Committee of Public Accounts: Press Notice

SUSTAINABLE EMPLOYMENT: SUPPORTING PEOPLE TO STAY IN WORK AND ADVANCE

Publication of the Committee's 13th Report, Session 2007-08

Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:

"Far too many people bounce back and forth between short-term employment and being on benefits. Some 40 per cent of those recipients of Jobseeker's Allowance who get a job are back on welfare within six months. It becomes extremely difficult for individuals in this situation to find the enduring jobs which can raise them and their families out of poverty.

"Those most likely to be in this position tend to have the lowest skills and the jobs they move into tend to be the least likely to provide any training. Improving their skills will increase their chances of securing jobs that last. Government initiatives to increase the involvement of employers in training their low-qualified staff have shown signs of success. The lessons learned must be applied more widely and to business sectors short of staff.

"The two key departments - the Department for Work and Pensions and the Department for Innovation, Universities and Skills - must work together more systematically if they are to help into long-term employment those of our citizens for whom employment is a brief interlude between a morale-sapping existence on benefits."

Mr Leigh was speaking as the Committee published its 13th Report of this Session. On the basis of evidence from the Department for Work and Pensions, the Department for Innovation, Universities and Skills, Jobcentre Plus and the Learning and Skills Council, the Committee examined their efforts to deliver sustainable employment, focusing on the reasons why people are unlikely to stay in work; the contribution which education is making to improving employability; and whether employment programmes reflect the needs of business and local markets.

Although the United Kingdom is experiencing high employment levels, many people still have difficulty staying in work. Of the 2.4 million Jobseeker's Allowance claims made each year over two-thirds are repeat claims. While some turnover is a natural feature of the labour market around 40 per cent of people moving from Jobseeker's Allowance into work will make another claim for Jobseeker's Allowance within six months.

The Department for Work and Pensions and the Department for Innovation, Universities and Skills have been slow to develop suitable shared objectives and targets for sustained employment. To date, the Department for Work and Pensions has used 13 weeks in work as a yardstick for sustained employment, but it now accepts that this measure is too short. The Departments have a commitment to develop shared performance measures that reflect how training contributes to sustained employment, but current data systems do not allow this information to be measured for each individual client.

People increasingly need better skills and qualifications to compete in today's labour market. The Department for Innovation, Universities and Skills has successfully achieved its interim targets for boosting the basic skills of 1.5 million adults between 2001 and 2007 and increasing the number of adults in the workforce with Level 2 qualifications by 1 million between 2003 and 2006. But the Government has now set more challenging targets to be achieved by 2020: 95 per cent of adults to achieve functional literacy and numeracy skills (the levels needed to get by in life and at work) and 90 per cent to achieve a first full Level 2 qualification (equivalent to 5 GCSEs at grades A*-C). The Departments hope to achieve these goals by introducing skills screening for benefits recipients, relaxing rules that restrict access to training provision for people on benefits, promoting better integration and take-up of pre-work and in-work training, increasing government funding for basic skills training, and launching a new Skills Account to give adult learners greater choice and control over learning. Through Skills Accounts, learners will be able to purchase, using public money, relevant learning at an accredited, quality assured provider of their choice.

The difficulties that low-skilled employees face in competing in today's labour market are compounded by people with the lowest skills being the least likely to be trained by their employers. Around a third of employers do not invest in training, although the number of employers who say that they are training their staff has increased from 900,000 (65 per cent) to 978,000 (67 per cent) in the last two years.