Article first published on Left Foot Forward on 13 August 2015.

The jobs figures published this week expose government labour market complacency. Unemployment is up, as it was last month. Youth unemployment – almost three times higher than overall unemployment – is up. Unemployment among older workers is up, and the number claiming incapacity benefits is up.

And the number of vacancies is up as well. Employers all over the country are struggling to find skills they desperately need. Last month, the CBI was right to highlight a ‘skills emergency’. There is an urgent requirement to boost training and apprenticeships, so that people are equipped with skills to secure the jobs our recovering economy is creating.  

We welcome commitment to three million apprenticeships. Too often, however, the quality has proved to be poor – and the number of young people starting apprenticeships actually went down last year.

We are now one year on from the government’s decision to scrap the Youth Contract Wage Incentive Scheme. It was a dismal flop, and missed its targets by a country mile. Half-hearted measures abandoned mid-way simply aren’t good enough. No attempt has been made to introduce something more effective, and so youth unemployment has remained stubbornly high.  

The government’s own Commission on Employment and Skills (p.6) has highlighted how damaging it is that UK levels of youth unemployment are comparable with levels in the Eurozone, and that 40 per cent of unemployed people in Britain are under 25.

Usually, when unemployment falls, the number claiming incapacity benefits falls too. Not this time. New figures in this month’s labour market statistics show the number in February 2015 was up 73,900 on the previous year (3 per cent), a period in which unemployment fell by almost half a million.

The government unwisely undertook a rushed re-assessment of people claiming the old Incapacity Benefit, without ensuring sufficient capacity in the assessment system. It went badly wrong. Many people were refused benefit and then won it back on appeal. There have been large backlogs and delays. Atos eventually threw in the towel and walked away from their assessment contract.

The Work Programme has performed particularly badly for this group. Fewer than 10 per cent of claimants of Employment and Support Allowance, after two years on the Work Programme, had secured lasting employment. DWP had initially said 15 per cent of ESA claimants would get sustained job outcomes within two years if there was no programme at all.

Spending on ESA this year is forecast to be £14.7 billion, £4.5 billion more than was projected in 2011. In 2011 the government said spending would go down from £13.2 bn in 2010-11 to £10.2 bn in 2015-16. In fact it has gone up. It has been a major policy failure. 

Clutching at straws, ministers blamed the unemployment rise this month on uncertainty before the General Election. But the figures cover April to June, mostly after the election!  Far fetched excuses will not do. We need commitment, not complacency.

Posted
AuthorStephen Timms