The Future Jobs Fund: One of the most ineffective job schemes there’s been?

The Future Jobs Fund: One of the most ineffective job schemes there’s been?

The Future Jobs Fund (FJF) was an employment subsidy brought in by the last Labour Government at the height of the recession to help tackle youth unemployment. It provided sufficient funds to create 100,000 6 month jobs for long term unemployed 18-24 year olds, paying minimum wage for 25 hours per week.

In September 2009, when the first young people started FJF posts, there were 99,000 18-24 years who had been claiming Job Seeker’s Allowance for over 6 months. When applications for the FJF closed in March 2011, this had fallen to 78,000. Today, 18 months later, there are almost 145,000 18-24 year old long term claimants of Job Seeker’s Allowance (source here). One of the Coalition’s first acts was to scrap the FJF. David Cameron had this to say about the decision:

“The Future Jobs Fund has been one of the most ineffective job schemes there’s been… The really damning evidence is that it’s a six-month programme, but one month after the programme [has finished] half the people that were on it are back on the dole. It failed.”

David Cameron, 17 March 2011

At the point he made that statement, no evaluation had been done on the efficacy of the programme, so there was really no basis for the PM’s pronouncement. To their credit though, the DWP did do an evaluation of the FJF and last week it was published (or sneaked out on a Friday with no press release if you are cynical like me). So now the results are in, was the FJF “one of the most ineffective job schemes there’s been”?

Jonathan Portes has written a very good blog post on the evaluationhere, and his organisation NIESR peer-reviewed DWP’s work on this. He writes:

The bottom line is that the impact of the Future Jobs Fund (FJF) on the chances of participants being employed and/or off benefit was substantial, significant and positive. 2 years after starting the progamme (so long after the programme itself had ended, so the participants were back in the open labour market), participants were 11 percentage points more likely to be in unsubsidised employment.  

This is a very large impact for an active labour market programme (considerably larger than that found for New Deal for Young People, for example) suggesting that the programme had a large and lasting impact on participants’ attachment to and ability to succeed in the labour market. 

The FJF  programme is estimated to result in:

  • a net benefit to participants of approximately £4,000 per participant; 
  • a net benefit to employers of approximately £6,850 per participant; 
  • a net cost to the Exchequer of  approximately £3,100 per participant; 
  • and a net benefit to society of approximately £7,750 per participant.

…we know now; the Prime Minister was wrong.”

Not for the first time then, David Cameron has said something, based on no evidence, only to be subsequently proved wrong. So much for evidence-based policy. Contrast this with the Mandatory Work Activity. A similar evaluation concluded that this programme generated no impact on employment. How did the Government respond to this finding? It extended the programme! Ideology trumps facts again.

Back to the FJF. I had some peripheral involvement in the programme in my local area. The majority of the job placements were with local community and voluntary organisations. It was win win. The organisations were able to increase their capacity (very Big Society!), and the individuals were given a chance to try something new and get into the workplace (in some cases for the first time). The key benefit of FJF was that participants were actually in a job – they were being paid. They felt that someone had finally given them a chance after months of rejection. The increase in their self-confidence should not be underestimated, and this seems to be reflected in the evaluation results. After the 6 months were up, participants were much more capable of securing further work than would otherwise have been the case. You cannot replicate this feeling of self-worth with unemployed work experience placements at Poundland.

The FJF has been replaced by the Work Programme and the Youth Contract. The fact that long term youth unemployment has doubled since the FJF was scrapped, suggests these new programmes are not working.

The FJF showed that government can create jobs, and when it does the private sector and wider society benefit. The FJF was quite a modest programme. We could, and should be much more ambitious. The intervention I favour is the MMT Job Guarantee, which I have tried to outline here.

ThinkLeft says:  This post is particularly relevant in view of the fact that official figures show that only one in 28 unemployed people referred to the government’s welfare-to-work programme has been found a job for six months – failing to meet the government’s target.

An analysis by the Guardian reveals that none of the 18 Work Programme contractors – 15 of which are private companies – managed to get 5.5% of unemployed people referred to the scheme a job for half a year in the 14 months until July 2012, despite the government having spent £435m on the scheme so far.

Related posts:

Why Can’t we have Full Employment? by alittleecon

“Of Course the Government Can Create Jobs!” by alittleecon

Is ‘Austerity’ intended to increase unemployment and suppress wages? 

 

3 thoughts on “The Future Jobs Fund: One of the most ineffective job schemes there’s been?

  1. Pingback: The UK needs 8 million New Jobs | Think Left

  2. The future jobs fund was one of the most practical employment schemes that Britain ever had in decades. The coalition government scrapped claiming that it was too expensive. Apart from these claims being completely false the future jobs fund helped a lot of young people to obtain employment. This scheme was just in its infancy when the government abolished it along with scrapping ema one north east ànd the regional development agencies all the tories are capable of doing is destroying excellent schemes without putting anything practical in their place. Nothing happens over night all they do cut their noses off to spite their faces.

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