Memorandum submitted by Age Concern and Help the Aged (WR 01)

 

 

1. Age Concern and Help the Aged

1.1 Age Concern is the UK's largest organisation working for and with older people to enable them to make more of life. In England, we are a federation of around 370 independent charities which share the same name, values and standards.

 

1.2 Help the Aged is the charity fighting to free disadvantaged older people in the UK and overseas from poverty, isolation and neglect. It campaigns to raise public awareness of the issues affecting older people and to bring about policy change.

 

1.3 Age Concern England and Help the Aged are joining together in April to form a single new charity dedicated to improving the lives of older people and tackling the disadvantages they experience.

 

1.4 Age Concern England and Help the Aged would be happy to provide supplementary oral or written evidence to the Public Bill Committee.

 

2. Summary

2.1 Help the Aged and Age Concern support the Government's objective that no one should be written off from the labour market and welcome the improvements in the flexibility of support offered to benefit claimants as they attempt to return to work. However, we believe there is not sufficient evidence to increase conditionality for those aged over 50.

 

2.2 The needs of older workers have been overlooked so far in the debate on the impact of the Welfare Reform Bill. It is important that the Committee focuses on the impact of increasing conditionality on this age group. Without this scrutiny, there is a risk that flawed and inappropriate policies will be introduced.

 

2.3 Insufficient research and analysis has been undertaken to evaluate the likely impact of these proposals on the over 50s and the evidence presented by the Government to support increased conditionality is not sufficiently disaggregated by age.

 

2.4 People over the age of 50 have particular support needs and evidence from previous initiatives, such as Pathways to Work, shows they have had a different impact on older age groups compared to the rest of the workforce.

 

2.5 In the absence of this evidence, we do not support increased conditionality for people over the age of 50. Should this legislation be passed, then at the very least, sanctions to withdraw benefits must not be implemented among the over 50s unless three tests have been passed (i) there are enough jobs available; (ii) better back-to-work support is provided, tailored to the needs of this age group; and (iii) improved training is available for personal employment advisers which focuses on older people's employment needs.

 

2.6 It would be counter-productive to implement any measures to increase conditionality until the economic climate has improved. Government figures show that unemployment among those over 50 is rising at double the rate of any other age group and older workers were hit very hard by job cuts in the last two recessions. Even in a favourable economic climate, when people over 50 drop out of the labour market, they are much more likely to stay unemployed for longer periods than other age groups. Increasing conditionality against the current economic backdrop would undermine the Government's welfare to work and anti-poverty strategies and would be unfair on those affected.

 

2.7 Elsewhere in the Bill, the provisions to introduce a power to pay Pension Credit automatically in some pilot areas is a vital step forward for the Government in ensuring the poorest older people can access the benefits they are entitled to. We wholeheartedly support this proposal.

 

3. Will conditionality work for the over 50s?

3.1 Part 1 of the Bill introduces 'work for your benefit' schemes to assist people to obtain employment. While we agree that people who are capable of work should make steps to find employment, we believe that more evidence needs to be gathered to determine the most effective incentive structure for helping those who are furthest away from the labour market into work.

 

3.2 The Government has insufficient evidence that increasing conditionality will work for those aged over 50. The Department for Work and Pensions (DWP) published Professor Paul Gregg's independent report on conditionality and support: Realising potential: a vision for personalised conditionality and support. The report sets out recommendations which the author believes the government should adopt. These include proceeding towards a Single Working Age Benefit, building the evidence base around adviser flexibility, and considering whether the support currently on offer is sufficient to deliver the Government's aims. There is only one reference to over 50s in the report.[1]

 

3.3 The Department for Work and Pensions (DWP) has published a research paper that reviews efficacy in the operation of conditionality in the UK welfare state over that past decade. The paper concludes that conditionality policy should:

· help people overcome the issues that stop them moving towards employment;

· be combined with personal support tailored to people's individual circumstances; and

· ensure that expectations are reasonable and that sanctions are proportionate.

 

There is only one reference to workers aged over 50. The conclusions the report draws are not sufficiently disaggregated by age.[2]

 

3.4 We have commissioned further research into the barriers facing older people returning to work and what support is most helpful for them. We hope to share this with parliamentarians during the progress of the Welfare Reform Bill.

 

3.5 Paid work is a route to independence, health and well-being only if it is good quality, fairly paid and flexible. Increasing the personalisation of back-to-work schemes shows a welcome commitment to help people back into work but many over 50s who use employment services find that their individual circumstances, including existing work experience, are not properly taken into account. Many of the over 50s who use employment services can be apprehensive and lack confidence, others are frustrated and disillusioned by a system that does not meet their needs. A regime that has the effect of making clients anxious and intimidated, rather than supported and enabled, will dissuade them from using it. It is therefore important that the new regime creates an environment that is sufficiently encouraging, enabling and supportive. The government's goal of reducing social exclusion and poverty for the over 50s will not be fully achieved unless the structural causes of worklessness and poverty are tackled.

 

3.6 We believe that increased conditionality can only be considered for clients who are able to work if they are offered appropriate and timely support. Historically, this has not always been the case. For example, workshops conducted by the Policy Studies Institute found that provision was not always appropriate for older people. The Intensive Activity Period, for instance, was less appropriate for those with considerable work experience. In these cases, although there was a need for skills to be refocused, more account needed to be taken of clients' existing experience.[3] Age Concern's research also points to a mismatch been provision and need, particularly in relation to levels of emotional support provided.[4],[5]

 

4. Three tests before increasing conditionality

4.1 Age Concern and Help the Aged believe the Government must pass three tests to meet the needs of older workers before increasing conditionality.

 

4.2 Test 1: Older workers with different profiles are able to access a wide range of jobs suitable to their needs and employers see and value the benefits of employing people aged over 50.

At present, many employers do not see and value the benefits of employing people aged over 50. Particular attention, therefore, needs to be placed on tackling age discrimination in the workplace. The first fair treatment at work survey, based on face-to-face interviews with nearly 4,000 employees across Great Britain, found that age was the most common reason given for unfair treatment at work. Seven in every 10 employees who said they had been treated unfairly at work in the last two years considered this to be discrimination. Of the six equality strands, discrimination at work relating to age was the joint third most common reason given.[6] We recommend that further initiatives are introduced to encourage employers to adopt age-positive employment practices and raise awareness about age equality amongst their staff.

 

4.3 Test 2: Services are available that focus on overcoming the full range of barriers that older clients face.

Our research and experience in providing employment services indicates that people over 50 require support to overcome the following barriers:[7],[8]

· poor IT skills;

· poor interview skills;

· lack of familiarity with modern approaches to job searches and selection;

· health problems which limit work readiness;

· increasing caring responsibilities or changing family roles;

· the need to retrain or transfer established, high-quality skills to a new sector.

 

4.4 Low confidence is a particularly significant barrier for some older job seekers. Many report that being out of work affects their self-esteem, morale and confidence. Yet only a few of them report that they have had support to come to terms with the psychological effects of being out of work. We therefore recommend that effective and timely psychological and emotional support is provided. We believe that support to overcome these types of barriers needs to be provided at an early stage, otherwise unsuccessful job search is likely to reinforce negative self-perceptions.

 

4.5 If levels of conditionality are to be increased, we also believe that this should be done on an individually-specific basis and that choice between different options should be provided. This is because other employment programmes, such as Pathways to Work and New Deal 50 Plus, indicate that choice helps ensure ownership and a genuine commitment to the activities undertaken.

 

4.6 Test 3: Personal Advisers have the awareness, skills and confidence to provide personalised support suited to the needs of older clients.

Our research indicates that people over 50 would welcome the following support:[9]

· advisers who provide one-on-one support, in assessing their skills and experience and giving them realistic advice on potential jobs and training activities;

· regular contact and feedback from recruitment agencies; and

· the provision of mutual support and information groups for people over 50.

 

4.7 Some have told us that they view Jobcentre Plus as being impersonal and remote, and about box ticking and statistics rather than providing a service genuinely useful to individuals and employers. They feel that Jobcentre Plus workers are insufficiently trained to be able to meet their needs and have experienced poor provision of support and advice, such as being asked to apply for inappropriate jobs.

 

4.8 Although older people have benefited from Pathways to Work, the programme has failed to reduce age-based variations in people's chances of leaving incapacity benefit. Evaluations of New Deal 25 Plus have also found that the type of provision available has not always been appropriate for older clients.[10]

 

4.9 We therefore believe that further steps need to be taken to ensure that Personal Advisers fully understand the needs of the 50+ client group:

· Intensive support should be made available to over 50s on benefits and out of work after three months; after 6-12 months out of work very few return to work.

· Back-to-work programmes need to encompass confidence building, a focus on transferable skills and re-training for new careers where appropriate.

 

5. Employment and Support Allowance and work related activity

5.1 Clause 8 of the Bill allows the Secretary of State to specify a work related activity which Employment and Support Allowance (ESA) claimants in the work related activity group must undertake in order to meet the requirements of the claim. We feel more clarity is needed over the process of assigning people to either Job Seekers Allowance or ESA - and for those assigned to ESA how they are assigned, to either the Work Related Activity Group or the Support Group. Older people are increasingly likely to have health problems which impact their ability to work. It is important that issues of health and wellbeing are fully acknowledged and ensure that people with poor health are not unreasonably expected to undertake work related activity.

 

6. Older workers in an economic downturn

6.1 The Committee must consider the Welfare Reform Bill in the context of the current economic downturn. Older workers were disproportionately affected by job cuts in the last two recessions. Employment of men aged 50-64 dropped by 11% between 1981 and 1985 and 7% between 1990 and 1993. Government figures show that the 50 plus age group has seen the greatest rise in unemployment over the past quarter at 29.8%.[11]

 

6.2 Once older people are out of work for 6-12 months the chances of them working again are very low, so early intervention is particularly important for this group. Unemployed men aged over 50 only have a one in five chance of being in work two years later. The chance of older men finding future employment falls by a quarter for each year they are out of work. [12]

 

7. Pension Credit pilots

7.1 Clause 21 - 22 of the Bill provides for state pension credit pilots. It provides the power to test automatic benefit payment which Age Concern and Help the Aged wholeheartedly support. This will allow the Government to test this important measure in key pilot areas which will allow the payment of pension credit without a claim needing to be made. We have long argued that system should move to one where payments made automatically and this is an important first step. Currently, up to 1.8 million older people are missing out on pension credit despite ongoing efforts by organisations like Age Concern and Help the Aged alongside the DWP to encourage people to claim.

 

7.2 After a number of years of falling poverty rates the number of pensioners in poverty increased by 300,000 in 2006-07 on a before housing costs basis (200,000 after housing costs). Increased benefit take-up through increased automaticity would help the Government achieve the aims set out in Public Service Agreement 17 'To tackle poverty and promote greater independence and well being in later life'.

 

7.3 Pension Credit was introduced in 2003 - its forerunners were Minimum Income Guarantee (1999 to 2003), Income Support (1988 to 1999), Supplementary Pension (1966 to 1988 ), and, at the start of the welfare state National Assistance (1948 to 1966). Despite changes in rules and names, active work by welfare rights advice agencies and (from 1997 onwards) the Government, estimated take-up levels have remained broadly similar with a quarter to a third missing out.

 

Table 1 - Take-up of benefits by pensioners[13]

	1987[14]   Supplementary Pension	1992   Income Support	1996-07   Income Support	2001-02   Minimum income guarantee	2006-07   Pension Credit	Pension Credit guarantee[15]
Take-up rate	74%	65%-77%	61%-70%	63-72%	59-67%	68%-78%

 

 

February 2009

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[1] Realising potential: a vision for personalised conditionality and support.

http://www.dwp.gov.uk/welfarereform/realisingpotential.asp

[2] More support, higher expectations: the role of conditionality in improving employment outcomes. http://www.dwp.gov.uk/welfarereform/noonewrittenoff/conditionality_paper.pdf

 

[3] Wilkinson, D., 2003. New Deal for people aged 25 and over: A synthesis report. Policy Studies Institute, London.

[4] Age Concern, 2006. 'Not ready for the scrapheap' Looking for work after 50. Age Concern England, London.

[5] Interviews with six local Age Concerns.

[6] http://www.dti.gov.uk/employment/research-evaluation/errs/page13419.html

[7] Age Concern, 2006. 'Not ready for the scrapheap' Looking for work after 50. Age Concern England, London.

[8] Interviews with six local Age Concerns.

[9] Age Concern, 2006. 'Not ready for the scrapheap' Looking for work after 50. Age Concern England, London.

[10] Page, J., Breen, E., & Middlemas, J., 2006. Gateway to Work New Deal 25 Plus pilots evaluation. Department for Work and Pensions, Leeds. Wilkinson, D., 2003. New Deal for people aged 25 and over: A synthesis report. Policy Studies Institute, London.

[11] Labour Market Statistics, January 2009

[12] Campbell, N., 1999. The Decline of Employment Among Older People in Britain, CASE paper 19. London School of Economics, London. According to the British Household Panel Survey older workers only have a one-in-four chance of finding another job once they have had a spell out of work.

[13] All figures come from the DWP/DSS Income related benefits estimates of take-up series. Prior to 1994 estimates were based on the Family Expenditure Survey and will not be directly comparable with later estimates which are based on the Family Resources Survey.

[14] The figures for 1987 were presented as single point estimates.

[15] Pension Credit introduced a new element - the 'saving credit'. The rate of take-up of guarantee credit is more directly comparable with previous benefits.