Cities can fill the jobs picture
Author: Faiza ShaheenDate: 27/06/2008
Publication: New Start
From health assessments for the two and a half million on incapacity benefits to boot-camps for the youth, there has been a recent explosion of ideas from all political directions on how to get people in to work. Why all this attention when employment rates are at a record high? Because, despite a decade of employment initiatives such as the New Deals, worklessness stubbornly persists in our cities. Almost a quarter of Liverpool's population is on benefits.
Worklessness - that is, all those that without paid employment who are either actively or not actively seeking work - is seen as blight on the economy. When segments of the population do not engage in the workforce it limits the labour pool - leaving employers frustrated, and their business growth in threat. Those unemployed are also likely to have less money, affecting the success of local businesses. It also costs the government billions of pounds a year, money that could be spent elsewhere to increase productivity and wealth of UK PLC. It is no surprise then that its reduction is a priority for both local and national government.
A new paper from Centre for Cities, co-authored with the Centre for Economic and Social Inclusion, points out that current initiatives, that concentrate either on the further personalisation of services or a clampdown on benefits, are only addressing part of the reason why worklessness persists. They ignore the geography of worklessness and the demands of the city region, which is the economic reality of ‘local' labour market.
This problem begs for a different approach: localisation. By localisation, I mean the passing-down of powers and funding to design and implement worklessness initiatives from the national government to city region. In this context, it would mean a movement away from nationally proscribed approaches and the highly centralised DWP funding system, to empowering city-regions to take on the worklessness challenge.
So, why is localisation such a good option? Firstly, worklessness is disproportionately concentrated in our cities. In fact, cities contain 59 percent of the Great Britain's working-age population, but have 68 percent of benefit claimants and 64 percent of the workless. A further breakdown to the 121 urban areas with the highest rates of worklessness reveals that these particular areas contain 42 percent of Great Britain's working-age population, they have 49 percent of the workless and 56 percent of workless benefit claimants.
We also know that some people such as those with a disability and ethnic minorities are more vulnerable to unemployment - and are also highly concentrated in our cities, and in particular in urban areas with high levels of worklessness. This suggests that there are particular urban areas more in need then others - hence the need to localise efforts and concentrate resources where most necessary.
Localisation makes sense because every city is different - the reasons why there are clusters of worklessness in Sunderland are different to London. The legacy of industrial decline is the most obvious culprit for high worklessness in places like Sunderland and Hull, where they have been unable to recover from this major job loss. However, London did not suffer from industrial decline in the same way, and there has been an almost exponential growth in service sector jobs. Here worklessness is more the outcome of a very competitive low-skilled labour market - with statistics suggesting that for every low-skilled job there are three low-skilled workers.
Employers are looking for different skills - and different workers in every city - and the barriers that the workless face can only be fully appreciated and tackled at the city region level.
That's not to say that personalisation - that is, where employment services are tailored to the individual needs - are unneeded - simply they are not enough. For example, it is no good training a workless individual with IT skills when local employers are demanding more Baristas for coffee shops.
It is for this reason that the Centre for Cities report calls for more employer involvement in tackling worklessness so that training can be designed in alignment with job vacancies. One good example of where this is already taking place is the London Skills and Employment Board (LSEB). This board, chaired by the London Mayor, brings together employers with the Further Education (FE) sector, Learning and Skills Council, London Development Authority, Job Centre Plus and other relevant agencies to plan skills provisions to work towards an employment target of 72 percent by 2013. It has already discovered that a NVQ 2 Level qualification does not have the same employment value in London as in other cities, and is planning its work accordingly.
The Department for Work and Pensions' (DWP) City Strategy initiative demonstrates steps towards addressing the short-comings of a blanket national approach. City Strategies aim to bring together different partners in the areas, such as the Local Skills Council, Job Centre Plus and local employers, to plan and deliver initiatives in a less fragmented way. Some, such as those in London and Greater Manchester, stretch beyond one local authority, encouraging local authorities to work closer together to deliver more coherent services. Whilst progress has varied between the different pathfinders, early signs are positive - the conversations have started to facilitate better planned service delivery.
The Centre for Cities report recommends that the City Strategy initiative is extended to cover all urban areas with high levels of worklessness. This would cover 56 percent of all benefit claimants, rather then the current 34 percent and will get our cities engaging in the much needed three-way dialogue between Local Authorities, employers and training providers.
The next step should be to formalise these consortiums. One way would be to up-grade these City Strategies in to a statutory Employment and Skills Boards (ESBs), such as London's Board, building on the relationships forged with the business community. These consortiums could hold responsibility for prioritising skills funding; taking on a Government role by participating in the selection and monitoring of contractors delivering employment services and scrutinising the performance of Jobcentre Plus. The statutory status will provide a duty for the board to work collaboratively with relevant agencies, more pressure to deliver on targets, and points to a long-term commitment so that those involved are more likely to invest time and resources.
The London Skills and Employment Board is just one possible route and the government should allow cities themselves the freedom to decide on the nature and composition of their board. In the Leeds city-region, for instance, an evolving consortium of employers, skills, housing and transport panels are meeting to discuss how to tackle worklessness. They should be encouraged to develop this approach and be given more formalised powers when they are ready.
The final step on the road to localisation would be to have a fully devolved approach. The Centre for Cities would like to see this piloted in cities such as London and Greater Manchester, where they are already demonstrating the ability to work effectively on these issues.
In these cities, benefits would still be set to a national framework, but the city-region itself would administer the allotted DWP funds, oversee the contracting-out of services and would be free to design and implement welfare-to-work programmes, as they see fit.
This would be a big step, and a staging point towards full devolution of these funds might be to simply devolve the funds allotted to dealing with those furthest away from the labour market - such as the long-term unemployed. This pot of money could be given directly to cities - trialling a local approach, and comparing outcomes with national initiatives.
A devolved approach would require an incentive for cities to deliver. Cities could, for example, be able to keep any benefits savings from those that get back in to work, using this money to invest in further training and employment initiatives.
These three steps would give our cities the opportunity and responsibility to tackle worklessness. It would also involve employers more closely in the design and implementation of employment initiatives, and speak to the true geography of the labour market.
Moves to localise and bring employers in to the planning of employment initiativeswould be welcomed by many cities, employers, and is simply the norm in many cities across Europe. The government cannot afford to ignore a vital weapon in the fight against worklessness - The economic future of England's cities depend on it.
A version of this article first appeared in New Start
