Thursday 16 February 2017 11:27 am

Record-breaking employment numbers threatened by government short-termism

The Office for National Statistics published the latest labour market statistics yesterday, once again confirming that it has been a record-breaking year for employment.

With 31.84m people in work, the unemployment rate at the lowest it has been for over a decade (4.8 per cent), and, with a record 70 per cent of women in work, there is much for the government to celebrate.

In part, these latest figures are a testament to the scale and efforts of employment support providers – who provide services to help jobseekers into work – at the front line, helping to change lives, communities and businesses across the UK.

Between specialist programmes for jobseekers, such as Work Programme and Work Choice, alongside mainstream Jobcentre Plus services, the system has worked together to create this success. Since its inception, the Work Programme alone has helped over 813,000 jobseekers into work. However, and it is a big however, short-termism by the government is in danger of undermining much of this good work in the years ahead.

Both the Work Programme and Work Choice are closing their doors to referrals this year, and the government’s successor initiative, the Work and Health Programme, will be considerably smaller. Overall, investment in nationally contracted specialist employment support is set to fall by 80 per cent this year. With a potentially more challenging labour market ahead, reducing the investment in specialist services makes little sense for employers, jobseekers and the Treasury.

Add to this the government’s pledge to halve the disability employment gap, which is a laudable commitment, and there will need to be over 1.2m more people with disabilities to enter work by 2020. Yet, ERSA research commissioned by WPI Economics shows that, while there was investment for 300,000 disabled people to access contracted support between 2012-2015, this will actually fall – to just 160,000 disabled people from 2017 to 2020.

This reduction in specialist support has an economic cost too. Doubling the size of the planned Work and Health Programme would see Treasury savings of £280m, which would help to support the government’s aim and also show that the government is fixing the employment roof while the sun is shining.

Although employment figures remain buoyant, moving away from the very labour activation policies that have helped to produce these results is a mistake. It threatens the employment gains of the last couple of years and will undermine the government’s ability to respond in the event of any economic downturn in the medium to longer term. The government must think again about its short term decisions – once capacity is lost from the employment support sector, it will be hard to regain.