Work Programme to add £18bn value to UK economy

2 September 2014

A new report published today (Tuesday, 2 September 2014) shows that £18bn of value will be delivered to the economy by the Work Programme.

The report, ‘The Economic Impact of the Work Programme’, by Europe Economics is the first study to look at the economic benefits of the Work Programme and the added financial value it delivers to employers, employees and the taxpayers.  The report was commissioned by the Employment Related Services Association, the representative body for the employment support sector’, to mark the third anniversary of the Work Programme and the launch of a greater focus  – ‘Proud to Work’ – on the employers and employees who have benefited from the Work Programme.

The figure of £18bn refers to the value to the economy provided over the lifetime of the workers on the programme who would not have otherwise found work.  Of the £18bn total:

• £7bn will be delivered to workers
• £7bn will be delivered to the government
• £4bn will be delivered to employers

Around 300,000 workers have found lasting work while on the Work Programme. Europe Economics estimates that around 100,000 jobs for the long term unemployed would not have taken place without the programme.

• Workers benefit through their wages by an average of £140 million-a-year between 2011 and 2059.
• The government benefits by an average of £140 million-a-year in tax income and a reduction of benefit pay-outs between 2011 and 2059.
• Employers benefit by an average of £80 million-a-year in additional productivity and profit.

Welcoming the report Minister of State for Employment, Rt Hon Esther McVey MP, said:

“The Work Programme is helping more people than any previous employment programme and we are committed to keep driving up performance to get the best deal for jobseekers and taxpayers.

“It is transforming how we help claimants who have been unemployed for a long time whereas before many would have been written off to a life on benefits. As part of the Government’s long term economic plan, it has helped people to turn their lives around and build a career – from catering to construction and care work to hairdressing – contributing to the biggest annual fall in long term unemployment since 1998.”

The Work Programme has been running since 2011, and provides employment support for the long term unemployed. Service providers have freedom to decide how best to support Work Programme participants while meeting minimum standards for delivering the service.

This new report is being formerly launched at a Proud to Work event tomorrow by the Europe Economics authors, employment support sector representatives and the Minister of State for Employment, Rt Hon Esther McVey MP.

Kirsty McHugh, the CEO of ERSA, said:

“Providers of employment support know they are making a real difference to people’s lives, and now we have the evidence to show that the Work Programme is delivering for the economy. It is giving the long term unemployed a chance in the workplace; saving taxpayer’s money; and supporting growing businesses looking for new employees.

“As we head towards the General Election in 2015, I hope all parties will look at this important research and get behind the employment support sector’s efforts to give the long term unemployed a chance in the workforce.”

This new research has also been welcomed by the CEO of Iceland, Malcolm Walker CBE. He said:

“Iceland as a business prides itself on its customer service.  So for me, it is vitally important that every new employee we take on is ready for work, with the skills they will need to match the high standards already set by our 25,000 strong team of people.

“This is why the Work Programme has been so important for us – we have access to a new pool of talent, with people genuinely ready for the workplace.

“I am delighted to back this report and hope it will lead to more long term unemployed jobseekers getting a chance in the workplace.”

Matthew Sinclair, one of the authors of the new report, said:

“Our new research suggests that the Work Programme has provided a substantial boost to the employment prospects of the long term unemployed.

“As this is the first attempt to assess the performance of the programme controlling for the actual circumstances that have prevailed in the labour market since its introduction, the results will undoubtedly be refined with further research, but the Work Programme appears to be producing tangible benefits for many participants.

“Over time, we can expect those who have found work to make a valuable contribution to the shared prosperity of the UK: increasing their earnings, saving taxpayers’ money and contributing to business success.”

Ends

For more information on the report or the launch event, or for any media enquiries, please call John Higginson on 020 3397 0100 or emailjohn.higginson@westbournecoms.com

Notes to Editors

1. “The Economic Impact of the Work Programme” by Europe Economics is being formerly launched in London on 2nd September. This will include presentations from the report authors, representatives of the employment support sector and the Minister for Employment, Rt Hon Esther McVey MP.
2. The Employment Related Services Association (ERSA) is the sector body for those delivering or with an interest in employment support services.
3. ERSA’s membership spans the private, voluntary and public sectors and ranges from large multi-nationals through to small specialist charities.  It has over 170 members including all prime contractors of the Work Programme.