You won’t address economic inactivity if you misdiagnose the problem
Jeremy Hunt says he wants to tackle economic inactivity. The question is: how does he plan to do it?
Late last month he gave a speech on the future of the British economy, noting that 6.6 million UK adults are economically inactive.
“Of that 6.6 million people, around 1.4 million people want to work. But a further five million do not.
“It is time for a fundamental programme of reforms to support people with long-term conditions or mental illness to overcome the barriers and prejudices that prevent them working.
“We will never harness the full potential of our country unless we unlock it for each and every one of our citizens.”
For any specifics on how he plans to “harness” the economically inactive, we can look back to his Autumn Statement where he said the Department for Work and Pensions (DWP) “has a critical role in supporting people into work”, adding:
“I am proud to live in a country with one of the most comprehensive safety nets anywhere in the world but also concerned that we have seen a sharp increase in economically inactive working age adults of 630,000 since the start of the pandemic…
“I am also committed to helping people already in-work to raise their incomes, progress in work, and become financially independent.
“That is why we will ask over 600,000 more people on Universal Credit to meet with a work coach so that they can get the support they need to increase their hours or earnings.”
Is that what economic inactivity is? Work issues, centred on individuals? If that’s the only lens through which the Chancellor sees this, he won’t get very far.
Economic inactivity can be down to many things. Some people might benefit hugely from a work coach, from developing some basic skills (and some confidence) that would allow them to overcome any challenges they face and find a job. But that’s not the whole story.
Some people are unable to work and are unlikely to be able to, no matter what – including as a result of long-term illness or debilitating mental health problems. Some people (including many in Northern Ireland) can no longer work because they are carers for loved ones. A lot of people want to work and, with some reasonable adjustments from employers, would be able to do so - but don’t get the support they need to get into the labour market.
A work coach will be no use for any of those groups.
There are many community and voluntary organisations who do great work in helping people into work. Examples in Northern Ireland include Disability Action NI and Action Mental Health (although there are many more).
These organisations often also work with employers, to help them make adjustments that allow people with disabilities (half of all economically inactive people in NI have a disability) or other extra considerations to be a valued member of their workforce.
That is a crucial part of helping many economically inactive people find work.
Northern Ireland has, in general, much higher rates of economic inactivity than the rest of the UK. Finding a good way to help people who are economically inactive and who would like to work and who are capable of thriving in employment, with the right supports, could be transformative here. On the other hand, failing to address this issue correctly is a bigger problem for NI than it is for England, Scotland or Wales.
Sometimes the lack of support predates the jobs market. Here in Northern Ireland, both children who live with sight loss and those who live with hearing loss are poorly served by the education system.
That can affect their employment prospects, by affecting their ability to work towards school qualifications, while after those children leave school and become adults they can encounter the same absence of support in the world of work.
This is a problem that goes beyond disability. There are plenty of people who could get into work, with a little support, only to find that this support does not exist.
To help people into work, employers themselves need support. Good guidance, financial and structural help to make reasonable adjustments, and access to collaboration with other businesses and support agencies.
All of this could create and maintain a system of best practice to help employers and, accordingly, help those who are economically inactive but who are willing and able to work to do just that.
Doing this better requires more from government – either through direct provision, or via increased support for third sector organisations already doing this work. Which leads us to another issue.
European Social Fund
Back in 2019 – after Brexit had been decided but before it had happened – Scope spoke with Start360 about their transformative work in employability, and also about how this aspect of their work relies heavily on money from the European Social Fund (ESF).
Start360 said that it was essential that the UK Shared Prosperity Fund (UKSPF) – Westminster’s theoretical replacement for certain European funding including the ESF – needed to match ESF’s scale.
Well, it hasn’t. It’s fallen far short, with campaigners warning a pot that used to be worth £42m per year in NI is now worth that much over two years.
A tranche of funding opened for application in December, and closed a couple of weeks ago. Hopefully that money will be used well, even if it isn’t enough.
Here in Northern Ireland, the Department for Communities is working on a new series of Social Inclusion Strategies that will involve both a Disability Strategy and general efforts to support more people into work.
This work began in 2020 and is ongoing (insofar that it can continue to go in the absence of a minister). Crucially, this involves a new Trust Inclusion scheme that will “direct support and guidance to those employing people with disabilities”.
A survey was circulated among employers last September, noting that: “Trust Inclusion will encourage and support employers of all sizes, industry and experience to be more confident and effective in attracting, retaining, and developing people with disabilities within their organisations.”
This scheme sounds good, but whether it can get off the ground depends on a lot of factors. Not just money, but the functional existence of Stormont as well.
At a time when greater government help is required, we seem unlikely to get it. The Northern Ireland Assembly is in a state of collapse. Westminster has failed to live up to its pre-Brexit promises.
The odds of a well-rounded suite of policies that could actually address the many reasons behind economic inactivity and improve people’s lives in the process (as well as helping the economy) look low.
Maybe the Chancellor could step in to do something about it.
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