House of Commons - Education and Employment

Select Committee on Education and Employment Fourth Report

BARRIERS TO EMPLOYMENT

Attitudinal barriers: unemployed people

45. The attitudes of some unemployed men towards certain types of employment add to the perception that jobs gaps exist. We heard that service sector jobs, such as those in retail or in call centres, were not considered "real" employment by older men in declining areas or by their sons.[111] John Watson, co-ordinator of the Glasgow Prototype Employment Zone, stated that there was a lack of knowledge among unemployed people about the skills that employers were looking for in the growth sectors of retail, hospitality and call centres. He thought that people applied for jobs about which they had some knowledge. Because so few had any knowledge of call centre work they did not apply for those jobs.[112] Work trials or tasters can be used to overcome these barriers, and their value was recognised by the Policy Action Team on Jobs.[113] Research on the New Deal for Young People indicated that the use of such initiatives was not widespread.[114] We agree with the Policy Action Team conclusion that job tasters should be used more widely. These may not always lead immediately to an employment outcome, but they will help to supplement the work of Personal Advisers in providing people with a knowledge of new forms of employment.

46. Communication skills are increasingly a core requirement for jobs, and this should be reflected in active labour market initiatives. The 1999 Budget made available funds for 12 Intensive Gateway pilots which began in August 1999. These provided more intensive help with job search and programmes to help with "soft skills" such as presentation and communication skills. The Government plans to begin nationwide expansion of the Intensive Gateway approach from spring 2000.[115] The Government has also introduced compulsory courses for new New Deal participants which will teach job seekers how to present themselves to prospective employers.[116] These initiatives have a role to play in improving the employment prospects of job seekers, and for some they will be sufficient to make them attractive to employers. For others, overcoming the deficit in communication skills will need a more concerted effort. The attainment of communication skills should be a theme which runs right through the New Deal. We recommend that New Deal participants should be given the opportunity to develop these skills in both the Gateway and as an intrinsic part of their work-based and training options.

Attitudinal barriers: employers

47. The attitudes of employers towards certain groups can also act as a barrier to employment for many unemployed people. In paragraph 42 we discussed the issue of ageism, but direct and institutional racism can also act as employment barriers.[117] More generally, many employers prefer to recruit people who are either in employment or who have a recent employment history. Even when employers are keen to recruit unemployed people, they may be using recruitment criteria or processes which discriminate against unemployed applicants; for example, specifying qualifications or experience which are not really necessary to do the job, or failing to notify vacancies to the Employment Service. We will be examining these and other issues in our inquiry into recruiting the unemployed.[118]

48. Donald Houston of the University of Glasgow told us that lowskilled workers often found it difficult to access information about more distant work because of their reliance on Jobcentres and wordofmouth.[119] The Chancellor of the Exchequer announced in the March Budget that 35 Action Teams are to be set up in areas with the highest unemployment and lowest employment. Their role will be to "work with longterm unemployed people, to identify suitable vacancies in neighbouring areas and to bring the two together".[120] We welcome this initiative, which if properly implemented, will provide an additional source of intermediation in areas where individuals do not have formal or informal links to employers. The details of this proposal are not yet known. We urge the Government, when it develops and publishes the details of the Action Teams proposal, to ensure that there are specific targets for helping the most disadvantaged people and that the emphasis will be on placing people into high-quality jobs. The Government should also set out how the Action Teams will work with existing local intermediaries.

Transport

49. The negative impact of job gaps is reinforced by commuting patterns. Evidence suggests that unemployed people are most likely to get jobs within a five mile radius of their home.[121] Enhanced mobility might be a legitimate aspiration of Government labour market policy, but it appears that it should not be assumed to begin with.[122] Representatives of the Doncaster and Wakefield Employment Zone told us that some people did commute to Leeds for work, but that this was not the answer for everybody. Doubt was also expressed about the viability of an employment policy which relied on continued job expansion in a small number of vibrant labour markets such as Leeds.[123] There was concern about the continued availability of suitable development sites in these locations and concern was also expressed about the sustainability of encouraging job seekers to commute long distances; journeys which would primarily be undertaken by road.[124] The South Yorkshire Forum expressed similar concerns.[125] We were told that mobility was impaired partly by personal and cultural factors,[126] but more practically by poor and/or expensive transport links.[127]

50. Surveys of the unemployed have found that transport is one of the major barriers to employment in both rural and urban areas.[128] The problem of poor transport links was also cited during our visit to South Yorkshire. In Grimethorpe we were told that it took up to one and a half hours to travel by public transport to jobs which were four miles from the village. Even where there were direct bus links we were told that often they did not run at times which suited the shift patterns required by employers.[129] In the large conurbations, many manual and low skilled jobs are now located in the suburbs. Donald Houston argued that poor public transport provision to suburban industrial estates often meant that car ownership was essential.[130] Anne Gray noted that even if unemployed people had had a car when last employed, keeping it on the road after several months of unemployment was very difficult.[131]

51. The New Deal for Transport White Paper, which was published July 1998, recognised that many unemployed people rely on buses.[132] The White Paper envisaged the development of five-year local transport plans which would include measures to reduce social exclusion.[133] It suggested that, in urban areas, local authorities would need to "explore with operators the scope for extending bus networks so that they provide better access to opportunities for work".[134] These sentiments were reiterated in the Guidance on Provisional Local Transport Plans issued in April 1999.[135] In addition the Government has sought to alleviate the transport problems in rural areas through the funding of Rural Bus Partnerships.[136] The Local Government Association told us that it was "not necessarily always the case that a transport plan reflects issues of people's opportunities to travel towards employment and training".[137] The Minister for Employment stated that where there were structural problems with transport, fundamental solutions were required and that the DfEE was working with DETR to achieve this outcome.[138] The Minister also argued that this would be an area where the Employment Service could take a more strategic role in partnership with the regions.[139] The Guidance on Provisional Local Transport Plans suggested that the New Deal partnerships would be a useful forum for discussions on promoting better transport links for areas of high unemployment.[140] We welcome the Minister's commitment to engaging at the national level with the DETR on transport issues and the prospect of an enhanced role in this area for the Employment Service. It is important that the Transport Plans being developed by local authorities should be effective in improving people's access to work. We recommend that the Department of the Environment, Transport and the Regions and the Department for Education and Employment should work jointly with local authorities to develop "access to jobs" targets for inclusion in the full five-year transport plans which will come into effect in 2001.

52. The cost of public transport can also be a barrier to employment, particularly if the jobs that are available are low skilled and low paid. Donald Houston argued that job search activities were heavily influenced by the "anticipated cost and ease of commuting".[141] He argued that income was the main factor determining the willingness to commute and that, in general, higher earners travelled further to work. This point was amplified by Anne Gray. Her research in Norfolk suggested that unemployed people in Lowestoft were unable to take otherwise suitable jobs in Norwich because of the cost of commuting between the two locations. She argued that this exacerbated the benefits trap.[142] There are many local transport subsidy initiatives associated with the New Deal and we commend those who are providing such assistance.[143] This help is confined to programme participants and does not extend to those leaving the New Deal and entering unsubsidised employment. The New Deal for Transport White Paper held out the prospect that operators might find it commercially beneficial to offer lower fares in deprived areas. Given its importance we believe that it is insufficient to leave this issue to the discretion of individual operators. The cost of public transport can present insurmountable barriers to mobility and employment. We recommend that, in areas displaying the lowest levels of employment, the Government should pilot a scheme in which the travel to work costs of those leaving long-term unemployment would be subsidised for a period of six months.

The benefit trap

53. For many, the financial risks of leaving benefits for work are a very real barrier to employment. The risks are due to the poor quality of many jobs, which provide little security and are relatively low paid, and a complex and inflexible benefit system which can lead to the disruption of income during transition periods. Improvements have been made by measures to "make work pay", such as the National Minimum Wage which was introduced on 1st April 1999 and the Working Families Tax Credit which replaced Family Credit on 5th October 1999.[144] In its recent assessment of the National Minimum Wage the Low Pay Commission found that it had already brought substantial benefits to large numbers of people, especially women and parttime workers.[145] However, the TUC told us that there were still work disincentives in the benefit system and that these disincentives were greatest in the most deprived communities. It argued that a number of changes to the benefit system were required, including extending benefit payments for people moving into work.[146] Since October 1999 lone parents who have been claiming benefits for at least 26 weeks continue to receive income support for two weeks after they enter employment. In the March Budget the Chancellor of the Exchequer announced that, from Spring 2001, the Government will introduce a Job Grant of £100 for people who move from welfare into work. People who move into work of more than 16 hours a week, expected to last five weeks or more, and who have been claiming Jobseekers' Allowance, Income Support, Severe Disablement Allowance or Incapacity Benefit for at least 52 weeks will be eligible. The Job Grant will replace the Jobfinder's Grant and Jobmatch.[147] In many cases Job Grant will represent much less than a claimant's fortnightly benefit payment and might not provide the transitional assistance that is required. In addition, the assistance that Job Grant will provide to people who have been unemployed for more than two years, is less than the amount available through the Jobfinder's Grant.[148] We recommend that people who have been unemployed for one year or more should continue to receive their existing entitlement to income support or Jobseeker's Allowance for two weeks after they enter employment.

54. The TUC also argued that, in order to remove the financial risk associated with moving from benefit into work the system needed to be improved so that the transition was seamless.[149] The Policy Action Team on Jobs noted that many unemployed people expressed concern about the financial consequences of making the transition from welfare to work.[150] It urged the Government to pilot a benefit guarantee scheme.[151] We agree with the Policy Action Team on Jobs and recommend that the Government should introduce a scheme, initially for those who have been unemployed for two years and over, which guarantees that if a job collapses within 12 weeks of a person taking up employment all relevant benefits will be reactivated at the preexisting level until a new assessment can be made.

55. A Housing Benefit (HB) and Council Tax Benefit (CTB) Extended Payments scheme has been in existence since 1996. This scheme extends the payment of HB and CTB for four weeks after employment has begun at a rate equivalent to the amount received in the last week of the entitlement to Income Support (IS) or incomebased Jobseeker's Allowance (JSA). A separate claim is required for the extended payment scheme and this has to be submitted within eight days of the day that entitlement to IS or incomebased JSA ceased.[152] The scheme was introduced in recognition of the extent to which the disruption to housing benefit could act as a disincentive to taking up work.[153] The National Association of Citizens Advice Bureaux argued that "whilst the scheme has been very helpful in ensuring stability in housing benefit payments during the transition into work, the requirements to make a separate claim for the benefit within eight days, together with the restrictive conditions attached, has meant that many claimants taking up work have not benefited".[154] The Citizens Advice Bureaux service argued that when a claimant ceased to be entitled to IS or income based JSA, the existing claim should automatically be extended for four weeks.[155] In the March budget the Chancellor of the Exchequer announced that the Government would simplify the rules of the Housing Benefit Extended Payments scheme from April 2001.[156] We welcome the commitment to make payments under the Housing Benefit Extended Payments scheme as near-automatic as possible. We also welcome the Government's commitment to provide a four week Income Support for Mortgage Interest runon for those entering work.

56. The purpose of the our proposals for removing benefit traps is to encourage long-term unemployed people to enter employment at the earliest possible stage. In our view it is likely that the costs of the proposals would be partially offset by reduced benefit payments and increased tax revenue. We recommend that the Government should undertake and publish an analysis of the cost of our proposals for removing benefit traps.

111 Q. 118; Meeting with the Centre for Full Employment, Sheffield, Annex A, p. xlvi, para. 56. Back

112 Q. 116. Back

113 Jobs for All, Report from the Policy Action Team on Jobs, DfEE, December 1999. Back

114 The New Deal for Young People: National Case Studies of Delivery and Impact, ESR 30, Employment Service, November 1999. Back

115 Cm 4479, Pre-Budget Statement, HM Treasury, November 1999, para. 4.21. Back

116 DfEE Press Notice 05/00. Back

117 Meeting with Black Card, Sheffield, Annex A, p. xlvii, para. 62. Back

118 Education and Employment Committee Press Notice 11 1999/2000, 16 February 2000. Back

119 Appendix 1, para. 10. Back

120 Budget 2000 Prudent for a Purpose: Working for a Stronger and Fairer Britain, HC 346. Back

121 Q. 104. Back

122 QQ. 15 & 157. Back