Speech by Minister Varadkar on Indecon Evaluation of JobBridge

Speech by Minister Varadkar on Indecon Evaluation of JobBridge, LMC Proposals for a New Work Placement Programme, 18th October 2016

Check against delivery

Good afternoon,

I want to welcome all of you here today.

As you all know JobBridge was introduced in 2011 in response to the unprecedented collapse of our economy and particularly the sharp and dramatic increase in unemployment.

It had twin objectives.

First: to help unemployed jobseekers to break the vicious cycle of ‘no experience no job, but no job no experience’, and to end the anomaly where jobseekers who voluntarily took up unpaid work experience lost their welfare payment as they were no longer actively seeking full time work.

Second: to encourage employers to recruit staff at a time when they could not afford to.

The Government’s concern was to ensure that the economic recovery, when it came, would not be a ‘jobless recovery’, as others have been.

Thankfully the recovery this time has been different – it has been jobs-led.

As a result labour market conditions have improved significantly, with unemployment down from over 15% to under 8% and the Live Register falling to fewer than 300,000 for the first time since 2008.

So when I was appointed Minister for Social Protection earlier this year, I asked whether we still needed a State-sponsored work experience programme.

With that in mind, I announced that JobBridge would be reviewed, with a view to replacing the programme. We commissioned an independent evaluation by Indecon in association with London Economics, and sought advice from the Labour Market Council. I have now received the Indecon report and the advice from the Labour Market Council, and have decided on the way forward.

Before explaining this approach, I want to thank Alan Gray and the team at Indecon for conducting such a detailed, comprehensive, evidence-based and robust evaluation of JobBridge. It has been peer reviewed by an external academic, subjected to scrutiny by the Labour Market Council, and is without doubt the most authoritative study available on the effectiveness and impact of JobBridge.

There are three key messages that I take from the study.

First, JobBridge has been very effective in improving the employment outcomes of jobseekers. 79% of participants - about 38,000 people - have had some period of employment since completing their internship; over 64% are still in employment; and a further 10% are now involved in further education.

Compared to a matched analogous group of non-participants, jobseekers who participated in JobBridge improved their employment outcomes by 12 percentage points – or 32%. By any measure this is a significant uplift and shows that internships with a direct link to an employer deliver higher employment outcomes than other options –as we saw in a study from the ESRI last year.

Secondly, JobBridge is not what has been portrayed by its opponents on the left. The people who took up internships are from a wide range of age groups, not just graduates: over 30% were 35 years of age or over, most over 25 years of age and about 30% were unemployed for more than 12 months before starting. Similarly the employers who provide internships were not all large well-funded organisations. In fact two thirds of the host organisations were SMEs.

Most importantly the scheme is viewed positively by participants, 10,000 were surveyed. The majority rated the scheme positively on 18 out of 20 aspects.

For example, 70% of participants felt the programme gave them new skills, with the same percentage reporting a quality work experience.

The third message I take is that we can do better. For example, jobseekers feel the payment could be improved, and employers indicated a willingness to contribute to the cost of the scheme. As a ‘catch-all’ type of programme, there are some deadweight and displacement costs associated with it that can be tackled.

So, having considered the evidence and the suggestions put forward by Indecon, I propose to develop a new work experience programme to replace JobBridge.

In taking this path I am conscious that any new scheme needs the support, trust and confidence of employers, jobseekers, and the public. That’s why there will be a gap between the wind-down of JobBridge and the establishment of a new Work Experience Programme. The new programme will be new, not a reformed or revised version of JobBridge.

I have listened very carefully to the advice of the Labour Market Council and I want to thank Martin Murphy and the members of the Council for their time spent examining the Indecon analysis and other reports – including a report by IMPACT-and for submitting their own proposals and observations.

The LMC believes, on balance, that a work experience programme has a role to play, even as labour market conditions improve. This echoes the direct feedback I have received from Department Case Officers in our Intreo centres over the past few months, who work daily with jobseekers the length and breadth of the country.

They know better than anybody else what works. Every one of them has impressed on me the importance of having a programme like JobBridge in their portfolio – a programme that helps them to give jobseekers real work experience with a regular employer especially one in the private sector where 80% of jobs are to be found.

I am therefore going to listen to my Case Officers and take the advice offered by Indecon and the Labour Market Council. The Department will develop a new work experience programme to replace JobBridge.

This programme will deal with the legitimate criticisms of JobBridge and build on the positive features of the scheme; a programme that, I expect, will win the support of all fair-minded people. With this in mind I have directed that JobBridge is to be closed to new applicants from Friday and the new Work Experience Programme should be launched next year.

This period will enable us to do two things: First, wind down the existing scheme in an orderly manner and allow people currently participating on a JobBridge internship to complete it; and second, consult with key stakeholders on the detailed design principles for a new work experience programme.

For example any new programme should pay the participant no less in net terms than the national minimum wage; employers should pay a contribution to these costs; the duration should be limited to six months; use of the programme by public sector employers should be restricted; and to improve monitoring every participant should meet with a Department case officer during the work placement.

In addition participation should remain completely voluntary: no person should be obliged to take up a work experience place under the new programme.

I have asked the Department to commence the consultation process and it will be in contact with key stakeholders including trade unions, advocacy groups and employer representatives in coming weeks to finalise the design of the new programme for submission to Government early in the New Year.

I ask all stakeholders to engage in this process with an open mind, to weigh up the evidence, and to remember that in all of this it is the jobseeker that matters – the jobseeker who cannot pass the screening process by employers because they have been unemployed for six months or more or because they have no experience. It is our job, our responsibility, to help that jobseeker to overcome this barrier, to help them get their foot in the door to give them a chance, with our support, to prove their worth to an employer.

Thank you.

ENDS