30th October 2024
The new Government has put economic growth at the top of its agenda. After almost two decades of a sluggish economy, the Prime Minister has made it his number one priority. However, he inherits all the same problems and chief among them is the alarming number and rise of the economically inactive – those not in work and not looking for work.
There are 9.4 million people in this category – that is up by 1 million since the eve of the pandemic according to the inactivity reason table or up by over 800 thousand on summary table of official statistics; and of them, 2.8 million are long-term sick – an extra 700 thousand since before Covid. A continuation of this would cost the Exchequer billions more in welfare payments by the end of the Parliament, and billions more in lost revenue. Any government serious about growth must have a plan for this cohort – this paper provides one.
The solution
The good news is that within this group the Centre for Social Justice has identified 700 thousand people who would want to work and could work, given the right help – the question is how we get that help to the right people. Early Government announcements around devolving employment support are absolutely the right direction of travel and this paper makes the case for almost £6 billion to be devolved to the lowest level possible, so that locally embedded communities can commission the right support for the right people, from the right organisations. It will mean a move away from one size fits all Whitehall prescriptions and entrusting the people closest to the problems to come up with the right responses.
There is still an important role for central Government and individual job coaches in the administration of Universal Credit (UC) – from generosity to conditionality. But our research has told us that the same job coaches administering the important stick of a conditional welfare system are not always best placed to be the people who provide the carrot – the employment support. By devolving this function, you enable better relationships between jobseekers and supporters and partnership with community actors, which in turn leads to better outcomes.
It will require an appetite for risk from Westminster officials to push decision-making and cash down the line but it would not require much, if any, extra spend overall and the good news is that this approach has successful national and international precedents.
