State spends €1,500 a year per unemployed

The money is spent ineffectively and is not aimed at those groups at-risk.

The long-term unemployed find it harder to return to work. The long-term unemployed find it harder to return to work. (Source: Sme)

The labour offices should focus particularly on low-qualified jobseekers and the unemployed who have been without a job for more than 12 months, as they belong to the group who have the most difficulties finding a job. Moreover, they are the most expensive for the state, according to the latest report of the Institute of Financial Policy (IFP), which runs under the auspices of the Finance Ministry, and the Labour Ministry’s analytical centre.

In addition, the money allocated within the active labour market is not aimed at helping the long-term unemployed, with the support of their public employment not being successful, the report shows, as reported by the TASR newswire.

The average spending on active and passive policies per one unemployed person amounts to €1,500 a year. The state costs per unit on passive policies aimed at the long-term unemployed amounts to €7,300 on average, if these people are without a job for 5.2 years. The average unemployed person costs the state about €2,300 for 2.6 years.

The total spending by labour offices and the Central Office of Labour, Social Affairs and Family (ÚPSVaR) amounted to €1.5 billion in 2015, of which 79.1 percent were social benefits, 8.8 percent active labour market policy tools, and 12.1 percent the operational costs and capital expenses, the analysts claimed. Compared with abroad, the spending of offices in the employment services are relatively low.

The labour offices however differ when dealing with the unemployed, partly based on regional conditions within the labour market.

“The success of placing the unemployed in the labour market is negatively affected particularly by the higher work burden on employees of the labour offices and the longer unemployment period,” analysts said, as quoted by TASR. “A more effective placement could bring additional employment to roughly 5,700 of the unemployed and save at about €7 million a year on state expenses.”

Though the organisational reform of the labour offices increased the capacities of their employees to work with the unemployed, their burden is still higher than abroad. This applies especially to districts with a higher jobless rate, the analysis suggests.

Long-term unemployed still face problems

Regarding the use of the money, most funds go on active labour market policies. These are however different than abroad and do not target the most important groups.

“A significant part of the expenses on active labour market policies, i.e. 60 percent, is aimed at the short-term unemployed, while only some 40 percent goes on groups for which it is difficult to find a job,” the analysis reads, as quoted by TASR.

The most money goes on creating new jobs, while there are not enough funds for education and training programmes.

As for the long-term unemployed, the state fails when giving them public jobs. The activation works for example still have the character of social policy.

“The relatively successful tools, on the other hand, do not aim to help the long-term unemployed find a job,” the analysts claimed.

The labour offices should focus on high-risk groups of the unemployed, while more money should go on consulting. The number of first-contact employees at the labour offices should increase, while the education programmes should be supported more, TASR wrote.

The analysts also recommend creating analytical capacities within the Labour Ministry, with a similar operation to the IFP. These should then evaluate the projects within the Value for Money concept, and use the results when preparing the budget, they added.

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