Conclusion
42. We heard evidence against using the suggested
"employment ratio" from Mr Dave Simmonds of the Centre
for Economic and Social Inclusion. He said: "First of all,
we believe that a rate should be a rate [
] [it] should be
expressed as a percentage of all of those people who at present
are deemed to be within the labour market and available to work."[35]
This point is a persuasive one. We
conclude that an employment statistic expressed in terms of a
percentage, but which does not actually represent the proportion
of any single group which is in employment, would be misleading.
The measure used by the DWP to track progress towards the employment
rate aspiration should be a rate and not a ratio.
43. At present, the 80% employment rate is defined
as an aspiration for the DWP, and not a target. It does not appear
in the DWP's PSA targets and there is no timeframe associated
with it. However, the Secretary of State recently said "Today
the achievement of an 80 % employment rate and the eradication
of child poverty are not seen as merely rallying calls for change
- but real targets that people expect to be delivered. And rightly
so - for that is what they are." As
we have explained above, we think that the figure of 80% needs
to be more firmly grounded by an explanation of who is expected
to be within the remaining 20%. If the DWP is going to take the
employment aspiration seriously, then it ought to include it within
its PSA targets arising from the next Comprehensive Spending Review.
This could be done by agreeing more ambitious targets for raising
the employment rate than the current PSA target.
44. The DWP's relevant PSA target is, over the three
years to Spring 2008, and taking account of the economic cycle,
to:
- "demonstrate progress
on increasing the employment rate;
- increase the employment rate of disadvantaged
groups ; and
- significantly reduce the difference between the
employment rates of the disadvantaged groups and the overall rate."[36]
45. The DWP PSA and Technical Note explains that:
"For lone parents, an increase in the employment
rate of at least 2 percentage points and a reduction in the gap
of at least 2 percentage points is required for the sub-targets
to be met. For the other groups the sub-targets will be considered
to be met if an increase in the employment rate of at least 1
percentage point, and a reduction in the gap of at least 1 percentage
point, is achieved. These target levels are set on the basis that
changes in data of approximately these proportions can be regarded
as significant."[37]
46. We
have recommended above the way in which we think the employment
rate aspiration should be calculated. In setting a new PSA target
for the employment of disadvantaged groups, we recommend the DWP
make clear how far achieving the sub-targets will take it towards
its employment rate aspiration. The DWP should specify the timeframe
within which it wants to achieve the targets which it has set
for the employment rates of disadvantaged groups, and, based on
this, the timeframe within which it hopes to achieve the employment
rate aspiration.
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