The UK strategy for labour market inclusion

Paul Convery

Director

Unemployment Unit & Youthaid, London

New Deal Scottish Advisory Task Force, Airth Castle, September 14th 1999

Welfare to work: a coherent political & economic strategy

• not just a "pledge card" commitment or more unemployment schemes
• work is the primary mechanism for combatting poverty
• a defining aspect of the New Labour "third way" project
• an integrated Government approach

Labour market and social strategy

• Reforms to taxation and benefits
• Investment in skills
• Security in the workforce
• Employer & community commitment
• Family & personal support
• Regional economic development
• Programmes and services for the disadvantaged
• Strategy assumes economic growth

Labour market conditions

Labour market conditions

New Deal in Scotland

Some emerging challenges

• "Jobs first": over-strong emphasis on job submission - 42% of job entrants enter work that is not sustained for more than 13 weeks (incl 19% amongst employer option)
• tension: particpant choice / ES decision
• The "Disappeared": in Scotland just 15% of Gateway leavers are unaccounted for (UK is 35%). Main Scottish DUs vary from 11% to 18%.
• Slow progress from the Gateway: almost 50% "overstaying" (January 1999 cohort)

Some emerging challenges

• ES under-estimating lack of job-readiness
• sanctions - numbers rising from 650 in Q3, 1998 to 4,600 in Q1, 1999
• tougher sanctions still - do they achieve changed behaviour?
• pecking order of options: a real job with a real employer payng a real wage?
• re-vamp and rationalise the chaotic mixture of study and training
• self employment

Employers

• Employer option is "underachieving"
• Slow entry rate risks alienating employers
• Do employers want a subsidy anyway?
• "Unsuitability" - recruits lacking preparedness expected by employers.
• Some firms offering low level jobs which participants seem reluctant to take.
• Are all employers really geared up? Corporate commitment of large companies or public authorities may not be matched by their capacity to recruit at the operational level.

Tackling disadvantage

• better identification (client profiling), improved case management and counselling
• continued support on options (incl employers)
• cross agency integration - better information and support to front-line staff
• outreach and support, particularly for those with chaotic lifestyles - community based approaches
• enriching the offers - more option tasters, intensive activity and services
• integration and rubbing out the rules