Cadbury Dairy Milk Essay Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing their rights of, disadvantaged producers and workers especially in the South (FINE, 2001). Fair Trade certified producer organizations must comply with a number of requirements, related to social, economic and environmental developments. In addition, labour conditions in these organizations must follow certain standards. The essential characteristic of Fair Trade cocoa is that producer organizations receive a higher price for their cocoa beans. The Fair Trade price represents the necessary condition for the producer organizations to have the financial ability to fulfil the above requirements, and to cover the certification fees. It is calculated on the basis of world market prices, plus fair trade premiums. The Fair Trade premium for standard quality cocoa is US$ 150 per tonne. The minimum price for Fair Trade standard quality cocoa, including the premium, is US$ 1,750 per tonne. Other benefits for certified producer organizations are better capacity building and market access. Presently, cocoa sold with the Fair Trade label still captures a very low share of the cocoa market (0. 5%). Organic cocoa and chocolate The organic cocoa market represents a very small share of the total cocoa market, estimated at less than 0. 5% of total production. ICCO estimates production of certified organic cocoa at 15,500 tonnes, sourced from the following countries: Madagascar, Tanzania, Uganda, Belize, Bolivia, Brazil, Costa Rica, Dominican Republic, El Salvador, Mexico, Nicaragua, Panama, Peru, Venezuela, Fiji, India, Sri Lanka and Vanuatu. However, the demand for organic cocoa products is growing at a very strong pace, as consumers are increasingly concerned about the safety of their food supply along with other environmental issues. According to Euromonitor International, global organic chocolate sales were estimated to have increased from a value of US$ 171 million in 2002 to US$ 304 million in 2005. Certified organic cocoa producers must comply with all requirements associated with the legislation of importing countries on production of organic products. The benefit for cocoa farmers is that organic cocoa commands a higher price than conventional cocoa, usually ranging from US$ 100 to US$ 300 per tonne. However, originating countries with smaller volumes can fetch much higher premiums. This premium should cover both the cost of fulfilling organic cocoa production requirements and certification fees paid to certification bodies. | | | | The Indian Chocolate Industry has come a long way since long years. Ever since 1947 the Cadbury is in India, Cadbury chocolates have ruled the hearts of Indians with their fabulous taste. Indian Chocolate Industryâ€™s Cadbury Company today employs nearly 2000 people across India. The company is one of the oldest and strongest players in the Indian confectionary industry with an estimated 68% value share and 62% volume share of the total chocolate market. It has exhibited continuously strong revenue growth of 34% and net profit growth of 24% throughout the 1990â€™s. The brand of Cadbury is known for its exceptional capabilities in product innovation, distribution and marketing. With brands like Dairy Milk, Gems, 5 Star, Bournvita, Perk, Celebrations, Bytes, Chocki, Delite and Temptations, there is a Cadbury offering to suit all occasions and moods. Today, the company reaches millions of loyal customers through a distribution network of 5. 5 lakhs outlets across the country and this number is increasing everyday. In 1946 the cadbury? s manufacturing operations started in mumbai, which was subsequently transferred to thane. In 1964, induri farm at talegaon, near pune was set up with a view to promote modern methods as well as improve milk yield. In 1981-82, a new chocolate manufacturing unit was set up in the same location in talegaon. The company, way back in 1964, pioneered cocoa farming in india to reduce dependence on imported cocoa beans. The parent company provided cocoa seeds and clonal materials free of cost for the first 8 years of operations. Cocoa farming is done in karnataka, kerala and tamil nadu. In 1977, the company also took steps to promote higher production of milk by setting up a subsidiary induri farms ltd. , near pune. In 1989, the company set up a new plant at malanpur, mp, to derive benefits available to the backward area. In 1995, cadbury expanded malanpur plant in a major way. The malanpur plant has modernized facilities for gems, eclairs, and perk etc. Cadbury operates as the third party operations at phalton, warana and nashik in maharashtra. These factories churn out close to 8,000 tonnes of chocolate annually. In response to rising demand in the chocolate industry and reduce dependency on imports, indian cocoa producers have planned to increase domestic cocoa production by 60% in the next four years. The indian market is thought to be worth some 15bn rupee (? 0. 25bn) and has been hailed as offering great potential for western chocolate manufacturers as the market is still in its early stages. Chocolate consumption is gaining popularity in india due to increasing prosperity coupled with a shift in food habits, pushing up the countrys cocoa imports. Firms across the country have announced plans to step-up domestic production from 10,000 tonnes to 16,000 tonnes, according to reuters. To secure good quality raw material in the long term, private players like cadbury india are encouraging cocoa cultivation, the news agency said. Cocoa requirement is growing around 15% annually and will reach about 30,000 tonnes in the next 5 years. brief introduction indian chocolate industry as today is dominated by two companies, both multinationals. The market leader is cadbury with a lions share of 70%. The companys brands like five star, gems, eclairs, perk, dairy milk are leaders in their segments. Untill early 90s, cadbury had a market share of over 80 %, but its party was spoiled when nestle appeared on the scene. The other one has introduced its international brands in the country (kit kat, lions), and now commands approximately 15% market share. The two companies operating in the segment are gujarat co-operative milk marketing federation (gcmmf) and central arecanut and cocoa manufactures and processors co-operation (campco). Competition in the segment will soonly get keener as overseas chocolate giants hersheys and mars consolidate to grab a bite of the indian chocolate pie. The uk based confectionery giant, cadbury is a dominant player in the indian chocolate market and the company expects the energy glucose variant of its popular perk brand to be singularly responsible for adding five per cent annually to the size of the company? s market share. market capitalization The indian candy market is currently valued at around $664 million, with about 70% share ($ 461 million) in sugar confectionery and the remaining 30% ($ 203 million) in chocolate confectionery. Indian chocolate industry is estimated at us$ 400 million and growing at 18% per annum. Cadbury has over 70 % share in this market, and recorded a turnover of over us$ 37m in 2008. size of the industry The size of the market for chocolates in india was estimated at 30,000 tonnes in 2008. Bars of moulded chocolates like amul, milk chocolate, dairy milk, truffle, nestle premium, and nestle milky bar comprise the largest segment, accounting for 37% of the total market in terms of volume. The chocolate market in india has a production volume of 30,800 tonnes. The chocolate segment is characterized by high volumes, huge expenses on advertising, low margins, and price sensitivity. the count segment is the next biggest segment, accounting for 30% of the total chocolate market. The count segment has been growing at a faster pace during the last three years driven by growth in perk and kitkat volumes. Wafer chocolates such as kit kat and perk also belong to this segment. Panned chocolates accounts for 10% of the total market. The chocolate market today is primarily dominated by cadbury and nestle, together accounting for 90% of the market. major players â€¢cadbury? s india limited â€¢nestle india â€¢gujarat co-operative milk marketing federation â€¢cocoa manufactures and processors co-operative (campco) â€¢bars count lines wafer panned premium â€¢cadbury? s dairy milk variants â€¢5-star, milk â€¢amul milk chocolate â€¢treat perk gems, â€¢tiffins temptation celebrations â€¢nestle milky bar bar one. latest developments â€¢chocolate-lovers may soon find their chocolate dearer if the problems plaguing the industry continue. Raw material costs have risen by more than 20 % in the last few years. Although retail prices have not increased, a rise in input costs will force the manufacturers to consider a price hike. the bigger players in the country such as cadbury, which leads the rs 2,500 crore chocolate markets in india with a share of 72%, will find it easier to absorb the surge in input costs as it has products at various price points in the market, said industry experts. Cadbury may also opt for a price hike, albeit marginal, if the current trend continues. Indian chocolate industry? s margin range between 10 and 20%, depending on the price point at which the product is placed. The input costs in india are under check owing to the 24% decline in the prices of sugar. â€¢the world? s leading manufacturer of high quality cocoa and chocolate products barry callebaut, has announced the opening of its first, state-of the art, chocolate academy in mumbai, india in july 2007. â€¢according to the analysis of the international market intelligence provider euromonitor, the relatively small indian chocolate market with volumes of about 55,000 metric tonnes of chocolate and compound per year is expected to grow on average per year by around 17. 8% between 2008 and 2012. Ferrero the italian confectionery giant of $8 billion has planned up for a new production facility in maharashtra with an investment of over $125 million to whip up some of its popular brands that include rocher and kinder. INDIAN CHOCOLATE INDUSTRY AT A GLANCE IN 2011 -2012 | Chocolate market in India is estimated to be around 1500 crores according to A C Nielson report, growing at 18-20% per annum. Cadbury is the market leader with 72% market share of India. The per capita consumption of chocolate in India is 300 gram compared with 1. 9 kilograms in developed markets such as the United Kingdom. Over 70 per cent of the consumption takes place in the urban markets of India. Margins in the chocolate industry range between 10 and 20 per cent, depending on the price point at which the product is placed. Chocolate sales have risen by 15% in recent years to reach 36000 tonnes according to one estimate. Another estimate puts the figure at 25000 tonnes. | | The chocolate wafer market in India is around 35 % of the total chocolate market and has been growing at around 13% annually. As per a study, the Indian candy market is currently valued at around USD 664 million, with about 70%, or USD 461 million, in sugar confectionery and the remaining 30%, or USD 203 million, in chocolate confectionery. The global chocolate market is worth $75 billion annually. | | Chocolate Market in India Facts Figures 1. Chocolate market is estimated to be around 1500 crores (ACNielson) growing at 18-20% per annum 2. Cadbury is the market leader with 72% market share 3. The per capita consumption of chocolate in India is 300 gram compared with 1. 9 kilograms in developed markets such as the United Kingdom 4. Over 70 per cent of the consumption takes place in the urban markets 5. Margins in the chocolate industry range between 10 and 20 per cent, depending on the price point at which the product is placed 6. Chocolate sales have risen by 15% in 2007 to reach 36000 tonnes according to one estimate. Another estimate puts the figure at 25000 tonnes 7. The chocolate wafer market (Ulta Perk etc) is around 35 % of the total chocolate market and has been growing at around 13% annually 8. As per Euromonitor study, Indian candy market is currently valued at around USD 664 million, with about 70%, or USD 461 million, in sugar confectionery and the remaining 30%, or USD 203 million, in chocolate confectionery 9. Entire Celebrations range marketshare is 6. 5% 10. The global chocolate market is worth $75 billion annually Companies 1. The chocolate market in India has only three big players, Cadbury, Nestle and Amul 2. New brands such as Sweet World, Candico and Chocolatiers are present in several malls 3. The largest target segment for Cadbury is youth 4. Delhi-based Chocolatiers, started with a small shop in south Delhiâ€™s Chittaranjan Park and has now ventured into malls and multiplexes in NCR, Mumbai and Bangalore, with focus on high-end or designer chocolates, a niche market of their own 5. Candico India is aiming for 400 locations across malls and multiplexes in the country by 2010. Companies Brands 1. Cadbury Cadbury, 5 Star, Bytes (chocolate snack), Celebration, Dairy Milk, Gems, Perk 2. Nestle Bar One, Kit Kat, Milkybar, Munch, Nestle 3. Amul Amul (Chocozoo, Chocomines) 4. Dairy Milk is the market leader 5. 5 Star (heritage brand which came to India in 1969) has a marketshare of over 14% Consumer Trends 1. Mithai- the traditional Indian sweats is getting substituted by chocolates among upwardly mobile Indians. Instead of buying sweats on Raksha Bandhan, sisters prefer offering chocolates to their brothers. This is the reason for sudden spurt in advertisement between July Sep by most of the companies 2. The range and variety of chocolates available in malls seems to be growing day by day, which leads to lot of impulse sales for chocolate companies 3. Chocolates which use to be unaffordable, is now considered mid-priced. Convenience over Mithai in terms of packaging and shelf life in making both middle class and rich Indians opt for chocolates 4. Designer chocolates have become status symbols. They are linked to oneâ€™s aspiration and lifestyle and malls are perfect points of sale as people usually are happy and gay at these destinations 5. Cadbury initial communication for Celebrations was concentrated on occasions like Diwali and Rakshabandhan. Over the last seven to eight years, the brand emerged as a good gift proposition for occasions and enabled people to come closer. Research done by Cadbury suggested that they should extend the plank of occasion-based gifting to social gifting i. e. all-year-round gifting options 6. Consumers can choose from wide range of chocolates, which initially was limited to Milk chocolates like DairyMilk and MilkyBar. In past few years we have seen so many SKUs with almonds, raisins and all sort of nuts. And how can we forget latest 5 star crunchy and Ulta Perk, which has opened new windows for consumers 7. In past, consumers had negligible inclination for dark chocolates. But now we have seen a change in the Indian palate, which is increasing the base of this sub-segment Advertisement Trends (AdEx division of TAM Media Research) 1. Chocolate advertising rose by 30 per cent during January-November 2007 compared to January-November 2006 2. Maximum chocolate advertising was during Raksha Bandhan across 2005 and 2006 and January-November 2007 3. As expected chocolate advertising skewed towards kids channels and regional GEC took the second position 4. Cadbury India Ltd rules chocolate advertising on television 5. 17 per cent more advertising during third quarter 2007 (Raksha Bandhan festival) compared to first quarter 2007 6. Regional GEC took the second place with a 21 per cent share ad volumes of chocolates, followed by Hindi movie with 13 per cent share during January-November 2007 7. Among regional GEC, maximum advertising of chocolates was on Malayalam and Bengali channels 8. Cadbury India Ltd was way ahead of its peers with 66 per cent share followed by Nestle India Ltd and Parle Products Pvt Ltd during January-November 2007 9. During January-November 2007 the number of new chocolate brands advertised decreased to seven from 12 during 2006 10. Nestle Munch Pop Chocolate led the chart of new chocolate brands advertised on television during January-November 2007 Some BTL Activities 1. Cadbury India has tied up with leading coffee chain Cafe Coffee Day for direct sampling of the product in top cities External Environment 1. The prices of cocoa and milk, the chief ingredients used in chocolates, have gone up by 50 per cent, while the price of sugar, another important raw material, has come down. The overall input costs have gone up by 20 per cent. If the prices of these commodities keep increasing, companies will be forced to increase the prices. India imports most of its cocoa requirements. The prices of cocoa have risen globally due to unavailability of the commodity 2. US-based chocolate-maker Hersheys is mulling a foray into the Indian chocolate market through its joint venture with Godrej Cadbury Dairy Milk Silk Cadbury Dairy Milk has captured the heart of Indian consumers for over six decades; but there was room for a more premium entrant in the category. And enter CDM Silk. Most CDM lovers thought that nothing could taste better, but CDM Silk came as a welcome surprise! It is creamier, smoother, and tastier. Its dome shaped cubes pack more chocolate and hence provide a superior eat experience. Launched in January 2010, with a tantalizing taste that tempts the taste buds, CDM Silk delivered an exquisite chocolate eating experience in the Indian market. Our Advertising: The advertising highlights the joy of savoring CDM Silk and builds on its creamy and smooth experience that instantly melts in your mouth. This brand promise was beautifully captured by the tagline `Have You Felt Silk Lately? â€™ The campaign comprised of three commercials which showcased different protagonists indulging and savoringCadbury Dairy Milk Silk chocolate, with innocence and unabashed joy, unmindful of their surroundings.
Welfare To Work Programmes
Welfare to work programmes have been used by governments since the 1980s to articulate a desire to replace passive support for unemployment and active measures to help encourage people to get into paid work. The Labour government reiterated this principle, but took a number of new approaches building up to an ambitious programme for welfare reform for people of working age. This essay will study the origins and rationale of New Labours welfare to work programme. It will also examine the impact it has had on people and unemployment since the programme has been introduced.
While there is evidence that welfare to work programmes has been around before 1997 (when Labour came into power), their results were patchy and they had not been continuous. When the Conservatives were in power, their policies were criticised because it was more concerned with minimising fraud than maximising work, and it encouraged dependency and trapped people in unemployment. By 1995, Gordon Brown, the then Shadow Chancellor of the Exchequer, argued that government could not simply create jobs, but â€œits role was to promote macroeconomic stability and provide economic and employment opportunities for allâ€ (Field White, 2007). He then proposed that the future government should launch New Deal for under 25s.
Subsequently, 1996 the unemployed in Britain were redefined as â€œjobseekersâ€ by the 1996 Jobseekers Act (HMSO, 1994). To qualify for the new jobseekers allowance (JSA) required that unemployed individuals to enter an agreement indicating the steps they intended to take to look for a work and the minimum wages they would accept. Jobseekers were given guidance in looking for jobs in a particular way, to take other steps to improve their employability or participate in training schemes. Under the JSA agreement, claimants have to commit to active job seeking behaviour, and they had to sign a declaration to which they understood that their benefit eligibility would be affected if they do not do enough to find work, are deemed unavailable for work or act in any way to reduce their chances of getting work. Failure to comply with the jobseekers agreement will ultimately result in benefit sanctions. It was believed that most unemployed looked for jobs but the JSA system was designed to intensify activity and put pressure on those who were genuinely not looking for work. However, following the introduction of JSA there was increased job search activity with the newly unemployed but it was less effective with the long term unemployed.
New Labours welfare to work programme is based on a typically American â€œworkfareâ€ approach. Workfare refers to the requirement that people who are judged able to work and available to work must seek and accept work in the regular labour market. The reforms have which have taken place have originated and been influenced by US-styled workfare. However, this move towards a US-styled welfare is not a new trend, the British policy makers have been influenced by US welfare systems in the past when the Conservatives were in power. Governments have always been cautious and resistant about being referred to as a US-styled workfare, opposed by both the right and left for different reasons: â€œthe right disliked the expense involved setting up training schemes and the left sees any element of compulsion as anathemaâ€ (Daguerre, 2004). Nevertheless, just before Conservatives lost office, they moved more towards workfare through a proposed large-scale extension of â€œProject Workâ€ (A programme requiring the long-term unemployed to work part time in community projects). The start of the programme Restart, The Stricter Benefit Regime and Employment Training programmes was also a step closer to a US-styled workfare (Peck, 2001).
New Labours flagship was New Deal, it placed more emphasis on training than any previous policies, and it also promoted compulsion for target groups. The new welfare system under New Labour appears to have strong echoes and similarities to the US-styled workfare and this can be clearly seen from the Labour Partys policies which indicate strong emphasis on making work pay and not the other way round, in which dependency on benefits would pay for people. Moreover, the redesign of New Deal in 2001, Labours second term, was working more towards moving as many people of working age into the labour-market. This is influenced by American ideas in a few ways. Firstly, the government was promoting a â€œwork first approachâ€ and getting people to work and not rely on benefits. Secondly, the formation of the â€œJobcentre Plusâ€, which is a single point of service to all benefit claimants. This is partially based on American Administration. Alistair Darling, the Chancellor of the Exchequer quoted that the Jobcentre Plus is there to provide everyone with the help they need to find work, quickly as possible, and it is a work first approach (Daguerre, 2004). Thirdly, the greater compulsion is based on the American approach. This involves the introduction to work-focused interviews for benefit claimants, particularly for lone parents.
In 1997, the future Prime Minister Tony Blair spoke about New Labours approach to welfare reform would focus on services, not just cash benefits, and would be designed to help people meet change in an increasingly insecure world. New Labour would increase the employability through education and skills and an active employment service. Labour came in to power in 1997 and one month after winning power, the Prime Minister Tony Blair confirmed that the greatest challenge to his â€œwelfare to workâ€ government was to refashion the institutions to bring new workless class back in to society (Finn, 2003). Shortly following this speech, in 1997, New Deal for 18-25 years old was introduced. It became something of a political mantra for New Labour, in which there would be â€œno fifth optionâ€ of a life on benefit; and those refusing to comply with the rules would be docked 40 percent of their benefit (Peck, 2001). New Deal represents the first real attempt to implement activation policies for the unemployed in Britain.
Labours first term in government highlighted the performance of the economy and an increase in employment. At a time when there was a much needed change in the welfare state, New Labour came in to power and did just that. The Prime Minister Tony Blair promised employment opportunities for all and committed the government towards full employment over the next decade. When the Conservatives were in power, their policies made people dependent on benefits and trapped them into unemployment. New Labours welfare to work programme would put a stop to this and make work pay, and not make benefits pay. Labours reasons for a reform on welfare state is to bring the workless class back in to society. Blair made a speech saying; â€œNow at the close of the 20th century, the decline of old industries and the shift to an economy based on knowledge and skills has given rise to a new class: a workless class. A large minority is playing no role in the formal economy, dependent on benefits and the black economy Today the greatest challenge for any democratic government is to refashion our institutions to bring this new workless class back into society and into useful work, and to bring back the will to win.â€ (Tony Blair, speech at the Aylesbury Estate, June 1997) The rationale of New Labours welfare to work programme is set to help those that are disadvantaged into employment and reduce the reliance of benefits; the end result would be an increase in employment and reductions on people living off benefits. Blair insisted that there would be â€œno no-go areas for New Labourâ€ and at the heart of all the policy changes, welfare reform was on the top of the list. Welfare to work is defined by New Labour both as political and as an economic project; it is concerned with rejoining the poor in to paid work, and help people get into real jobs to tackle poverty. The task of the Labour government was seen one of radical and work reinforcing reform, and the task for welfare recipients would be to cooperate and respond enthusiastically to the new opportunities (Labour Party, 1997).
The New Deal programme was introduced after two decades in which child poverty had doubled; the number of people on incapacity benefit had risen by 1.5 million; and more than 80,000 young people had been on unemployment benefit for more than a year (DWP, 2008). New Labour had promised to get 250,000 under 25 years-olds off benefits and into work. The welfare to work budget was funded by the way of a Â£5.2 billion through a â€œwindfall taxâ€ on the profits of privatised utilities (Peck, 2001). The first priority was to tackle long-term youth unemployment. The New Deal for Young People (NDYP) was introduced to begin with; then New Deals for the long-term unemployed (New Deal 25 Plus); New Deal for Lone Parents (NDLP); New Deal for partners was introduced for the partners of the unemployed; New Deal 50 Plus; and New Deal for Disabled People (NDDP) was introduced, which was largely provided by voluntary and private sector. The objectives of the New Deals were to increase long-term employability and help young and long-term unemployed people, lone parents and disabled people into real jobs.
NDYP is a mandatory programme for 18-25 year-olds who have been claiming jobseekers for six months. However, it is at the six month stage, benefit becomes conditional and claimants enter another stage of New Deal. New Deal has three stages; a gateway, an options and a follow through. Each of these stages aims to enhance the chances of people landing a job. The gateway period comes after six months of unemployment and lasts up to four months. At this stage, individuals are assigned to a personal advisor, who helps claimants find work and provides guidance. If after the four month gateway period participants fail to find work, they then enter the option stage. During this period each individual is required to take up the following four options: employer placement, voluntary-sector work, education or training, or a membership of an environmental task force (Field White, 2007). These stages on the New Deal programme are in place to aid people to gain knowledge, experience, skills, and therefore better their chances of finding real jobs. The purpose of the New Deal programme is to improve employability, because in the end employment goes to the employable and in this increasing global competition, individuals need to be able to adapt to learning new skills.
New Deal has promoted work for lone parents and disabled people, for whom job search is a condition of receiving benefit. Work-focussed interviews have become mandatory and it is an approach to which all working age individuals who are living on benefits consider the possibility of entering the labour market (JRF, 2004). Until recently in the UK lone parents were not obliged to register for work until their youngest child was 16. However, this has now changed and as proposed by the Green Paper, from October 2008 lone parents with older children will no longer be entitled to Income Support solely on the grounds of being a lone parent (DWP, 2007). Instead those who are able to work can claim Jobseekers Allowance and they will be required to look for work. From October 2010, lone parents with the youngest child aged 7 or over will no longer be able to receive benefits on the grounds of being a lone parent.
Labours welfare to work programme has introduced major tax and benefit reforms which, in combination with new rights at work, including the national minimum wage, are targeted at making work pay. The development of tax credits has expanded and transformed support for people with low incomes. The family credit was replaced by Child Tax Credit for parents with low income and the Working Tax Credit was introduced for those on low earnings. Together with the minimum wage, it has given people the incentive to work. Tax Credits have been linked to a wider objective of reducing child poverty, and it lifted relative child poverty by half a million (Finn, 2003). The government believes work is the best route out of poverty, and by introducing Tax Credits, the government is improving incomes for all children with parents that are not in paid work or in low-paid jobs. Tax Credits have improved unemployment and poverty traps, by ensuring individuals are entitled to more from working than from benefits. However, this policy has been criticised for increasing dependency on employment, extending means testing up the salary scale and the potential impact on work incentive and employer wage-behaviour.
The New Deals have been subject to an intense evaluation programme. The impact of New Labours welfare to work programme has been significant in reducing unemployment, and figures illustrate that â€œthe number of people claiming Jobseekers Allowance is at its lowest for over 30 years. The number of long-term claimants unemployed has fallen from more than half a million to 125,000; while for young people it has fallen from 85,000 to fewer than 7,000â€ (DWP, 2008). By the end of 2001, it was suggested that half a million people had found jobs through the various New Deals and 53 percent of NDYP leavers were entering jobs (Finn, 2003). The most dramatic impact was with those who were unemployed for over a year, where the number fell from 90,700 to 5,100, a falloff almost 95 percent (JRF, 2004). Various independent researches confirm that New Deal has been successful in helping people find work. Research by the institute of Fiscal Studies found NDYP increased the probability of finding a job by 20 percent (IFS, 2001). Also the introduction of personal advisors (NDPAs) has had a positive effect on participants, and evidence consistently has recognised the individualised help given by the NDPA as the key element of success.
Even though findings done by independent researches imply that NDYP has reduced long-term youth unemployment, some people say the reduction of unemployment has merely reflected the strength of the economy, as since 1997 the economy has produced an additional 2.9 million jobs (JRF, 2004). The impact of New Deal has not been as significant as it was predicted and set out to be. Figures prove that youth unemployment is higher than when Labour was elected in 1997, and rising. Since 2001, figures on youth unemployment have been increasing, and those who are on NDYP and unemployed under six months has grown. This is because little seems to happen in the first six months of unemployment, and JSAs conditionality is increasingly ineffective as New Dealers and staff simply wait for the programme to start, which is six months into unemployment. Figures illustrate that by 2007 there was an increase of 82,000 young adults unemployed since 1998 (Field White, 2007). Similarly, the number of jobless young people, unemployed between six to twelve months is increasing and it stands well above the level at the start of the New Deal in 1998. What is more shocking is the level of unemployment for those who have been out of work for over 12 months; it has also increased dramatically since 1998, and the same applies for those who have been unemployed for more than two years. Overall, the number of young people unemployed, whether it is short-term, or long-term, it is on the increase.
Claimants who have completed their New Deal, and still have not found work, are required to re-enter the New Deal, and then they are known as â€œretreadsâ€ (Field White, 2007). The number of retreads has continued to grow with some claimants entering New Deal not only for the second time, but a third, fourth or even fifth time. New Deal has been unsuccessful in finding work, and people are left jobless and dependent on benefits. This shows a structural weakness of the Governments New Deal programme, and data suggests that New Deal seems incapable of adapting to the needs people who find it difficult to find work, i.e. the very group which is most reliant on the New Deal for this purpose. Given that the government believes that the New Deal programme is to be the most effective way to ensure that there is no fifth option of remaining on benefits, why is there a growing number of people going on to New Deal for a second, third, fourth or fifth time? The government is contradicting itself here.
Long-term statistics suggest that men increased employment in the first six months after qualifying for NDYP. However, this disappeared over the following twelve months (Wilkinson, 2003). Women, do not do as well as men, and they tend to go the whole way up to the follow up period, implying a lower level of increase in employment. In 2007 there were 1,043,000 young people not in education, employment or training (Neets), which is a rise of 131,000 since 1997. However, despite the rise in youth unemployment, the proportion of young people on the New Deal is falling.
Lone parents have suffered a complex range of barriers to work, ranging from attitudes of employers, access to childcare, to difficulties with meeting housing costs and the complexity of the welfare system. Findings were complemented and confirmed by a study of non-working lone mothers, which found that the majority of them had a general desire to work but were constrained from doing so by slim financial gains or by lack of suitable or affordable childcare (JRF, 2004). Paying for childcare was a significant barrier to work for lone parents. With the new policies which are being introduced in October 2010 for lone parents, it is most likely to increase unemployment rates with this target group and create further barriers.
The increasing rate of unemployment is questioning New Labours rational of New Deal and its attempt to reduce dependency on benefits. Currently, unemployment is rising and New Deal has been criticised and been labelled as a failure. New Deal relies heavily on assisted job search and as we can see it is far from recession proof. This is why Labour has a new development which is called, Flexible New Deal. This new programme came in to force in autumn 2009, and it replaces the New Deal 18-24 and 25+ and Employment Zones programmes (DWP, 2008). Flexible New Deal has set out to provide an opportunity for Prime Contractor organisations from the private, public and third sectors to work together in partnership to deliver this new programme across all Jobcentre Plus districts. There are five core principles of the Flexible New Deal:
A stronger framework of rights and responsibilities to move benefit customers from being passive recipients to active jobseekers.
A personalised and responsive approach to individual customer needs which will provide tailored employment and skills support to meet the needs of both customers and local employers.
A partnership approach with public, private and third sector organisations working together to maximise innovation, leading to more and better outcomes.
Devolving and empowering communities for future sustainable employment which will be at the heart of neighbourhood renewal.
Not just jobs, but jobs that pay and offer opportunities for progression, with an emphasis on sustaining and progressing in work to ensure all customers who need help to develop their skills have access to the relevant pre-employment and in-work training.
The goal of Flexible new Deal is to eradicate child poverty by 2020, but this is not going to be an easy task. We are yet to see how successful this new programme will be in ensuring we move towards full employment and opportunity for all.
In conclusion, New Labours welfare to work programme has helped to overcome unemployment at a time when the labour market was expanding and on a boom. Employers are more likely to take on the unemployed, as they desperately need staff to fill the vacancies. New Deals have helped more than 1.8 million people get into work in the last ten years. However, figures demonstrate how the rate of unemployment, particularly with the 18-25 year olds, has risen and is continuing to do so. The very rationale of New Labours welfare to work is being contradicted, as the unemployed are not being given realistic employment opportunities, and people are still signing on for benefits, not for work. The New Deal programme is clearly not adapting to fit the needs of participants or the labour market, as people are entering New Deal not only for the second time, but a third, fourth or more occasions. New Deal should be implemented from day one of unemployment for young people, as the largest group are those who unemployed for up to six months, which is before the New Deal programme kicks in. More of the same will not work, and the government needs to change the way New Deal is programmed and fit it around the needs of individuals and help them back into the labour market. We will have to wait and see how the development of the Flexible New Deal helps to reduce unemployment, but if the current situation is anything to go by, the government has a lot to prove.
Daguerre, A. (2004) Importing Workfare: Policy Transfer of Social and Labour Market Policies from the USA to Britain under New Labour, Social Policy Administration. p41-50.
DWP (2008) Transforming Britains Labour market: Ten years of the New Deal, Department for Work and Pensions, London. p2-10
Field, F. and White, P. (2007) Welfare isnt working The New Deal for Young People, Reform, UK. p7-23
Finn, D. (2003). Employment Policy. In N. Ellison C. Pierson (Eds.), Developments in British social policy 2 (pp. 111-128). Basingstoke: Palgrave Macmillan. p111-128
Peck, J. (2001). Another New Deal: Workfare, United Kingdom style. Chapter 7 In J. Peck (Ed.), Workfare states (pp. 261-340). New York: Guilford Press. p261-315
Kay, J. (1998) Evolutionary Politics. Prospect July: 31-35
Wilkinson, D. (2003) New Deal For Young People: Evaluation Of Unemployment Flows, Policy Studies Institute, London.
JRF-Joseph Rowntree Foundation. (2004) Labours welfare reform: Progress to date http://www.jrf.org.uk/publications/labour%E2%80%99s-welfare-reform-progress-date (Date Accessed: 11/04/10)
IFS- Institute for Fiscal Studies. (2001) Evaluating the employment impact of a mandatory job search assistance program. http://www.ifs.org.uk/publications/1734 (Date Accessed: 11/04/10)
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