The latest Work Programme statistics received relatively little coverage, perhaps understandably given they were published on the day of the Scottish Independence Referendum. But they deserve greater attention, as they show both what is right and what is wrong with the UK labour market.
The good news is that overall performance continues to improve. Analysis by Inclusion shows that the Work Programme is working particularly well for young people and there has been improved performance across the board. And this has been achieved at much lower cost than previous employment programmes.
However, Inclusion also find that performance overall remains at or below the minimum expected. A key reason for this - and a key concern of ours - is the relatively weak performance for Employment and Support Allowance (ESA) claimants and more disadvantaged groups. Many ESA claimants have been out of work for five years or more, may have outdated skills, lack confidence and, in some cases, face discrimination by employers. But the Work Programme wasn't set up to tackle all of these barriers together - it will never be enough on its own.
At the same time, many of those helped into sustained employment will get relatively little support to progress beyond entry level work and build a career - it is perhaps telling that the official Work Programme statistics don't even report the number of people who move into Apprenticeships.
This speaks to a more fundamental fracture in our employment and skills system. People with the greatest need are not getting the greatest support. Support is too often based around Departmental silos rather than people's needs. We've succeeded in reducing the number of people on benefits, but too many people cycle between low pay and no pay and more still become trapped in low paid work.
This costs the taxpayer, individuals and employers.
Joining up employment and skills support is something people have wanted for many years - but it is easier said than done.
So here's three practical suggestions from NIACE's recently published manifesto:
- Passing power from Whitehall to the town hall. Local areas have more chance of joining up support for individuals and employers than central Government. The debate fuelled by the Scottish Referendum gives an opportunity to have a debate about how to do this. For example, in Canada, Labour Market Development Agreements set out what is devolved to each province and a basket of measures of success. Should the UK adopt these for city-regions?
- Empowering individuals. We have called for an Apprentice Charter, setting out rights and responsibilities for Apprentices, and Personal Skills Accounts. Perhaps this principle could be extended to the social security system, giving individuals choice and control over their back-to-work support in the same way - in other words Personal Career Accounts?
- Focus on outcomes. We called for more emphasis on informal learning, as well as qualifications. This could provide stepping stones toward the labour market for those furthest from it. At the same time, we should consider rewarding providers on the quality of work, including earnings levels, rather than just sustained employment.
It's great that Work Programme performance is improving - beyond the statistics, these are people's lives and it's good that there are more people in work as a result. But there are limits to what can be achieved without a more fundamental look at our employment and skills system.
NIACE wants to work with all those committed to a better system to make this a reality - the debate over devolution and forthcoming UK General Election form a moment of time when together we can make this a reality.
Stephen Evans is deputy chief executive of NIACE, which encourages all adults to engage in learning