This independent report for the Department of Work and Pensions assesses the effectiveness of Employment Zones introduced in 2000 to test a new, market oriented approach to reducing long-term unemployment through a work first, outcome-related model of delivering employment services.
The evidence shows that EZs are more effective than comparative New Deal programmes in terms of their success in placing mandatory customers into work and helping them sustain employment for 13 weeks. EZs also appear to be successfully engaging lone parents, including those who have more complex barriers and whom New Deal has been unable to help. The better results have been achieved through a combination of financial and operational flexibilities and a highly incentivised funding regime which focuses all efforts and resource on achieving job placements.
The better results come at a price. They cost significantly more and offer less value for money than comparative New Deals. The better results may also be short-lived. Not only are relatively few jobs sustained longer than 13 weeks, but over time, there is a marked convergence between the performance of EZs and mandatory New Deals. For all their flexibilities, additional funding and focus on sustained job outcomes, over a longer period, EZs may perform no better than New Deal.
In spite of their considerable flexibilities and scope for innovation, EZs have been unable to overcome the barriers of a hardcore of long-term unemployed clients. EZ delivery has thus confirmed the existence of a group of customers experiencing employment barriers that may be insurmountable within the timescale and confines of the current EZ job outcome-focused regime.
The report is available at: http://www.dwp.gov.uk/asd/asd5/rports2007-2008/rrep449.pdf