How to get Britain back to work
Addressing his party conference as prime minister for the first time, Keir Starmer made it clear that moving people into work is a priority for his government. He said even the long-term sick should be looking for a job where possible.
In the last fourteen years, progressively more demands have been made on UK benefit claimants to prove that they are looking for a job. This approach is not based on evidence but rather rooted in an ideology with international reach. (Similar approaches have been seen in places like Australia and Ireland).
This involves a simplistic carrot-and-stick model of human motivation to work, and a “work-first” doctrine of getting people into the first available job irrespective of its appropriateness or sustainability.
But as a new report makes clear, looking at people’s lives in a more holistic, long-term way, with a sensitivity to the barriers they face is more likely to get results. Rather than work-first, we need a career-first approach.
Since the start of the COVID pandemic, levels of economic inactivity in the UK have grown significantly. Fewer workers are entering the labour market and more older people are leaving the workforce early. The number of people not working because of long-term illness has also risen substantially.
This isn’t great news for the new Labour government that is counting on economic growth to get the country into better financial health. It is hard to grow the economy with improved efficiency because that requires investment. A much easier route is to increase the size of the workforce.
Recognising the risks of economic inactivity, the Commission for the Future of Employment Support was launched in December 2022 by the thinktank the Institute for Employment Studies to review the public services that help people to find a job and employers to find staff.
Its newly released report places employment support in the wider context of the challenges in the UK labour market and its effect on economic growth. With the UK government ruling out raising the three main taxes, it must prioritise economic growth. This is why economic inactivity in the workforce really matters.
The commission reserves its strongest criticism for the extent to which employment support has become entangled with welfare conditionality. That is, making behavioural demands on claimants, using surveillance to ensure they comply, and using sanctions – typically withholding benefit payments.
Adults lead complicated lives, and they are unemployed for a reason (or more often, for multiple reasons). This may be to do with skills, confidence, health, local geography, the needs of dependants or many other factors. These issues will not go away if a service fails to address them. So effective career support must consider the whole person and pathways to sustainable work.
A jobs and careers service
The report’s recommendations are aligned with the Labour party promise to create a jobs and careers service, one of its manifesto pledges to kickstart economic growth. Labour has suggested bringing the Jobcentre Plus network together with the National Careers Service.
The commission recommends three modes of delivery: local offices, an online service and outreach for those facing the most significant barriers. It also recommends an entitlement to employment advice, and drawing a clearer distinction between employment support and welfare benefit administration.
But will it work? It is hard to disagree with the recommendations – the rationale is sound and well argued. It is based on historical experience, international comparison, economic analysis and service evaluation. If a reimagined jobs and career service was provided along the lines described by the commission, then its success will probably depend on sticking closely to this vision.
To make it happen, there are three inter-related problems to overcome. The first is financial pressures on the UK government, which limit its ability to invest.
Second, if service users are seen as a reserve pool of labour that the government can activate in pursuit of economic growth, this may undermine reform.
Third, career development is a professional service involving person-centred counselling and an educational approach. This requires staff trained to a professional level, with a code of ethics, who put the service user first. Previous experience of integrating career guidance in public employment services in Europe suggests that their professionalism can be undermined by the host agency.
Now, the ball will be in the court of the Department for Work and Pensions, specifically work and pensions secretary Liz Kendall and minister Alison McGovern.
The devolved governments of Wales, Scotland and Northern Ireland may also have a role, as these matters are at least partially in their remit. The report argues for a more complete and consistent devolution of powers for employment support to the UK nations.
Local labour market partnerships in England are also part of this vision. This means bringing the jobs and career service together with local government, skills agencies, employers, trade unions, voluntary and community organisations and health services. Given the enormous geographical variation in labour markets, it makes sense for local areas to develop their own structures for cooperation between services.
The main issue is that employment support policy has tended to see unemployed people as units that could and should be contributing to the economy. This needs to be flipped so that services become about helping people to get the economy to work for them, and to build a decent life with some dignity in the process. Unless this is deep in the DNA of the new service, it won’t be that new after all.
Pete Robertson is the President of the Career Development Institute (CDI). This is the UK professional body for career development practitioners.