Progression Starts With Entry

20th February 2015

Responding to the publication of ‘No Limits: from getting on to getting by‘, Charlotte Pickles, Senior Research Director at leading think-tank Reform discusses how we can address the specifics of unemployment and progression:

Earlier this month, DWP Director General Jeremy Moore told a Reform conference that Britain is very good at getting people into work, but more needs to be done to help people progress once there. This is certainly true for the bulk of people making the transition from benefits into work, though more needs to be done to support those with more complex barriers. Nonetheless, whatever its political make-up, an incoming government will inevitably make in work “progression” a key priority. No Limits: from getting by to getting on is a timely and important contribution.

However, within this, we need to be clear what exactly it is we’re trying to address. Discussions about low pay, low hours, low skill jobs can miss the fact that each of these elements may benefit from specific reforms – and that for many, getting on the first rung of the employment ladder remains the most pressing issue.

Take low skills. To state the obvious, this is not just a problem of progressing in the labour market, but of joining it in the first place. ONS analysis of the 2011 census data shows that fewer than half of those with no qualifications are in employment, versus eight in ten of those with at least one qualification. It is absolutely the case that helping people to increase their skills should enable them to progress in work, but, as any Work Programme provider will tell you, better integration between skills and employment services is needed just to get those furthest from the labour market on the first rung.

Addressing low pay as its own problem is also key. Of course we want entry level jobs to provide a stepping stone to increased earnings, but we also want those jobs to pay a fair wage in themselves. The Government currently pays out around £30 billion in Tax Credits, the vast majority of which goes to working families. Tax payers are subsidising employers paying wages deemed too low for families to survive on. With one in five workers earning less than a living wage, government and business should be looking at their respective roles and responsibilities in tackling this. Reducing the Tax Credit bill might also enable greater investment in the sorts of services that NIACE are arguing could help people progress.

In a Universal Credit world these issues become all the more important. The distinction between “in work” and “out of work” benefits is blurred, with those in work not deemed to be earning enough subject to conditionality. A new approach to employment support is needed that (a) ensures a more seamless offer of support from unemployment to progression and (b) introduces support for those in work but needing to earn more (through increased earnings and/or hours). A payment by results model linked to increased earnings (or a reduction in Universal Credit entitlement) would therefore appear sensible.

There is no doubt that a personalised approach which integrates the current set of fragmented services is the right way to proceed. Nor that services should be offered via “trusted” agents. The National Advancement Service is therefore certainly worth testing, all the more so given the limited evidence-base for what works to enable progression.

However, whilst we must embrace ideas and initiatives that seek to move people from “getting by to getting on”, we must not lose sight of the need to support people to move into work in the first place. Work is itself good for people, clearly “good” work is even better.