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Britain’s employment agencies will spend less time policing the welfare system and more time helping people find work under government reforms aimed at raising employment rates to the highest level in the G7 nations.
Employment Secretary Alison McGovern told the Financial Times that a white paper due in the autumn will set out “big changes” to a welfare system that has “thrown too many people off the table”.
“We must first change the culture,” she said, calling for a return to the founding principles of the welfare state.
“[William] “Mr Beveridge knew that for social security to work, you needed a well-functioning health system and an approach to full employment. We have lost that broad view of the economy,” she added, referring to the economist who inspired Labour’s post-war reforms.
Mr McGovern was speaking ahead of the publication of an independent report which sets out proposals to transform the Jobcentre Plus network, a jobseeker and benefits service, into a universal employment support resource open to everyone, including not just benefit recipients but people who are unemployed with health problems.
The report will underpin Labour’s target of raising Britain’s employment rate to 80%, the highest level in more than 160 years and surpassed by only a handful of major economies.
The target is central to the government’s economic strategy, as the UK is the only wealthy country where employment – estimated at 74.5% – has yet to return to pre-pandemic levels, according to official data.
Government statistics also show a rise in the number of people claiming disability benefits because they are unable to work due to illness or disability, although data collection problems make the figures doubtful.
A commission report on the future of employment support said many of the problems were due to “draconian” requirements imposed on people applying for unemployment benefits, including requiring them to spend 35 hours a week looking for work and facing sanctions if they don’t meet the requirements.
The committee is led by the Employment Research Association and its members include recruitment and trade union representatives as well as think tanks and charities.
Tony Wilson, director of the IES, said there was “no evidence” to support the “harmful” 35-hour rule, which forces people to constantly justify their actions, puts a strain on advisers and forces people to claim health-related benefits with fewer requirements.
“People outside the labor force don’t trust employment agencies,” he said, arguing that eliminating requirements for people with health conditions or young children and scaling back requirements for everyone else would free up thousands of advisers to spend their time helping people better find work.
British jobseekers are less likely to use public assistance services to find work than anywhere else in Europe, in part because employment agencies are not open to the public and only cater to benefit recipients.
“This is the most hated public service. It has to change,” Ms McGovern said. She acknowledged that scaling back the sanctions regime and investing in new support services would come at an upfront cost to taxpayers.
The committee estimates that the proposals would cost an extra £150 million a year over the course of the parliament, but the benefits would be much greater if more people sought help and found better jobs.
McGovern argued the investment was justified despite the “abysmal” financial situation: “Look at the cost of what we’re doing now and I can’t believe we can’t do better,” she said.
