Devolving labour market powers
A recent report by Localis on local labour markets highlighted how employment rates can be best improved by targeting groups with low participation rates. In doing so, they suggested that devolving “labour market influencing powers” would provide opportunities to tackle “structural barriers for low activity groups”, arguing that “disabled people and the over 50s are two cohorts which existing policy serves poorly, and where a more discrete local approach could have benefits”.
Raising employment rates to match the best performing areas would bring large numbers of people into the productive economy. Interestingly, the Resolution Foundation found the variations in employment rates within and between cities is “largely explained by the differences in the employment rates of “low activity” groups, including younger adults, older people, the low qualified, mothers, single parents, disabled people, and black, Asian, and minority ethnic (BAME) people.” At least on the face of it, social care should play a significant role in this. The make-up of its workforce suggests it might be able to draw more workers from this pool and by its nature help more individuals from within these groups into the labour market.
Looking specifically at the West Midlands Combined Authority area, the Resolution Foundation found the employment rate for young workers to be the lowest of all the combined authority areas. In terms of absolute gains, increasing their employment rate would have the biggest effect as they made up the largest group. However, the largest percentage increases would come from improving the participation rates of disabled people, whose employment rates are particularly low. Indeed, across the country only 48% of disabled people are in work.
In this context, it is worth noting both the Improving Lives; the Work, Health and Disability Green Paper which explored ways to improve the prospects of disabled people by removing barriers to working, emphasising the importance of social care in realising this objective, While the subsequent “Improving Lives: The Future of Work, Health and Disability” strategy was light on social care, there are plans for a Green Paper on the care and support of older people, a work programme on the care needs of working-age adults and an action plan for carers. In a similar vein, a House of Commons Select Committee has highlighted the need to support carers to enter, stay in and return to work. This is something that could potentially help a great deal of people. A recent Common’s briefing showed that over 10% of the population are carers, 21% of them economically inactive.
With the Industrial Strategy committing the Government to work with businesses to adapt to a changing workforce, to help “realise the potential in the labour market, including amongst women, older workers and disabled people”, local industrial and labour strategies might well see benefits in following suit.
All this fits in with the concept of inclusive growth, which according to the OECD is “economic growth that creates opportunity for all segments of the population and distributes the dividends of increased prosperity, both in monetary and non-monetary terms across society”. One of the organisations promoting this concept is the Joseph Rowntree Foundation, who this year identified a “more and better jobs” gap in UK cities of some 5.3 million people in low paid work, insecure work or unemployed. Echoing the Industrial Strategy Commission’s call for a “whole economy perspective”, to tackle this the JRF point to the need for a “whole city”, place-based approach. To tackle this gap the JRF suggest the priorities for industrial strategies should be “identifying and targeting inclusive growth sectors; fostering demand-led skills development; building closer employer engagement and partnership focused on priority sectors; lobbying for greater devolved powers; and strengthening policy analysis and evaluation frameworks”.