Government's full employment goal rests on greater city powers

Date: 25/06/2008

The Government will struggle to meet its aim of an 80% national employment rate - unless it grants cities greater freedom to get the workless¹into jobs, according to a new report from the Centre for Cities and the Centre for Economic & Social Inclusion.

The report, has found that whilst England's cities² contain 59% of the country's population, they are home to 68% of those claiming benefits - and 64% of the workless.

Cities like Liverpool show the scale of the challenge:

• Liverpool has an employment rate of just 65%, and would need to shift 15% of its working-age population into work in order to meet the Government's 80% employment goal locally.
• Of the 35% of Liverpool's working age population not in employment, 9% are students, some carers and the early retired - but over a quarter of its working age population is on benefits. This is almost double the English average.

Worklessness is not just a problem for Britain's largest cities.  Hull, Sunderland and Blackburn also make the top five for cities with the highest proportion of their working age population on benefits - in 2^nd, 3^rd and 4^th place.

 
The Ten Cities with the Highest Benefit Claimants³

The report is recommending three steps to help cities tackle worklessness:

First, the Government should extend its programme of City Strategies, which bring together the key players - councils, employers, and agencies (such as Job Centre Plus) - to develop a single plan for boosting participation in the local labour market.  City Strategies should be extended to all urban areas with high levels of worklessness.⁴   This could help employment schemes to reach 58% of those on benefits - almost double the present 34%

Second, city-regions need more powers so they can plan and deliver skills and employment programmes that work for their local economies.  One way would be to set up statutory Employment and Skills Boards - like in London - that build on relationships forged with the employer community.  

Third, the Government could pilot a radical new approach - devolving employment and skills funding to one or more large city-regions like Birmingham or Liverpool.  Benefits would still be set nationally but, like in the Netherlands, cities could be given a clear incentive to reduce worklessness - namely the ability to keep and reinvest any benefits savings they make by getting people back into work.

Adam Marshall, Head of Policy at the Centre for Cities, said:

"Worklessness prevents many of Britain's cities and towns from achieving their economic potential.  Over the past decade, the Government has taken a centralised, national approach to getting people into jobs - reaching out to individuals from Whitehall-based agencies.

"But most of those still left outside the labour market live in our cities and towns.  If our cities are to compete in the global economy, they need localised employment policies.  Devolving power to cities and towns would help get people back to work - and boost local economies."

Sir Simon Milton, chairman of the LGA, said:

"Britain's ability to compete in the global economy depends on the skills and employment of our people. Those who are not in work and employers currently have to navigate two separate systems dealing with employment and skills. These often contradict each other, and are not able to factor in the way local labour markets work.

The Centre for Cities report confirms the findings of the LGA's own work and makes a convincing case that decisions about employment and skills must be made locally, in ways which bring employers and the public sector together to solve local problems."

Chris Murray, Director of the Core Cities Group said:

"We welcome the timely release of this report. Dealing with the issue of worklessness and skills is an essential linking theme between being able to increase local productivity and economic output on the one hand, and translating this into dealing with deprivation and increasing inclusion on the other.

Worklessness does not respect administrative boundaries, nor is it a single issue that can be tackled separately from others like housing, transport and economic development. We have been working with government and its agencies to tackle this, but would welcome greater local flexibility to do so, particularly at the city-region spatial level in a way that integrates more fully with other local and regional strategies."

For more information please contact:

Rosamund Taylor, Centre for Cities
020 7803 4316 r.taylor@centreforcities.org
Out of hours: 07876 175 426

Notes to editors

Worklessness: A City Approach by Dave Simmonds and Paul Bivand is available at http://www.centreforcities.org/worklessness. Dave Simmonds is Chief Executive, and Paul Bivand is Head of Analysis and Statistics, at the Centre for Economic and Social Inclusion (www.cesi.org.uk).  This independent report was financially supported by Asda.  This research will be launched at the UK Welfare to Work Convention in Birmingham on the 25 June 2008.

About the Centre for Economic & Social Inclusion

Inclusion is an independent non-profit organisation dedicated to tackling disadvantage and promoting social justice. Inclusion provides research and policy, tailored consultancy and training, running a wide range of conferences and events. Inclusion works with the Government, the public sector, interest groups and business to develop policy and strategy, and to implement ideas. See www.cesi.org.uk

Tackling Worklessness: ASDA

ASDA operates over 350 retail outlets and employs over 160,000 colleagues across the UK. The majority of its stores are located in town centres, district centres or at the edge of centres. The retailer's ongoing development programme is helping to revitalise cities and towns throughout the UK.

ASDA is already engaged in tackling worklessness throughout the UK. The company was one of the first to sign up to Local Employment Partnerships, where store managers work with local Jobcentre Plus on initiative to encourage the long-term unemployed into work. The first such scheme was in Breck Road in Liverpool. When the store opened in Nov 2005, nearly 3,000 people had applied for 277 new jobs at the store. 28% of these applicants were long-term unemployed, on incapacity or disability benefit.

More than 75% of those 277 jobs went to people who had recently been unemployed. 60% of those were long-term unemployed, on incapacity or disability benefit. ASDA has now taken this approach to its new stores throughout the country.

The London Skills and Employment Board

The London Skills and Employment Board, chaired by the Mayor of London brings together employers with the Further Education (FE) sector, the Learning and Skills Council, the London Development Agency, Job Centre Plus and other relevant agencies to deliver a long-term strategy for adult skills and employment in London.

Over the life of its forthcoming Strategy, the Board wants to see a substantial increase in the number of Londoners in sustainable work (working towards an employment target of 72% by 2013), and to raise the skills levels of Londoners so they have the necessary skills to compete in London's highly competitive labour market.

The London Skills and Employment Board's strategy is due to be published in July.  More information is available at www.london.gov.uk/lseb/. 

1. Worklessness includes all those without a job either actively or not actively seeking work.  The 80% employment rate goal recognises that not all the working-age population will enter the labour market.

2. Where cities are defined as Primary Urban Areas, see ‘State of the Cities', DCLG, 2006

3. Centre for Cities Data deduced from April-May-June 2007 quarter DWP Benefit Claimants, Annual Population Survey. Taken from NOMIS Local Authority data and calculated for PUA.

4. Right now, fifteen urban areas have ‘City Strategies' - to convene this meeting of minds.