Labour Pledges Major Reform of Job Support To Boost Employment and Grow the Economy

• Ashworth commits next Labour government to ‘full and fulfilling employment’ with goal of the highest employment in the G7.

Speaking at Labour Party Conference today (Monday 26 September), Jonathan Ashworth, Labour’s Shadow Work and Pensions Secretary will outline Labour’s new job help promise of full and fulfilling employment -  committing Labour to reform support for everyone out of work including the over 50s and those with health problems but who want to work.

Ashworth is expected to say that despite vacancies of 1.3 million in the labour market, there are record numbers of people on out of work benefits due to ill health, and hundreds of thousands of people have left the workforce altogether.  

He will warn that Tory employment programme aren’t fit for purpose, have underspent by £2 billion and have an abysmal record at helping fill vacancies.

He will instead commit Labour to a goal of the highest employment in the G7 with reformed employment services are key part of hitting that goal.

He will say reformed employment services are urgent prerequisite of sustainable growth to prepare our economy for the big challenges of the future.

Under Labour’s plans for a major transformation of employment services, a Labour government will:

• Significantly reform employment services to reach to groups who need support including the over 50s, and the long-term sick. 

• Reform job centres and support GPs, housing associations and community groups to easily direct people to employment support.

• Offer targeted and specialist help to those with long-term ill health and the over 50s.

• Create freedom for local partnerships to decide how best to design services, moving away from rigid, national contracting and ensure resources to help people find work are closer to local communities.

Ashworth will highlight examples of effective employment support programmes – such as the “Working Well” programme in Greater Manchester, championed by Andy Burnham – as an example of how local areas can draw on their own labour market knowledge and expertise to design support that works for their communities.

He will say these types of reforms could be implemented now if the Tories reallocated the current £2 billion underspend in their underperforming employment programmes.

Latest labour market statistics show that while vacancies remain high, the number of people who are inactive and out of work is well above pre-pandemic levels, driven partly by those out of work due to long term sickness and the over 50s. Labour’s employment support provision will specifically target the over 50s and those out of work for long-term ill health – over half a million (578,000) people who are long term sick say they would like a job, and nearly 760,000 people aged between 50 and 64 years are either actively seeking work, or are inactive but are willing or would like to work. Economic inactivity due to long-term ill health is rising at its fastest ever rate and has reached the highest level ever.

Speaking this morning, Shadow Secretary of State for Work and Pensions Jonathan Ashworth is expected to say:

“Everyone deserves the opportunity to find well paid work.

“Yet at a time when we have record vacancies in our economy, the Tories have not only underspent on their underperforming programmes by £2 billion, they have written off a generation. That money could be invested right how to help people back to work

“It’s a monumental waste of talent not to mention a cost to society. Tio help people make the most of their talents and abilities, boost our economy and prepare for the jobs of the future, Labour will reform Jobcentres and employment services to help more people into jobs and spread opportunity as we target our long term ambition of the highest employment in the G7.

“Our reforms will ensure specialist, active help with training, coaching and work support for all those who want to return to work.

“Instead of big national contracting with outsourcing firms that don’t deliver the extra jobs promised, Labour’s reformed employment service will be delivered on the ground in partnership with community groups, local authorities and services like the NHS.”

Ends

Notes to editors:

• Labour would expand employment support programmes offering tailored, locally designed support, to all who need it, but focused on the over 50s and those out of work due to ill health.
• Labour’s employment support provision will specifically target the over 50s and those out of work for long-term ill health – over half a million (578,000) people who are long term sick say they would like a job, and nearly 760,000 people aged between 50 and 64 years are either actively seeking work, or are inactive but are willing or would like to work. Source: ONS
• The Leaning and Work Institute estimate that increasing employment to the highest in the G7 over the next decade should boost our economy by £23 billion, improve the public finances by £8 billion and raise household finances by an average of £830 a year. 

Labour market failures background

• There are 9.01 million working-age people economically inactive, more than 640,000 more than before the pandemic. Source: ONS
• Economic inactivity is rising most strongly for those over 50.
• There are 1.27 million job vacancies in the UK, this is equivalent to less than one vacancy for every unemployed person. Source: ONS
• The cost to the economy of not taking action to address the vacancy crisis is estimated to to £39 billion. Source: REC
• Vacancies in key public sector areas and health and care continue to rise. Source: ONS
• Real pay has fallen for the ninth month in a row. Source: ONS
• 5.3 million are now on out-of-work benefits – up from 4.3 pre-pandemic with 1.8 million due to disability and ill health (Source: DWP Stat Xplore)
• 578,000 people who are out of work with long term ill-health say they would like a job.

Kickstart and restart expected underspend 

Based on an average cost of £2000 per person, £2 billion would provide employment support to an additional 1 million people. 

Institute of Employment Studies analysis estimates that the Department for Work and Pensions’ Employment Support Schemes will underspend by approximately £2 billion this year. This comprises over 1.7bn underspend on Kickstart and Restart employment schemes, reduced spend on Work Coaches and the end of other pandemic employment schemes such as Job Entry Targeted Support. 

The National Audit Office expects that Kickstart is expected to underspend by £650 million. Based on current performance of Restart which has only reached 60 per cent of target participants, the IES estimate that this is likely to underspend by £1 billion. 

Similar research from the Learning and Work Institute projects up to a £2bn underspend on employment programmes comprising over £665 million on kickstart, up to 1.1 million underspend on Restart and £65 million on traineeships.