01 December 2009 – Publication of DWP research report 606: ‘the lone parent pilots 24-36 month: the final impact assessment of In-Work Credit, Work Search Premium, Extended Schools Childcare, quarterly work focussed interviews and New Deal Plus for Lone Parents'

New research published today by the Department for Work and Pensions estimates the labour market impact of a set of five government policies designed to help lone parents into work. These policies were piloted in different combinations in Jobcentre Plus districts in Great Britain.  The five policies in question are In-Work Credit (IWC), Work Search Premium (WSP), Extended Schools Childcare and Childcare Tasters (ESC), Quarterly Work-Focused Interviews for lone parents whose youngest child is aged 12 or over in Local Education Authorities in which an ESC pilot is operating (ESQWFI) and New Deal Plus for Lone Parents (ND+fLP). These were collectively referred to as ‘the lone parent pilots’ (LPPs or ‘the pilots’). This impact assessment covers the operation of the LPPs from 1 April 2004 to 31 March 2007. In-Work Credit has since been rolled out to all of Great Britain in April 2008, outside the period covered by this report.

The DWP contracted the Institute for Fiscal Studies (IFS) to undertake an impact assessment to estimate the impact of the LPPs on the benefit and work outcomes of lone parents who were “potentially eligible” for IWC – that is, lone parents in pilot districts who had been receiving Income Support (IS) or Jobseekers’ Allowance (JSA) for at least 12 months before 31 March 2007. The analysis uses similar lone parents in Jobcentre Plus districts not operating the LPPs as a comparison group.

Key Findings

1. Just under 70 per cent of lone parents who received In-Work Credit (IWC) did so for the full 12 months. These lone parents were very likely to remain in work, and very unlikely to re-claim out-of-work benefits. Indeed, over 80 per cent were still not receiving an out-of-work benefit one year after they stopped receiving IWC.
2. The Lone Parent pilots (LPPs) increased the proportion of potentially eligible lone parents who moved into work: 1.4 percentage points (ppts) more potentially eligible lone parents in the flow sample were in work after 24 months compared to the comparison group.
3. The pilots also reduced the number receiving an out-of-work benefit: 2.0 ppts more potentially eligible lone parents in the flow sample were not receiving an out-of-work benefit after 24 months compared to the comparison group.
4. The additional impact of the LPPs on the stock of lone parents were smaller than that on the flow of lone parents: 1.6 ppts more potentially eligible lone parents in the stock sample were not receiving an out-of-work benefit after 24 months; and 1.2 ppts more potentially eligible lone parents in the stock sample were in work after 24 months compared to the comparison group.
5. Although job retention amongst most IWC recipients was high, the research found little evidence that LPPs had significant impact on job retention. Only 9 per cent of the overall impact of the LPPs (a year after the first receipt of IWC) was attributable to a retention impact.
6. Findings suggest that the impact of the pilots was dominated by IWC. Findings suggest that there is little robust evidence to support the hypothesis that New Deal Plus for Lone Parents (ND+fLP) had made the overall package of LPPs more effective at getting lone parents off benefit and into work, compared with IWC alone.
7. There is some evidence that the impact on benefit and work outcomes is greater for lone parents who have previously been on New Deal for Lone Parents (NDLP).  However, it is not clear whether this was a result of NDLP or whether it was because the lone parents who join NDLP were more work-ready than those who do not, or whether there is some sort of beneficial interaction between the two policies.
8. Finally, it should be noted that this impact assessment covers the operation of the LPPs from 1 April 2004 to 31 March 2007. It is possible that the impact of IWC and related policies during a recession will be different from its impact when the economy is growing.

Notes to Editors

1. The research is based on findings from the administrative data on receipt of DWP benefits and time in work recorded in the Work and Pensions Longitudinal Study. Much of the analysis focuses on those lone parents who were “potentially eligible” for IWC: this means lone parents in pilot districts who had been receiving Income Support (IS) or Job Seekers’ Allowance (JSA) for at least 12 months, and so would have been eligible to claim IWC had they left IS/JSA and started a job of 16 or more hours per week. The data were analysed by Mike Brewer et al at the Institute for Fiscal Studies (IFS).
2. Research Report 606 – ‘The lone parent pilots 24 – 36 month: the final impact assessment of In-Work Credit, Work Search Premium, Extended Schools Childcare, Quarterly Work Focussed Interviews and New Deal Plus for Lone Parents’ is published on 1 December 2009.  The report is available on the DWP website.

• Website www.dwp.gov.uk/asd/asd5

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