Following the introduction of Britain’s first labour exchanges in the early 20th century, debates soon took place that might sound familiar to modern ears. Those tasked with helping unemployed people back to work would do a better job, wrote one Ministry of Labour official in 1929, “If they were told to cease bothering about ‘where you were last Tuesday’ and to devote themselves to finding out what they could do to help the claimant in his quest for work”.
This pithy observation is cited in a report published this week by the Institute for Employment Studies (IES) and the Financial Fairness Trust (FFT), which comes to a similar conclusion. After extensive consultation with business groups, work coaches, jobseekers and policy wonks, the reports’ authors found a consensus that if modern jobcentres are to be fit for purpose, an emphasis on “empowering people rather than monitoring them; enabling rather than threatening them” is required.
This may not come as a revelation to the former work and pensions secretary Thérèse Coffey. In 2020, Ms Coffey blocked publication of a government report which found that financial sanctions – often imposed for minor breaches of benefit rules – actually hindered claimants’ prospects of leaving the universal credit system. Dire poverty, it turns out, debilitates rather more than it incentivises. More broadly, in a report delivered to the Labour party earlier this year, David Blunkett criticised the self-defeating requirement for jobseekers to spend up to 35 hours a week sending out often futile applications, rather than accessing training and learning new skills.
The assumptions underpinning this approach found notorious expression in George Osborne’s 2013 image of a morning “shift worker … who looks up at the closed blinds of their next-door neighbour sleeping off a life on benefits”. As the IES/FFT report lays bare, a strategy based on bullying the presumed workshy into some kind of employment has been cruel, misconceived and too narrow.
A target-based “any job” philosophy has pushed people into often inappropriate work, fuelling high turnover and alienating employers. The role of Jobcentre Plus providers in policing the benefits system has eroded trust between work coaches and service users, discouraging participation. State-funded assistance in finding work is too focused on unemployed people claiming benefits – a small proportion of the number of people out of work.
The result is that the UK is underperforming badly in this area. The report cites Organisation for Economic Co-operation and Development data indicating that less than one in five UK jobseekers use the public employment service. That compares with more than 70% in France and Germany.
The Labour party has suggested it will radically overhaul jobseeker support, and make it easier to take up training and study courses while on benefits. A new perspective is urgently needed, including a sharper focus on eliminating barriers to meaningful work for disabled people and disadvantaged groups.
From AI to the green transition and the demographic impact of an ageing population, Britain’s labour market faces enormous challenges. Employment rates in Britain have still not recovered to pre-pandemic levels. To maximise the potential for people to find rewarding employment and at the same time boost economic growth, there must be a radical change in how we treat and assist those without work. The man from the Ministry of Labour was right.
