Chancellor’s Budget confirms government thinks “there are no unemployed people”

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Following the Autumn Budget 2017 statement on 22nd November, ERSA highlights the 1.42 million people who are unemployed across the UK and calls on the Chancellor to rethink the government’s investment in vital employment support.

An independent report by the Westminster Policy Institute (WPI) for ERSA showed the government is planning to spend a massive 80% less on specialist employment support programmes from this year onwards. This dramatic decrease is a telling sign that unemployment is not a priority and that Universal Credit is now seen as the government’s main route for helping the majority of people into work. In addition, whilst welcoming the government’s announced changes to Universal Credit wait times, ERSA is clear the system needs further reform and that welfare reform alone is not enough to help people into good quality employment.

Not only does a reduction in employment support make no sense for unemployed people, it also makes no economic sense. The WPI research also indicated that, if the Work and Health Programme were doubled in size, it could mean wider savings of around £280 million to the Chancellor.

Concerns about the planned reduction in funding for contracted employment support have been echoed by the Work and Pensions Committee, which expressed concerns about the ‘manifold reduction’ in external support that the Work and Health Programme represents and raised doubts about the capacity of Jobcentre Plus to respond to the resulting increase in pressures.

Commenting, Kirsty Mchugh, Chief Executive of ERSA, said:

“1.42 million people are unemployed in the UK, yet the Chancellor has forgotten about supporting them in his Budget. The Government must reverse its 80% reduction in funding for specialist employment services and thus avoid the falling away of frontline expertise from charities and other employment support providers. Current decision making is perverse given the Conservative’s own manifesto pledge to help one million people with disabilities and health conditions into work.

‘We’re also concerned that there is nothing new to help the nearly 12 percent of young people who are unemployed.  With Brexit looming we need to invest in jobs and growth, yet for the first time in years we lack a nationwide programme to help struggling young people to move into work.”

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ERSA’s response to the Autumn Statement

In response to today’s Autumn Statement, ERSA Chief Executive, Kirsty McHugh said:

“ERSA welcomes the Chancellor’s decision to reduce the Universal Credit taper rate as a definite move in the right direction.  However, getting UC right won’t be enough to move many jobseekers with the most complex needs into work. We’re therefore disappointed that the Chancellor has, so far, failed to reverse his predecessor’s misguided cuts to specialist employment support, which will see cuts of around 75% from April 2017. 

“We are pleased, however, to see the continued commitment to devolution with the announcement of the transfer of funds to Greater Manchester and London for employment support. Similarly, we welcome the devolution of the Adult Education Budget to London as an important step in driving more integrated place-based solutions. 

“We also welcome the Chancellor’s recognition of the increased economic uncertainty facing the UK and the scale of the productivity challenge.  Maintaining high quality employment services over this period will be essential to enable the government to react appropriately in the event of a future downturn, whilst helping to close the productivity gap between the UK and other areas.”

The Chancellor must reverse Osborne’s cuts to employment support to secure Exchequer savings

In advance of the Autumn Statement on 23rd November, ERSA, the voice of the employment support sector, calls on the Chancellor to rethink and rebalance the Government’s investment in vital employment support.

In October, ERSA published ‘More than Words: Rethinking employment support for disabled jobseekers’, an independent report by WPI Economics showing the gap between Government rhetoric and reality in terms of support for jobseekers with disabilities and health conditions. The report highlights a planned 80% reduction in Government specialist employment support programmes from next year, announced by the previous Chancellor in last year’s Autumn Statement.

The planned reduction in funding makes no business sense. Doubling the size of the Work and Health Programme (still less than 50% of current spend on support programmes) would give an extra 160,000 disabled people access to specialist employment support and would also mean wider savings of around £280 million to the Chancellor in his Autumn Statement.

Concerns about the planned reduction in funding for contracted employment support were echoed by MPs in last week’s Work and Pensions Select Committee report into the future of Jobcentre Plus (JCP). The Committee expressed concern about the ‘manifold reduction’ in external support that the Work and Health Programme represents and raised doubts about the capacity of JCP to respond to the resulting increase in pressures.

Not only would maintaining effective levels of resource for employment support provide value for money, it would also signal that the Government is serious about its commitment to halve the disability employment gap – a target that would require well over 1.2 million more people with disabilities to enter work. The Government’s Work and Health Green Paper, launched earlier this month, reaffirmed this commitment in words, but now the government needs to begin to make it a reality.

Commenting, Kirsty Mchugh, Chief Executive of ERSA, said:

“Next Wednesday,  the Chancellor has a golden opportunity to reverse the misguided decision made in last year’s Autumn Statement by reaffirming the Government’s commitment to supporting disabled jobseekers. Our research shows that the planned reduction of 80% in funding for specialist employment services means that 45,000 fewer disabled people will be supported for each remaining year of this Parliament. This is bad for the economy, for jobseekers and is no way to show any commitment to halving the disability employment gap.

“As MPs made clear last week in the Work and Pensions Select Committee report, the evidence suggests that these cuts will fail disabled jobseekers and place excessive pressure on job centres. In contrast, our research shows that doubling investment in the Work and Health Programme will bring Exchequer savings of around £280 million.

“If the Government is serious about halving the disability employment gap, it should take bold action by reversing the previous Chancellor’s decision and investing in specialist support for jobseekers.”

ERSA’s submission to the 2016 Financial Statement: Making the VfM case for investing in specialist employment support

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Earlier this month ERSA submitted a representation to HM Treasury ahead of the 2016 Financial Statement.

In its representation ERSA made the case for increasing investment in specialist employment support. ERSA highlights how greater investment would help the government meet its commitment to creating an economy that works for everyone whilst goving value for money from the Exchequer’s perspective.

The representation examines the need for specialist employment support for jobseekers with disabilities and health conditions, the future trajectory of employment support (particularly in relation to Jobcentre Plus capacity) and the need for specialist support for vulnerable cohorts such as prison leavers and homeless people.

Download the representation here.

If you have any comments or questions, you can contact the team at policy@ersa.org.uk

ERSA statement on Autumn Statement and Spending Review

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Commenting on today’s announcements Kirsty McHugh, ERSA Chief Executive, said:

“Employment support has been delivering well for many jobseekers.  We therefore welcome the Government’s commitment to building on the success of Work Programme and Work Choice with new provision in 2017 focused on jobseekers with most need. 

‘The benefits and employment support landscape however can be tricky to navigate for many jobseekers.  We are therefore looking forward to working with government to understand how the different parts of the system will work together and, in particular, to see the financial details of the new programme.  Much has been learned by the sector about how to support jobseekers with the most need into work – this knowledge needs to be fully utilised in the new provision. 

‘ERSA also welcomes today’s announcements of day 1 referral to specialist support under Universal Credit, the extension of Access to Work and the increased funding for mental health services.  The latter, in particular, is very much in line with ERSA’s own recommendations, as lack of access to talking therapies has proved a significant barrier for supporting jobseekers with mental health conditions.

‘We are concerned however that Jobcentre Plus may not be able to cope with the demands placed on it by the Spending Review.  Going forward it seems that all claimants will be required to attend the jobcentre weekly for the first three months of their claim, whilst there will be an increase in the daily signing regime for the very long term unemployed.  We are also concerned that the new system will see some jobseekers left without specialist support for two years before referral to the Health and Work Programme – this is likely to exacerbate their barriers to work and put increased pressure on stretched Jobcentre Plus resource.’

 

ERSA’s briefing on the budget and spending review can be found here.