Delivering full employment

Almost three in four people of working age are in work, a high employment rate by international standards. The Government aims to have the highest employment rate of the G7 countries - at 73.1 percent, we are currently behind Germany (73.7%), and Japan (73.2%) in the OECD rankings. There are currently significant inequalities in employment opportunities between different groups and areas of the country.

Since its establishment in 2011, the Work Programme has been moderately successful in increasing employment; however, this average performance masks variations for different groups of people and in different areas. Whilst it has performed near or above expectations for Jobseeker’s Allowance claimants, for Employment and Support Allowance claimants performance has long been below expectations.

Our analysis also finds that key disadvantaged groups – and in particular older people and disabled people – are substantially less likely to find work through the programme than other groups. For example, only around 50% of people with health problems and disabilities are in work. Narrowing these inequalities will be essential to achieving full employment.

The case for greater local involvement in increasing employment is founded on two arguments:

  • Impact. People furthest from the labour market and with multiple disadvantages are likely to need support from a number of services, such as health, housing and training, as well as employment support. There is perhaps a greater chance of integrating and personalizing this support when services are managed at a local level; and
  • Efficiency. For example, co-location of services and utilizing the contact that some services have with people to promote other support can deliver efficiency savings. This is particularly important given the level of savings that many public services will need to deliver in the coming years.

Our devolution ask

Future employment programmes should be co-commissioned by cities and local areas, with a pathway to further devolution for areas that can demonstrate improved impact as a result. Co-commissioning allows local areas being able to influence the design of nationally commissioned programmes and to align locally commissioned provision alongside it or around it.  Co-commissioning should be a core feature  of the successor to the Work Programme for people who are long-term unemployed, due to be commissioned during 2016.

However, we think devolution of responsibility for employment support for disabled people, where local areas can show how they would boost investment and deliver improved results. We have proposed a specialist employment programme for disabled people, bringing together existing support for ESA claimants under the Work Programme and Work Choice. We propose that this programme should be fully devolved to local areas who can demonstrate their readiness and commitment to improved results.

Within the latest Growth Deal for Greater Manchester we have seen the emergence of “joint” commissioning, where they have been given permission to commission the programme within tight boundaries set by DWP, and underpinned by matching their own budget. We welcome this development and would like to see this extended to all those areas that have proven capacity, capability and budget.

How we can help

Together with Inclusion, who we will merge with in January 2016, we have a long track record of supporting local areas to monitor and maximise performance of employment services, including:

  • What Works and programme design. We are experts in understanding what works and how effective labour market programmes are designed and commissioned. This has recently included detailed work for the Republic of Ireland’s new national programme for the long-term unemployed.
  • Labour market information. Inclusion provides local labour information analysis, allowing local areas to map their jobs and skills needs. This includes running the London Employment and Skills Observatory.
  • Focus on outcomes. We have longstanding experience in evaluating programmes on behalf of the Department of Work & Pensions, such as the implementation of the Work Programme. We have proposed practical changes to employment programmes are measured to focus more on how they improve people’s job and career prospects.

For more information please contact Tony Wilson