Andrew Phillips is a Senior Researcher at Demos.
A day in the life of a Jobcentre is a fascinating insight into the lives of people looking for help to find work. The day I spent at one showed me the dedication of many of the staff working there, who talked to me about what they were doing to help people improve their lives.
But there was one moment that stuck in my mind. It was the receptionist’s response to a man who came in, evidently new to the Jobcentre, and asked for help finding a job.
“We don’t sit you down in front of people and find you a job any more,” she told him. “We haven’t done that for a long time. Most people come here to claim some sort of benefit, and that’s what our work coaches do.”
This response illustrates how the employment support system in the UK has become primarily reactive. Usually, if you want to access support via the Jobcentre and associated programmes, you first need to lose your job, and then go through the process of claiming Universal Credit. In response, the Jobcentre will ask you to attend meetings with your Work Coach, and offer you some support to get into work.
The result is that support is focused on a relatively narrow group of people: those who are out of work and receiving unemployment-related benefits. But this excludes many people, and especially two key groups: those who are currently in work but at risk of leaving the labour market, and those who are out of work but also outside the social security system.
The consequence is that, for example, only around one in ten older people (age 50-64) who are out of work access employment support. Despite a million job vacancies, the UK’s current employment rate (76 per cent) has not yet recovered to its pre-pandemic level, and in this respect the UK remains an outlier by international standards.
In the last decade, there has been significant reform of the benefits system, especially with the introduction of Universal Credit, which is ten years old this year. By contrast, much less attention has been paid to reforming the delivery of employment support, which remains largely the same in 2023 as it was in 2013.
In Demos’s recent essay The Preventative State, we argue that the state needs to shift away from what we call reactive public services, which currently dominate public service spending and activity, towards relational public services which embed a preventative approach. Jobcentre employment support and other employment schemes commissioned by the Department for Work and Pensions are good examples of reactive public services with narrow eligibility criteria.
Yet research shows that falling out of work is associated with negative consequences for people’s long-term employment prospects, their health, and their familial and social relationships – and that the longer someone is out of work, the harder it is for them to return.
What would a preventative approach look like? First, we should offer support to people while in work, and where this is not possible, as soon as possible after leaving work. Redundancy support is a good example of an early intervention, helping to prevent short-term worklessness which, for a proportion of people, will become long-term worklessness.
A co-designed pilot programme called Elevate is being run in the West Midlands for older people made redundant in the manufacturing and automotive sectors, which demonstrates the potential of a relational and preventative approach. Supporting people to find work in their redundancy period not only directly reduces demand on the state by reducing social security spending, but boosts the economy through higher employment.
Building on these principles, Demos has proposed a Universal Work Service. Many good organisations which help people navigate the world of work already exist across the public, private and third sectors, but most citizens are unaware of them. A service open to all, whether in or out of work, would address this by providing advice and signposting for anyone looking to access employment support, skills programmes or careers advice.
Although there would be a short-term investment cost, a Universal Work Service would significantly reduce demand on the state in the long term in three ways.
First, by preventing people falling out of work in the first place. Second, by offering early support to people who have left work: this is cheaper financially than supporting people after they have been out of work for a long time, because they need less intensive support. Third, it would indirectly reduce other types of demand on the state. Research shows that being out of work is strongly correlated with negative outcomes, including increased likelihood of poverty and worse health. Conversely, being in ‘good work’ is positively correlated with a wide range of positive outcomes. Improving support for the 770,000 young people aged 16-24 currently not in employment, education or training (NEET) is an example where the long-term benefits conferred by employment would significantly outweigh the short-term costs of additional support.
This kind of preventative approach will also be crucial in enabling the UK to embrace technological change, with all the potential economic advantages that can bring. Two trends in particular, the increasing use of AI and the shift towards a net zero economy, will impact many people’s jobs. Offering people early universal support – and crucially ensuring this is fully integrated with a high-quality skills system – would help people change careers and move jobs more easily, and mitigate the risk of workers in particular industries being negatively affected by economic change.
Achieving this requires a mindset shift away from solely focusing on those inside the social security system, towards a relational and preventative approach which serves a wider range of people. But if this approach can make the state more effective, boost employment, improve people’s skills and facilitate career changes as society adjusts to new technologies, it could be one of the most impactful ways of reducing long-term demand for the state.