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OPENING STATEMENT BY ANNE VAUGHAN, DEPUTY SECRETARY, DEPARTMENT OF SOCIAL PROTECTION TO THE JOINT COMMITTEE ON JOBS, ENTERPRISE AND INNOVATION TUESDAY 8TH OCTOBER 2013 Chairperson, Committee Members, I would like to thank the Committee for the opportunity to appear before it today to discuss the Pathways to Work strategy. The Department has a very broad remit to provide income supports and services to people right across the age spectrum from childhood to working age to retirement age, to jobseekers, to people with disabilities, to families and to carers. The Pathways to Work strategy is targeted at those people in the working age category who have a capacity to work; it sets out our approach to labour market activation in other words our approach to encouraging and supporting people to stay engaged with the labour market, and ultimately to find employment. In this regard, it is important to note one that labour market activation is one of three main functions of the Department. The two others are payment delivery, and control of fraud and abuse of the social welfare system. While these three functions are equally important, a balance has to be struck between them. Today however I will concentrate primarily on the activation/pathways to work activity and am pleased to attach for the Committee’s information a presentation pack which outlines how the Pathways to Work strategy has evolved over the past few years. Background and Context By way of context Committee members will be aware that Pathways to Work was first launched in February 2012 at a point in time when the unemployment rate stood at 15%, the number of people unemployed as measured by the Central 1 Statistics Office stood at 322,000 and the number of people on the live register claiming jobseeker payments - which includes people in part-time employment – stood at 439,000. These unemployment figures reflected the dramatic reversal in our nation’s fortunes during the period 2008 – 2012 when the level of employment fell from just under 2.2 million to just over 1.8 million. This reversal in our nation’s fortunes led to a dramatic increase in demand for the State’s welfare and employment services which up to 2012 were provided by three separate organisations i.e. The Department of Social Protection, the primary provider of core jobseeker income support payments; the Community Welfare Service of the HSE, the primary provider of supplementary and emergency welfare payments; and FÁS, the primary provider of employment support and training services. As an example of the demands faced by these services the number of jobseeker claims received by the Department of Social Protection increased more than threefold during the period 2006 – 2009 and the annual increase in the number of beneficiaries across all welfare schemes (i.e. the number of new beneficiaries being added to the claim-load each year) grew from just under 40,000 in 2006 to over 270,000 in 2009. This huge increase in demand for services placed significant pressure on the three state agencies involved in service provision. Partly in response to this pressure but also in response to the recommendations contained in various reports from bodies such as the National Economic and Social Council (NESC), the Economic and Social Research Institute (ESRI) and the Organisation for Economic Co-operation and Development (OECD), it was decided to merge the three agencies in order to provide a ‘one-stop-shop’ service to customers. This merger, in addition to simplifying the service proposition to customers, facilitated the re-design and reconfiguration of service so as to improve the quality of service. In particular, it enabled the Department to ensure both that jobseekers registering for income supports would have earlier access to employment services, and, that our scarce 2 case-worker resources would, in line with all international research evidence, be targeted to support those newly unemployed jobseekers most at risk of becoming long-term unemployed. This re-configuration and prioritisation of service capacity was at the heart of the Pathways to Work strategy for 2012 and continues to be core to the on-going transformation of service in the Department. A key challenge in implementing this transformation is to ensure that the job of activation is aligned with and does not detract from the equally important functions of payment delivery and control. Pathways to Work 2012 Pathways to Work is one of the twin-pronged approaches adopted by the Government to address the employment/unemployment challenge which I’ve just set out. The other element is the Action Plan for Jobs. The Action Plan for Jobs is focussed on the task of creating the demand for labour by encouraging and supporting entrepreneurial activity and investment in the Irish economy and has set a target of adding a net 100,000 jobs into the Irish Economy by 2016. Pathways to Work in contrast addresses the supply-side of the labour market with a focus of trying to ensure that as many as possible of the new jobs and other vacancies in the economy are filled by candidates taken from the live register. There are a number of key elements to this approach which were set out the Pathways to Work 2012 document including: The development of Intreo – the one-stop-shop – to integrate welfare and employment services and to deliver an improved customer focussed service to jobseekers The implementation of Client Profiling to inform tailored delivery of services The roll-out of Group and One-to-One engagements to inform and advise jobseekers. 3 The affirmation of the concept of rights and responsibilities, via a Statement of Mutual Undertakings, to establish the basis of the relationship between the State and jobseekers. The roll-out of enhanced identity management – the Public Services Card - to help detect and minimise fraud. The introduction of penalty rates of payment for unemployment people who do not engage with the State’s employment supports to reinforce the concept of rights and responsibilities. The roll-out of new employment supports such as JobBridge. The targeting of places on employment and training schemes such as Community Employment, TÚS and Momentum to long-term unemployed people The development of closer links with employers as a means of securing work opportunities to which job-seekers can be referred. The completion of the full integration of the Community Welfare Service, FÁS employment services and the Department of Social Protection. These developments when taken as a whole represent a very significant programme of transformation requiring substantial IT, process, staff, organisation and physical infrastructure changes. Notwithstanding that some commentators have questioned the pace at which the Department is implementing this programme, experience in other countries where similar change initiatives have been implemented (e.g. UK, France, Norway) indicates a timeline for delivery of five years or more. Given the urgency of the unemployment situation in Ireland we have set ourselves a deadline of the end of next year for completion. So far we have made good progress, for example: FÁS employment services and the Community Welfare Service (c 2,000 staff) were transferred into the Department of Social Protection on time and within budget. New organization and management reporting structures were 4 implemented during 2012 and the services are now fully integrated within the Department. The new Intreo model of operation – integrating the relevant employment and payment services – was developed and roll-out commenced in October 2012. Fifteen Intreo offices, serving c 25% of our client base, have been completed to date and we target to have over 40 offices fully operational by the end of 2013. Group engagement and individual profiling is now fully operational in all Department local offices in advance of the roll-out of the full Intreo service. Also in advance of the roll-out of the full Intreo service the integrated welfare decisions process is operational in 37 offices and has been instrumental in reducing decision times on welfare claims from c 3 weeks to c 3 days in the offices concerned. The Statement of Mutual Undertakings is now in force with penalty rates of payment introduced for jobseekers who do not engage with the State’s employment/training services The national internship scheme, JobBridge, was rolled out and is delivering a clear pathway to employment for many people. Over 20,000 people have benefited from this scheme with a progression to employment rate of over 60%. The Momentum programme to provide work-focussed training to long-term unemployed people was developed, tendered and rolled out – over 4,000 people are now benefitting from this programme. The number of places available on activation schemes such as CE, TÚS and JobBridge was increased by 10,000 (c 30%) as part of Budget 2013. The Springboard programme has supported more than 10,000 unemployed people to re-skill for emerging employment opportunities. 5 Pathways to Work 2013 Turning now to Pathways to Work 2013, this is a 50 point action plan published in July of this year which seeks to augment the focus on newly unemployed jobseekers by increasing and intensifying our level of engagement with people who are already long-term unemployed. Among the planned actions that reflect this focus on longterm unemployment are: Profiling all clients on the Live Register not just new claimants (c 420,000 profiles) Developing an Intreo programme for engaging with long-term unemployed clients. Increasing the number of new clients engaged in Group and one-to-one interviews from 30,000 and 130,000 respectively to 85,000 and 185,000 respectively. Doubling, through internal redeployment, the number of case-workers employed within the Department on activation duties to increase capacity to engage long-term unemployed people. Finalising and implementing proposals for contracting additional capacity from third party service provider for employment services. Implementing reforms to housing support under the new Housing Assistance Payment. Eliminating back-logs in the Family Income Supplement (FIS) scheme. Implementing the JobsPlus incentive for employers to recruit people who are long-term unemployed Monitoring and encouraging recruitment from the Live Register by client firms of the Enterprise Development agencies. Establishing a Labour Market Council of external policy experts, senior industry figures and representatives of client groups to advise on the implementation and further development of the Pathways to Work approach. Developing and implementing a plan to give effect to the EU Youth Guarantee in Ireland. 6 Detailed targets have been set to measure the impact of the 50 actions under Pathways to Work 2013, and these are published at quarterly intervals on the Department’s website. The report for the end of quarter 2 is included in the attached presentation pack and, as can be seen, we are on track to deliver on most of the targets set out. Concluding Remarks Following years of job losses there are now tentative, though welcome, signs of progress in the labour market. There was an annual increase in employment of 33,800 in the year to the second quarter of 2013. Unemployment fell by 22,200 over the same period, to 300,700, continuing a downward trend that began at the start of 2012. By the end of September, the number of people on the Live Register had fallen to 408,000 from a peak of 466,000 in 2010. The unemployment rate, at 13.3%, is down from a peak of 15.1% in early 2012. Despite this progress the jobs and unemployment challenge continues to loom large and remains the primary focus of the Department’s transformation agenda. I trust that my comments here today and the attached presentation is of benefit to the Committee in its consideration of the challenge that we all face; I hope that I have adequately set out, and given a sense of, the determination and commitment of the Department and its staff to respond to this challenge, that it gives you all an understanding of the scale and complexity of the transformation programme within the Department, and reassures you that we are implementing this programme with energy and pace. My colleagues and I will be pleased to answer any questions. [ENDS] 7