Unemployment falling, but many still left behind

The recovery is not dealing everyone an even hand.

The recovery is not dealing everyone an even hand

Today’s labour market statistics show that the working age employment rate is now 73.1 per cent, the same level seen in the pre-recession peak of late 2004 and early 2005. The unemployment rate has fallen again to 6.5 per cent, its lowest level since the start of the recession in 2008.

But amid all this good news on the job front, we need to bear in mind that the recovery is not dealing everyone an even hand, and the government’s key back-to-work support programme needs fundamental reform if it is to have a genuinely transformative impact.

The Work Programme aims to help claimants of Jobseeker’s Allowance and Employment Support Allowance find sustainable jobs, but fails many participants. Research from IPPR shows that only around one in 20 ESA claimants find a sustainable job outcome.

An OECD report published yesterday offers some pointers for reforming the coalition’s back-to-work policies – but more drastic action is needed if we are to genuinely improve employment opportunities for the most disadvantaged jobseekers.

Connecting People with Jobs, a new report from the OECD, has reviewed the UK’s Work Programme and recommends several areas for improvement. Critically, the report argues that an increase in funding is needed to help claimants least connected to the labour market. They also advocate reconsidering the market structure of contract providers to generate more competition between firms.

On top of this, the authors emphasise that greater importance should be given to finding good quality job matches for jobseekers – helping to ensure that jobs are sustainable, rather than a quick fix.

Last month IPPR set out a comprehensive new agenda to build a stronger society in The Condition of Britain. We advocate that the next phase of the Work Programme should go further than the OECD’s recommendations; focusing support where it can be most effective – on long-term jobseekers and those recovering from temporary health conditions.

Back-to-work strategies such as supported job search and help maintaining a CV tend to be helpful for the majority of jobseekers, but are rarely effective for people with long-term or chronic health conditions that reduce capacity to work.

For jobseekers participating in the Work Programme who have not found work after a year we should provide a guarantee of paid work experience. As the OECD report suggests, provider contracts need to be reviewed and based on more meaningful economic geographies, closely tied to city and county-based economic development strategies, local business support, and adult skills provision.

For ESA claimants with a long-term health condition or disability, a fundamental rethink is necessary. An overwhelming majority of ESA claimants who have participated in the Work Programme end up with no better (and possibly worse) employment prospects after completing the two-year programme.

In The Condition of Britain we propose ‘New Start’, a locally-led supported employment programme with integrated budgets and incentives for success.

While the latest employment figures look promising, we still have further to go to reach full employment. Without fundamental changes to welfare-to-work support the recovery risks ignoring those furthest from the labour market.

Izzy Hatfield is a researcher at IPPR

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