the Chancellor’s speech initially suggested. Eligibility to Free School Meals will be extended primary school pupils in working families with a household income below £16,190 (the threshold is currently £16,040, and households claiming Working Tax Credit are not eligible, regardless of what their households incomes are). It seems likely that the extension will mean families on low incomes who are recieving Working Tax Credit will now be eligible for free meals for their children. This extension will also be staged, with 50% of newly eligible primary school pupils included from September 2010, and the Government aiming to deliver free school meals for all pupils in low income working famlilies by 2011.

The PBR concludes that this will benefit around ‘500,000 children’. DCSF data suggest that provisional estimates for 2009 are for 654,970 children to be eligible, which will include children in workless families, so this would be a significant increase in the number of children who qualify. Once fully rolled out (in 2011) the PBR states that “this and other measures announced in and since Budget 2007 mean that around 550,000 children are expected to be lifted out of poverty”. There is still much to be done if the Government is to meet the demands of End Child Poverty and continue to reduce poverty levels among children.

2 Responses to The PBR, unemployment and poverty policy

  1. Tweets that mention The PBR, unemployment and poverty policy | ToUChstone blog: A public policy blog from the TUC — Topsy.com
    Dec 9th 2009, 4:51 pm

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  2. Tim
    Dec 9th 2009, 11:15 pm

    The young person’s guarantee is a small part of the bigger picture. Having an unemployment rate this high for young people is not healthy for any society. The global economy we are moving into more and more gives us a disadvantage in wages, and it’s natural many businesses would want to lower their costs and get workers elsewhere.

    At least a partial answer for some is to globalize their own opportunity by finding it online through reputable and worthwhile means (http://leavethejobbehind.com is one example) and/or find something that is worth promoting- something that that benefits others in profound ways. http://businessintobenevolence.com