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PKSG Working Paper Series

Working Paper PKWP1106

The UK future jobs fund: The Labour party's adoption of the job guarantee principle

September 2011

Tanweer Ali

This paper examines the development of employment policy in the United Kingdom. Past public-sector direct employment schemes, including those associated with the workfare model, had been discredited as ineffective across the OECD. In numerous countries, however, newer job creation schemes were implemented from the 1990s, aimed at addressing some of the shortcomings of earlier projects, and utilizing the growth of smaller community-based projects – the Intermediate Labour Markets, or ILMs. With the onset of the current economic downturn, and the substantial rise in cyclical unemployment, policy-makers more closely examined options for a demand-led strategy. Although ILMs had not been created with a view to forming part of a comprehensive job guarantee, the potential of these schemes to form part of a wider national strategy was clearly seen. In 2009 the government announced a job guarantee for young people, the Future Jobs Fund. This initiative was inspired at least in part by the work of Hyman Minsky. Although the Future Jobs Fund was scrapped in May 2010, it represents a bold step in active labour market policy. Subsequent analysis of the data related to the Future Jobs Fund indicate that it was a success, achieving its goals even under conservative assumptions.

Keywords: Job guarantee, full employment, unemployment, work, community

JEL classification: E61: Policy Objectives; Policy Designs and Consistency; Policy Coordination H41: Public Goods I31: General Welfare; Well-Being I38: Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs J23: Labor Demand J68: Mobility, Unemployment, and Vacancies: Public Policy

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