Councils could save over 600 million kroner a year by getting more immigrants and refugees into work, work placements or education according to a new study carried out by Ugebrevet A4 for LG Insight.
The study shows that the cost of immigration varies widely across Denmark, but that huge savings could be made if less successful councils managed to emulate the more successful ones.
“In a time of resource scarcity there are councils that are managing to keep their integration efforts at a high standard,” Lars Larsen from LG Insight told Ugebrevet A4. “It shows a good business sense because getting immigrants and refugees into work lowers the councils' welfare expenses.”
Danish councils spent 2.5 billion kroner in 2011 in cash benefits for unemployed refugees, immigrants and their descendants. In Lemvig, the most efficient council, the annual cost per immigrant was 22,204 kroner, whereas Aarhus Council paid out 49,836 kroner per year per immigrant.
The high costs were closely related to the proportion of immigrants that remained out of work after six months of receiving unemployment benefits. Odsherred Council was the most successful at this, getting 25 percent of its immigrants into work within six months, and the council paid out only 23,288 per immigrant per year.
Lolland Council, on the other hand, paid out 47,200 per immigrant per year and only managed to get nine percent of immigrants into work after six months.
In Lemvig Council, where 17 percent of immigrants found work after six months of unemployment, spokesperson Mette Lund said that their success is down to keeping immigrants active.
“We have no immigrants or refugees that are passive,” she told Ugebrevet A4. “They are all either in work placements or being educated.”
Lemvig Council also provides a contact person for immigrants and refugees who can assist them in most areas of life, such as healthcare or employment, while the council's close contact with employers means they can get immigrants into work quickly and efficiently.
“They are deployed immediately, preferably at businesses or in training. Nobody is waiting around here," Lund said. "If they are unemployed for more than three months they lose the belief they can [get a job] and they become unmotivated. That’s why they need to get going quickly.”
Lemvig’s initiatives match recommendations by KORA, the research agency for Danish councils, for maximising integration.
These recommendations include placing integration high on the political agenda, prioritising getting immigrants into work, ensuring a close co-operation between council employees that work with immigrants, and ensuring good contact with businesses that hire immigrants.
KORA also identifies the use of work placements (virksomhedspraktik) and jobs where the salaries are partially covered by the council (løntilskud), as particularly effective tools for getting immigrants into work.
“Business-orientated activation is especially effective with this group because many immigrants are initially unfamiliar with the labour market,” KORA spokesperson Hans Hummelgaard said.
The success rate of councils also varied upon the background of the immigrants. Ugebrevet A4's analysis showed that immigrants from war-torn parts of the world have a considerably harder time finding employment than those arriving from stable countries with health economies.
But despite the fact that both Randers and Aarhus councils housed many immigrants from troubled areas of the world, Randers still only pays only around 32,000 kroner a year per immigrant while Aarhus pays 49,836.
Randers Council spokesperson Ole Andersen said their success was due to not differentiating between immigrants and the rest of the unemployed people in the council, while Aarhus Council spokesperson Hans Halvorsen argued that the variation in the type of industries in the different councils could explain the different success rates.
“Randers might have more heavy industry which requires unskilled labour, while our businesses are more knowledge-based,” he told Ugebrevet A4.
And in Copenhagen, where the City Council pays out 45,214 kroner per immigrant per year, spokesperson Kaj Over Christiansen argued that the figures do not take into account the fact that fewer immigrants are given early retirement benefits.
“Many councils place immigrants and refugees on early retirement. We don’t," Christiansen told Ugebrevet A4. "Instead we try to activate them, and that costs more.”
The study acknowledged that some councils could reduce their financial burden by offsetting the costs to the state. For example, councils are responsible for paying out the lowest cash welfare benefit, kontanthjælp, to unemployed immigrants. Paid work placements are covered by the state, however, and are also one of the tools identified by KORA as being effective for getting immigrants acquainted with the labour market.
With such varying success rates between councils, and hundreds of millions of kroner on the line, the immigration minister, Karen Hækkerup (Socialdemokraterne), said councils needed to improve their integration programmes.
“Integration programmes are working really well in some councils and less well in others [and] I am dedicated to ensuring that their efforts are improved,” Hækkerup told Ugebrevet A4, adding that improving integration into the workforce makes good socio-economic sense. “[The problem] is not that we are using too much money, but rather that we are not getting much out of the money we spend.”
