Why are Britain's jobcentres disappearing?
The jobcentre. It used to be a staple of the British high street, where the unemployed went to sign on and look for work. But Britain’s national network of jobcentres is currently undergoing radical change as the government implements multiple welfare reforms and cuts as part of its continued austerity drive. Between 2016 and 2018, over 100 jobcentres – about 15% of the network – will have closed.
Support for the long-term unemployed and disabled jobseekers has also been cut. A new Work and Health Programme will assist less than a quarter of the participants of the programmes it replaced. Across the country, hundreds of specialist organisations working with jobseekers have lost contracts, and thousands of experienced employment advisers have lost their jobs.
And all this is happening just as the number of unemployed claimants has started to increase and the roll-out of the new, catch-all benefit called Universal Credit, is accelerating. By the end of 2018, most new working age claimants in Britain, will be claiming Universal Credit – and many of them will be required to attend jobcentres. The already intense pressure on a shrinking network of jobcentres will increase further in 2019 when the Department for Work and Pensions (DWP) will begin moving millions of existing benefit claimants onto Universal Credit.
Meanwhile, controversy surrounding the jobcentre closures reveals just how important access to local offices remains. These cuts in jobcentres and the programmes designed to help people into work pose immediate problems for the claimants and staff affected. Reduced access to jobcentres and the complexity of the welfare reforms is also increasing demand on the advice, welfare and employment services provided by councils and other local providers. These include the very services upon which the DWP is relying to provide what it calls “universal support”, which is intended to help disadvantaged claimants cope with the demands of Universal Credit.
The government justifies the cuts in jobcentres and employment services because overall unemployment has fallen – to 4.2% in the three months to Feburary 2018, the lowest since 1975.
But this is shortsighted. There are significant concerns that the system does not have the capacity to meet the needs of the millions of people who will claim Universal Credit and who will be expected to prepare for work and search for jobs. It may also fail to cope with a rapid increase in the number of people claiming benefits in the event of another economic recession.
The history of jobcentres
Jobcentre offices first opened their doors on British high streets in the 1970s, replacing Employment Exchanges, which were poorly regarded and perceived by employers as a welfare service of last resort. The new jobcentres were originally designed to improve the way the labour market functioned, by helping employers fill vacancies and by providing employment and training services to all jobseekers.
Since the 1970s, the logo, layout and operating procedures of jobcentres have changed markedly. In the late 1980s, under the Thatcher government, they were gradually merged with separate unemployment benefit offices. Then, between 2002 and 2006, under the New Labour government, some 1,500 previously separate jobcentres and benefit agency offices were integrated into a network of 800 Jobcentre Plus (JCP) offices. JCP was designed as an “employment first” gateway to the benefit system and made it compulsory for lone parents and some people on disability benefits to attend work-focused interviews, where they were given support to find work. Benefit claimants were also now expected to make and manage their claims mostly by telephone.
The driver for merging jobcentres with benefit offices arose following a rapid increase in long-term unemployment in the 1980s. Influential labour market economists attributed this increase to cuts in frontline staffing, and to a relaxation of rules in the 1980s which required unemployed people to register with jobcentres. From their introduction, jobcentres had treated support for long-term unemployed claimants as a low priority.
Subsequent reforms required jobcentres to focus their interventions on benefit claimants, as opposed to all jobseekers irrespective of their benefit status. At the same time, there was further integration of employment assistance with the administration of benefits. The core of the new approach included regular mandatory contact with advisers, a focus on rapid job placement and referrals to more specialist and intensive employment services for the hardest to place.
A 2011 evaluation of the introduction of JCP concluded that it had helped reduce the number of people on all the main working-age benefits by an estimated 40,000. The report also found the new integrated service had increased the effective labour supply, and that the investment had actually raised the government money because it reduced the number of people claiming out-of-work benefits while increasing the revenue raised through taxation. The modernised jobcentre network played a major role in enabling the DWP to respond quickly to the 2008 recession. It managed a sharp increase in benefit claims from people who lost their jobs, swiftly deployed additional resources, and maintained performance in helping claimants get jobs.
Today, jobcentres continue to play an important role in helping employers fill vacancies and in local economic development. But since reforms introduced in 2011 by the Conservative-Liberal Democrat coalition, their primary responsibility – and the performance targets under which their staff are measured – concern moving people off benefits, with little follow-up of how many claimants get jobs, or how many keep them.
Jobcentres have now become responsible for enforcing the requirements needed to collect benefits, and imposing sanctions on those who fail to meet obligations to attend jobcentre appointments, search for a job or prepare to start work. These sanctions range from short-term deductions of up to 40% in job seeker benefit, through to penalties that can last for three years.
All these reforms mean the jobcentre of today is a very different place to the jobcentre of 1970. What was a public employment service, providing assistance to all job seekers and employers, is now solely a claimant employment service tasked with reducing the number of people claiming benefits.
Preparing for Universal Credit
Universal Credit attracted widespread support because it was originally designed to simplify the benefit system and improve work incentives, with a new cadre of frontline jobcentre work coaches assisting more claimants to prepare for and seek work. In practice, benefit cuts have weakened work incentives and simplification, while more working age claimants are being pushed towards a smaller network of jobcentres.
Between 2014 and 2015, jobcentres experienced another redesign in an effort to change the way services are delivered and prepare for Universal Credit. In the new “digital” jobcentres, claimants can now access free Wi-Fi, printing facilities and computers. New benefit claims are generally made online and unemployed claimants also “sign on” using electronic pads that verify the authenticity of signatures. Part of the reason for these changes is that Universal Credit is also designed to be “digital by default”, with the goal that over 80% of claimants will eventually manage all benefit-related aspects of their claim online.
Starting in 2011, Universal Credit was first targeted at new claimants without children in what was called the “live service”. This approach has ended and a “full digital service”, targeted at nearly all people of working age who are claiming benefits, is being implemented in phases throughout the UK. Under the full digital service, claimants manage many of their interactions with the DWP through an online Universal Credit account where they report their income, any changes in circumstances and what they have done to look for work. A digital advisory function allows work coaches to monitor individual job search activity, analyse CVs, identify skills or training gaps, as well as to search, save and send targeted vacancies directly to claimants.
However, mandatory personal attendance at jobcentre interviews remains a core requirement of continuing to receive Universal Credit and most other working age benefits. This is especially the case for unemployed claimants who must currently attend their jobcentre at least weekly, or fortnightly if their travel time is less than one hour each way by public transport. Where there is no public transport, they still have to attend every two weeks if they can walk to the jobcentre in under one hour or must walk no more than three miles each way. Claimants outside these limits, or those with particular barriers such as caring needs, are allowed to “sign on”, or report on their work search, fortnightly by post – but they must still travel to the jobcentre to attend more intensive interviews concerning their benefit claim and efforts to seek or prepare for work.
These rules may seem reasonable, but they pose significant difficulties for particular groups of claimants, especially those with mobility problems, caring responsibilities or those living in rural areas.
In 2016, most jobcentres were located in urban areas and half the 28 offices in rural areas were in Wales. An interactive online data tool, published by the National Audit Office, suggests that in urban areas 89% of claimants were within 30 minutes of their nearest jobcentre by public transport. In rural areas, only 35% of claimants were within 30 minutes, 75% of claimants were within 45 minutes and 90% were within 60 minutes. These nominal travel times do not take into account factors that complicate journeys, such as the frequency, reliability, and cost of services – all factors that will now be further exacerbated by the contraction of the jobcentre network.
When asked in recent “customer experience surveys”, many claimants’ report positive experiences of jobcentre support and say they value the convenience and utility of accessing the services over the phone or online. Some do have less positive experiences, however, and these new communication channels cause problems for a significant minority of disadvantaged claimants, especially those with poor levels of literacy or digital skills.
Findings from parliamentary inquiries and independent agencies continue to highlight these problems. Persistent themes include the complexity and delays of the process to claim benefits, poor communications and reduced options available for face-to-face contact. Claimants with physical or mental health conditions can struggle to navigate the system and do what is required of them. Others fear the impact of sanctions and of being pressurised to drop benefit claims or to take insecure, low-paid jobs. Mandatory interactions with jobcentres are a source of stress and anxiety for many claimants.
Access to online facilities at jobcentres also remains important for those many claimants who do not have their own computers or internet access, or who may need assistance using such services. Jobcentres will continue to act as a fail-safe when serious or transitional problems with the Universal Credit digital system come to light. This was illustrated in January 2018, when the Government Digital Service found that about a third of potential claimants were not able to set up and verify their online Universal Credit account and in one jobcentre more than half of claimants needed help with the process. A month later, it also emerged that Universal Credit claimants who forgot their log-in details had to attend a face-to-face interview at a jobcentre to receive a new password. The “full service” should provide a password reset function but claimants will still have to attend a jobcentre if they forget their 16 digit personal security number.
All this shows that the digital transformation has met with patchy success, particularly amid the complexity of changes to Universal Credit. Yet still the government is ploughing ahead with plans to close jobcentres.
The programme of closures was pre-figured in the Conservatives’ 2015 Spending Review, which announced that the DWP would reduce its “estate footprint by 20%”. The implications for the jobcentre network emerged slowly in 2016 with phased, little-noticed announcements of decisions to close or merge small numbers of local jobcentres. The PCS, the civil service trade union, was warned, however, that a significant number of jobcentre staff would have to relocate or be at risk of redundancy.
Parliamentary scrutiny intensified from December 2016 when the DWP proposed closing half of Glasgow’s 16 jobcentres. This prompted a Westminster Hall debate in parliament followed by a Scottish Affairs Committee inquiry. The publication of the full closure programme in January 2017 was followed by another Westminster Hall debate in March 2017, when concerns were raised about the negative impact of closures on claimants’ ability to access services. MPs and other stakeholders complained of a lack of prior consultation, the absence of rigorous impact assessments and negligible consideration of alternatives. They also warned of the “knock on” effect of increased demand on other, already overstretched local services, especially welfare and money advice agencies, and local libraries.
In early 2017, the PCS union launched a national campaign against the closures. It has led protests and strike action in response to particular jobcentre closures, especially in Sheffield and Glasgow where staff argue that their offices provide a vital service in the most deprived parts of each city.
A revised final timetable for jobcentre closures was published in July 2017. It said that 109 jobcentres have been, or are to be closed, leaving a final network of some 600 standalone jobcentres, including ten new acquisitions. Most of the closures are taking place in London and the Northwest, with the fewest in Wales and the Northeast. Services from 50 smaller jobcentres are to be co-located in local authority or other community settings.
The DWP published no rationale for the closure of individual jobcentres. It argued simply that the termination of a 20-year private finance initiative estates contract in March 2018 enabled it to rationalise the network and vacate underused office space. It said this space had been generated by a decline in staff numbers, the automation of back office processes, the increased use of digital services by claimants, and the reduction in the number of unemployed claimants – which had then fallen from almost 1.6m in October 2011 to just over 800,000 in October 2016.
The department committed only to undertake a local consultation where a closure meant that claimants had to travel more than an additional three miles, or for over an additional 20 minutes by public transport from their existing jobcentre. This meant the views of local claimants and stakeholders were only sought for 28 of the proposed 135 countrywide closures and co-locations.
A rapid review of the subsequently published consultations shows claimants raised common concerns about the closures. These included the direct impact on travel times and costs and the possibility of receiving a sanction for not attending a meeting as a result, especially for claimants with disabilities and those caring for young children. One claimant from the Wirral said:
A train and a bus would cost people like me a fortune, it’s money we simply do not have.
Another claimant in Southall, said:
An extra couple of bus journeys might not mean anything to someone with a regular income but as anyone who has been living on benefits knows – every penny counts.
While another in Highgate, London said:
I would fear being sanctioned all the time by having to rely on the sometimes unreliable public transport, road works or traffic problems.
Other concerns included the loss of local accessible internet and employment support and the risks of overcrowding in the jobcentres that weren’t being closed. One claimant from Liverpool said: “I do not think the … jobcentre can cope with all the extra footfall and work generated by amalgamating three centres into one.”
The DWP responded to each consultation with locally tailored, standard answers. It did acknowledge some difficulties, but in nearly all cases the closures went ahead. The department rejected any suggestion that sanctions might increase following local closures and insisted that claimants would continue to have access to high-quality services in their new jobcentres.
In early April 2018, Alok Sharma, the minister for employment at the DWP, when asked about the closure of the Willesden and Kilburn Jobcentre in Brent, said that work coaches would advise and assist claimants making unfamiliar journeys, and also make use of telephone, postal and email correspondence options with vulnerable claimants. The department also committed that when a full-time jobcentre closed following a consultation, it would put an “outreach” service in place within the local community. Little detail has been given, however, on how such services would operate or for how long.
All this means that in the areas where jobcentres are being shut, there is real concern about how the remaining jobcentres will manage. Particularly as the Universal Credit roll-out continues apace.
Risks to roll-out of Universal Credit
Personal attendance at jobcentres and interactions with work coaches remain at the heart of the British welfare-to-work system. Even though the Universal Credit system is “digital-by-default”, claimants must still attend mandatory appointments and must periodically submit physical forms of evidence at their jobcentres to support their benefit claims. This will also include providing proof of citizenship or immigration status for an estimated two million families who will have to transfer from their current benefit to Universal Credit over the next few years.
Since 2014, many unemployed claimants have been required to sign on every week or even daily for varying periods. Since 2016, most people applying for health and disability related benefits have been required to attend an initial jobcentre “work and health conversation” at the start of their claim, and successful claimants deemed more “employable” will be required to take other active steps to improve their employability.
But the numbers of people required to attend a jobcentre will keep on rising. Once the roll-out of Universal Credit is complete, jobcentre attendance will also be required of lone parents with younger children, unemployed spouses or partners, people who currently only claim housing benefit but will transfer onto Universal Credit, and up to 600,000 people in low-paid employment. The increase in the state pension age to 66 by October 2020 is also resulting in a marked increase in the number of workless people in their sixties who have to “sign on” and attend jobcentres. This is because they are no longer able to claim pension credit, which only exists for people of pension age. Many of these claimants have not previously been eligible for jobcentre support or been included in the monthly total claimant unemployment count.
There is evidence already that the roll-out of Universal Credit may be causing a greater than anticipated increase in the number of claimants with which the now “streamlined” jobcentre network must engage.
Since mid-2016, the headline unemployment total has been falling – a data point measured by the household-based Labour Force Survey, which includes unemployed people who aren’t claiming benefits. But the claimant unemployment count, which includes those currently receiving Jobseekers Allowance and those on Universal Credit who are expected to work, has steadily increased. In the year to March 2018, it grew by 9% or 73,200 to reach a total of 890,500 claimants.
This increase has been most marked in the areas where Universal Credit has been implemented, and even more so in “full digital service” areas. In the relatively small number of jobcentres where the full service had been implemented longest, before 2016, the claimant count was 38% higher in March 2018 than it had been a year earlier, an increase that wasn’t experienced by those jobcentres where the full service had not yet been implemented. While the final trend is not certain, an analysis by the Learning and Work Institute suggests it’s plausible that the number of unemployed claimants could double to 1.5m by the end of 2020. Yet the DWP and jobcentres have only a third of the resources and staffing that they had in 2012, the last time the claimant count stood at that total.
Change in claimant count in Jobcentre Plus Offices before and after Universal Credit full service rollout.NOMIS and Learning and Work Institute analysis
The progress of Universal Credit has so far been mired by issues concerning benefit design and digital delivery. But a potentially bigger risk to smooth implementation may soon arise from crowded jobcentres, rapidly increasing caseloads and less frequent and effective interactions between claimants and work coaches.
The government continues to herald the UK’s record low unemployment figure, using them to justify closing jobcentres at the same time as it introduces Universal Credit and makes services digital. But this low headline figure is hiding a forthcoming surge in the number of people who will need to go to a jobcentre in person. It ignores the fact that for many claimants, going to regular face-to-face meetings at a nearby jobcentre remains mandatory and is the most important way in which they will learn about Universal Credit.
Most worryingly, if there is another economic recession, then there will be little capacity to deal with the increased number of people who will lose their jobs, claim benefits and need help in finding other employment. Closing jobcentres now might come back to haunt the government later.