Memorandum submitted by Association of
North East Councils
1. The Association of North East Councils,
the representative body for the region's 25 local authorities,
and One NorthEast, the Regional Development Agency, welcome the
House of Commons Work and Pensions Committee's Inquiry into the
issues of Incapacity Benefit and Pathways to Work. This is an
important area of policy for the North East, is a key focus for
the Northern Way Initiative and is an issue which the Association
has pledged to address within their recently published Manifesto.
2. Through addressing worklessness and the
regional economic disparities that exist between regions of the
UK the Association is committed to fundamentally improving opportunities
and quality of life in the North East.
3. The Association and One NorthEast are
keen to ensure members of the Committee receive a clear picture
of work underway within the region to address issues of worklessness
as well as some of the difficulties faced by partners in the region.
We are committed to identifying policy and practical solutions
to address the issue of worklessness in the North East.
4. The Regional Skills Partnership for the North
East of England seeks support from the Department for Work and
Pensions for our approach, in particular by:
engaging with the regional approach
to maximise the value that this can bring to national policy and
programmes in addition to providing the freedoms and flexibilities
necessary at the local level to address concentrations of worklessness;
ensuring that national policy and
programmes provide adequate scope and resource for locally based
flexible responses to meet the needs of workless people in the
addressing the issue of the reduction
in Job Centre Plus budgets in the North of almost 33% for the
coming year. These cuts will seriously affect the ability to deliver
core employment focused programmes designed to tackle the issue
of worklessness. Current funding formulae allocating funding per
capita do not address regional disparities or concentrations of
worklessness which exist in the North East; and
addressing the operational/regulatory
barriers above which are limiting the ability of the region to
address issues of worklessness.
5. The North East is developing a regional
approach to improving access to employment through active labour
market policies which are appropriate for our Region. We will
provide a coherent, joined-up approach that adds value to national
policies, brings together key partners from the private, public
and voluntary sectors at regional level, and gives scope for locally
responsive, flexible measures.
6. Our approach is led by the Worklessness
Strategic Direction Group (membership and Terms of Reference are
detailed at Appendix A) under the auspices of the Regional Skills
Partnership. The approach taken reflects the particular conditions
of labour markets in the North East, including:
(a) the overall low level of demand for labour
in the region, especially at higher levels, which creates a relatively
undynamic labour market;
(b) the nature of worklessness in the region,
deep, with almost 30% of streets
being concentrations of worklessness;
widespread, with employment rates
in most areas of the North East well below the national average;
engrained, with some families now
containing two or three generations without employment;
(c) a mismatch between employment growth
areas and a dispersed population which means many people seeking
employment face long, difficult and costly journeys to access
employment. Low car ownership levels in some parts of the region
accentuates this issue and highlights the need for effective action
to address access to, and frequency of, public transport links
to employment growth areas; and
(d) the very high levels of reliance on Incapacity
Benefits, reflecting the poor health of many people in the region.
7. The region's approach to improving access
to employment is based around a number of key principles:
ensuring the benefit and tax regimes
meet the needs of the North East in encouraging and rewarding
people taking up employment. A number of barriers and specific
issues already identified are detailed at paragraph 8-19 below;
engaging employers (from the private,
public and voluntary sectors) to ensure that "supply-side
measures" to enable people to take up employment meet the
"demand-side" needs of the economy;
addressing the health needs of the
workless population through active health promotion and integrated
care services with a vocational focus;
maximising the involvement of the
voluntary and community sector, alongside public sector bodies,
to provide a person-centred approach to meeting people's needs.
This builds on evidence that "organisations less obviously
connected to government can play a much more effective role in
securing engagement from some members of target groups";
ensuring that people are given skills
that are directly related to specific employment opportunities,
within a work context wherever possible. Work is also required
to ensure those not in employment are aware of the demand for
such skills and are able to access opportunities for training;
maintaining appropriate support for
people once in employment to encourage retention and progression
in employment. Support is also needed to assist employers in ensuring
issues of equality and diversity are addressed which will also
assist in retention and progression;
supporting employers to help and
enable them to take on and retain people not currently in employment.
Targeted support is necessary to encourage employers to recruit
and retain employees from disadvantaged communities; and
in addition to bringing individuals
back into employment there is a need for preventative measures
to stem the flow from employment on to incapacity benefit. Measures
are needed to support employers to address the health needs of
their current employees through employment practices which promote
smoke free workplaces, flexible working practices and address
stress in the workplace.
8. This approach will be delivered consistently
across the region through an agreed regional framework, overseen
by the Regional Skills Partnership, which will reflect changing
national policies and priorities. This regional framework will
add value to national policy through an agreed assessment of needs
and opportunities, better alignment of resources to address these,
and a common performance management framework across different
funding streams Including Job Centre Plus, Neighbourhood Renewal,
European and One NorthEast Single Programme Funding.
9. A focus on delivery at city/sub regional
level will be taken forward through:
demand-led, sector-based measures
at Travel To Work Area level (City Regions) to enable employers
to lead on actions to attract and develop potential employees;
locally-based flexible, responsive
programmes to engage individuals at neighbourhood level, bringing
together key partners within the Local Strategic Partnerships.
10. Action will be taken, including background
research into effective interventions, to ensure that measures
taken reflect emerging best practice and developing policy priorities
in this rapidly changing area and where necessary, pilot projects
will be developed to test new approaches. This research will need
to ensure the views of IB claimants are sought and able to influence
delivery from the user perspective.
11. We also note the recent announcement
of reorganisation within the Learning and Skills Council and will
be looking to ensure measures are taken to ensure the reorganisation
contributes to tackling worklessness in the region.
12. In working together on this, partners
in the region are looking at how a number of barriers might be
overcome. These are both operational and regulatory and are set
out below. National funding decisions such as the proposed cut
in job centre plus (JCP) budgets in the region for the coming
year also pose a range of issues.
13. There is concern that the cuts in JCP
budgets will reduce the potential for locally based action programmes,
such as Action Teams for Jobs, to continue to make a difference
at the local level.
14. The North East Strategic Worklessness
Group has identified a number of operational/regulatory barriers
facing individuals when they are considering a return to work
following periods of incapacity.
15. As customers become "established"
on higher rates of Incapacity Benefits (IB), there is a concern
that any move into work puts that financial stability at risk,
especially if a return to benefit will be at a lower rate than
before. This risk can be heightened by the impact on other benefits
being received within the household.
16. Although there are existing rules that
protect a return to higher rates of benefit and the 2005 Budget
contained extensions to this process, this process relates only
to those who, for whatever reason, return to IB following a period
of work. In the event that a job simply does not work out, or
was of a temporary nature, and the customer leaves work to return
to Jobseekers Allowance (JSA), there is no such protection. Given
the volume of short and fixed-term jobs available, this may act
as a disincentive to IB customers who might otherwise consider
17. IB customers are eligible for the full
range of Work Based Learning for Adults (WBLA) training offered
by Jobcentre Plus in the same way as JSA customers. An exception
is the "Self Employment Routeway" where the "test-trading",
phase is not available to IB customers. ("Test-trading"
can last for 26 weeks where a customer continues to receive benefit
whilst building their new businessthis process is generally
regarded as the most crucial element of the programme).
18. Self-employment may, in some cases,
be the preferred way out of IB but this policy barrier clearly
represents a disadvantage to IB customers and limits entrepreneurship.
This may prove a barrier to the success of, the recently announced
Local Enterprise Growth Initiative (LEGI) which is intended to
stimulate economic activity in deprived communities through limiting
those able to participate.
19. IB customers can, in some cases, work
a limited number of hours, known as "permitted work".
The maximum period for which this can be undertaken is 26 weeks,
although there are occasions where this can be extended; earnings
cannot exceed £78 per week.
20. A technical anomaly here is that customers
receiving only the contributory element of IB will also receive
all of the wages earned from this permitted work. Customers who
receive the non-contributory element (Income Support) will earn
only the £5 "disregarded" element (this can in
some cases be raised to £20)the rest, however, will
be deducted from benefit.
21. IB customers can currently access WBLA
training on a full-time basis. There will be no effect on the
benefit received but as long as they receive IB they are not eligible
for the £10 per week bonus paid to JSA customers who participate
22. The 16 hour rule while being complex,
relates only to recipients of JSA. It is embraced within primary
legislation that in order to receive JSA, customers must be available
for and actively seeking work. The view was taken to the effect
that anyone undertaking a course of study under 16 hours per week
could still be held as actively seeking and available for work.
This rule does not apply to IB and other benefit recipients.
23. A further anomaly exists between recipients
of the means-tested and non means-tested elements of IB. Specifically
we understand that means-tested benefit recipients are entitled
to fee remission from LSCs whereas this does not apply to those
on non means-tested benefits. This results in some customers having
access to free training while others are not able to do so, depending
upon which benefit they receive.
44 ERS (2005) Effective Interventions to Tackle Worklessness-Review
of Evidence. www.ers.org.uk Back