A contradiction continues to run through the Government’s strategy for skills and employment as two critical developments, and two main Government Departments, potentially clash.
In one corner, the Department for Work and Pensions is doubling its efforts to get non-employed people into work as quickly as it can. The DWP’s new agency, Jobcentre Plus, started its first phase roll-out in late October in 49 areas and, by April 2002, will have replaced both the Employment Service and Benefits Agency across 90 districts covering England, Wales and Scotland.
Its new clients will include lone parents, older workers and disabled people - about 40% of whom definitely want to work. In the past they have often been condemned to a life on benefits. With nearly four million clients, the new agency will have an unequivocal emphasis on rapid job entry - even for some who are the hardest to help.
Its core elements have a strong "work first" approach:
Although this welfare strategy says that the Government will ‘continue to invest in the productivity of our current and future workforce’ in practice this simply means a commitment to helping the seven million adults who lack basic literacy and numeracy skills. Because over half of these could be Jobcentre Plus clients or dependants, this is no surprise. But Jobcentre Plus will deliver very little of the longer term skill services that will ultimately ensure that many highly disadvantaged individuals get sustained employment.
Offering only ‘work-first’ and basic skills will not overcome the profound disadvantages in the labour market faced by those who may possess, or acquire basic skills, but who still have skill levels lower than those required by employers.
In many ways, Jobcentre Plus’ aggressive ‘work-first’ approach is understandable. Many of the agency’s new clients need to be brought closer to the labour market - by helping address profound barriers that are far more serious priorities than a lack of work specific skills. Nonetheless - to gain and retain jobs - they will eventually need to acquire skills that are higher than basic literacy and numeracy. The Jobcentre Plus vision does not yet go this far.
The new agency will inherit a legacy of the Employment Service in which many former ES staff will see early job entry as the first response for most of their clients. For a decade and a half, the mantra in some Government circles has remained ‘any job is better than no job’. And too many former ES employees will have been brought up in a climate of scepticism, partly justified, about ‘training for work’ style provision.
In another corner of the Government jungle, the Department for Education and Skills, bolstered by the recent workforce development report conducted by the Cabinet Office, is taking an approach which does not sit easily with ‘work-first’. The DfES is promoting a vision of the UK where growth in skills has a significant impact on social exclusion and ‘delivers sustainable economic success for all’. This branch of Government is committed to a ‘demand-led’ approach that makes skills provision responsive to demand from business and the needs of potential individuals, instead of replicating the historic patterns of institutional provision, or guesswork by administrators.
Reforming the supply side is an essential first step. But understanding the strong link between skills, employment tenure and wage levels is the next stage. Employment rates for skilled people are 80% compared with 55% for the unskilled. On average, wage rates for those possessing VQ level 3 skills are some 38% higher than those who are unskilled - and typically a worker needs to be skilled to at least this level to get above the threshold of average earnings.
The Government has decided to pilot a range of measures designed to see how former social security recipients can be helped to retain jobs and to progress. These pilots seem likely to show that training, after starting work, boosts retention and promotion. And it could well show that better work-skills preparation is a strong factor influencing job entry in the first place.
Within the Government, these two approaches, work-first and skills development, seem to be in competition. They should not be. Government needs to realise that the best way to get people into sustained employment is to blend both approaches. It should mix work-first activation measures with programmes that improve the skills of non-employed people.