'Worklessness' – or long-term absence from employment for large numbers of people – is a relatively new phrase and historically a relatively new concept. It underpins much of the deprivation which exists in many of our communities. Its causes and context are different from place to place and often person to person. Solutions to the problem therefore require both an understanding of place and those affected by it.
For example, in parts of London and the south east of England (until recently at least) jobs were in abundance but large numbers of people were economically inactive. The reasons for this are varied – ill-health, low skills, language, ethnicity and lack of mobility are all contributing factors. Tackling the problem requires a holistic and personal approach by a range of service providers, often even before employment can be considered.
In other places, particularly the former industrial towns and cities of the Midlands and the north of England, the challenge is even greater. Not only do workless people face the problems I have just described, they face a far more competitive labour market in that job vacancies are at much lower levels. For example, in Working Neighbourhood Areas the unemployed to job vacancy rate is 9 to 1, compared to 5 to 1 elsewhere. This has led to worklessness becoming a way of life for both people and places and we are beginning to see some communities where second and third generations have not experienced employment.
This varied picture tells us three things:
* First, one-size-fits-all solutions driven from the centre of government have a limited impact – existing number of workless people have remained stubbornly high for some time.
* Second, solutions require a multi-agency/partnership approach.
* Third, solutions need to be localised, even personalised.
Traditional economic theories have been found wanting in this environment, particularly around the idea of a mobile labour force being prepared or able to move for work.
However, a new understanding is beginning to be developed based on an improved knowledge of places and the people who inhabit them. We need to build on this work and create a new policy framework around it. One which is transparent and accountable for government to ensure that taxpayers' money is used effectively, but also one which is devolved locally so that decisions and programmes reflect local context and personal needs more effectively.
A new framework
To begin with, we all need to work smarter. The current framework for helping both employers and the unemployed is too complex and lacks the data and information to be fully effective. Local councils should be conducting worklessness assignments as part of their new economic duty. Understanding who can, can't or won't work is essential to targeting the right actions and resources to the right people. It also means having a better analysis of local labour markets and how to help people into them. Such demand-and supply-side analyses also require good information-gathering and sharing cross agency – something absent historically in the system.
Building on this first step, local strategic partnerships and their councils should work closely with training providers, government and Job Centre Plus to produce work and skills plans. These would identify the resources, services and actions to be taken to tackle the problem and the outcomes to be achieved. These plans also should include funding steams, such as the Working Neighbourhoods Fund, mainstream council and partner funds as well as those of government itself. Wrap-around services, such as health, benefits, and community advice, can be as important as training and employment services in bringing people back towards employment. Such an approach would allow better performance management of the system and scrutiny and encourage co-commissioning of services between partners locally.
Finally, central government should allow pooling of resources locally by partners. Joint commissioning and locally-set targets and outcomes would allow for a more personalised approach and encourage local provision as well as regional and national action. However, the capacity to take such a step needs to be developed in many places and will take time.
Of course the framework that I have described may be better delivered cross council or the sub/city region. Labour markets are not restricted by political boundaries and multi-area agreements may be more appropriate.
Shaping services – procuring solutions
In describing this new devolved framework I have alluded to the fact that not only should services be geared towards individual communities but also towards individuals themselves, and in doing so the onus is for those services to be used to move towards or achieve employment for the recipients.
If we are to tackle the culture of worklessness in our most deprived communities, we need to replace it with a culture of work. That means that all the services we deploy need to have that end in mind and that may mean reshaping their delivery and the outcomes from them. That also means reshaping the benefits system to that end, we have too many places where work does not have the value it should. There is a job for central government and local government to encourage society to value all forms of work, not just that at the higher end of the market.
On a more practical level there are things which local government and the public sector can do more of without any major policy changes. Historically, many of the areas which are now suffering from long-term unemployment had large public sector industries such as coal and steel which not only employed people but trained them for the wider economy and they used their capacity to support local businesses.
While I would not advocate any unaffordable or permanent expansion of the public sector workforce, local councils and their partners can do more. There is capacity and opportunity to give training/apprenticeships and work experience to local people – particularly where the private sector is weak or small. There is also the ability to review the procurement of goods and services to look at supporting local businesses and placing local people into work with contractors. Local government procures over £20 billion in goods and services every year. European procurement rules are often cited as a block to such moves but in places like Liverpool, Wakefield and South Tyneside ways through this have been found, much to the benefit of those localities.
Re-thinking regeneration
Thus far I have focused on labour supply and how we can deploy resources to bring it more effectively into work. Sadly, despite working better and smarter, there are places which still have insufficient job opportunities to meet local need. This was the case after 10 years of sustained economic growth. The position of such economies has become even more difficult as a result of the recession. So what can we do here?
A recent report from the Policy Exchange Group identified this as a particular problem for former industrial towns in the north of England. Its preferred solution was for the unemployed in the north to move south to access more available job opportunities there. This suggestion failed to recognise the challenges faced by the long-term unemployed and the hindrances to their mobility, let alone the potential impact on an already overheated southern economy. Faced with underperforming economies and a relatively immobile labour force what are such places to do?
The government's new duty on local authorities to undertake economic assessments is a start. Just as we need to understand worklessness, we need to understand places as local economies, their real growth potential and their role in the wider sub-regional and regional worlds. This will require honesty. Experience in many places suggests that sustainable community strategies and economic development plans looked the same and failed to deliver. It is time for many places to review their strategies and look to what may be possible in the post recession world.
That is not to quell ambition, but to ensure it has real foundations. Investment in deprived areas in the late 1980s was replaced by investment in opportunity in the 1990s, with strategies to connect the hard to reach to areas of growth. Neither of these had much effect on the numbers of long-term unemployed.
Both approaches also suffered from short-termism – something which has undermined employment and skills support as well – this needs to be rectified. Longer term support for under achieving economies is essential if we are to see growth restored. However, spending on overambitious capital or inward investment projects may not be the way forward.
More attention needs to be given to people-focused interventions, creating home-grown enterprise and increasing mobility. Some economies may have to accept that they cannot be what they once were. Regional Development Agencies (RDAs) have a crucial role here in creating an intelligence-based approach, as does local political leadership in identifying new and real futures for places and driving them forward. Central government and RDAs need to identify those places which face these problems and work closely with them over the long term. In Yorkshire, the RDA's Renaissance Towns Programme was a good example of both economic challenge and co-operation and something from which others can learn.
Conclusions – mainstream business
We all need to understand that worklessness is not simply an issue for central government. The range of services and interventions needed to place the hardest to reach into work are wide and numerous. This means that tackling worklessness is mainstream business for all partners, but particularly local authorities. In saying that, the implications for the centre of government are to allow devolution, decision-making and delivery to flourish at that local level. But that delivery – the services and activities being provided – has to have at its heart the notion of moving people closer to employment.
Steve Houghton CBE is Leader of Barnsley Metropolitan Borough Council. He has been a Member of the Council for 22 years and Leader for 12 years. He is also Chair of the National Worklessness Review; Chair of the Barnsley Local Strategic Partnership; Chair of SIGOMA; an Audit Commissioner; and a Regional Peer of the IDeA.
