Committee of Public Accounts

Press Notice No. 10 of Session 2004-05, dated 24 May 2005


Mr Edward Leigh MP, Chairman of the Committee of Public Accounts in the previous Parliament, said today:

"Over-50 does not mean over the hill. Joblessness among people over-50 is costly to them as individuals and incredibly wasteful to the economy as a whole. Despite recent improvements there are still up to one million people in this age group who want to work but are being held back for a variety of reasons.

"New Deal 50 Plus is the flagship programme for helping older people get back to work, but we have no way of knowing how effective it really is because, unlike other New Deal initiatives, it has not been subject to a proper economic evaluation.

"I want to see far better use made of performance targets. Within the Department for Work and Pensions, there should be targets not only for the number of people who find jobs, but also for the number of people who are moved closer to employability - encouraging staff to focus on those with the greatest need. Public bodies with a broader role in encouraging employment-such as Regional Development Agencies-need explicitly to target older people.

"There are twice as many people on incapacity benefits now as there were in the late 1980s, with people over 50 accounting for fully half of all cases. The DWP needs to evaluate ongoing pilot programmes thoroughly to help older people get back into the workforce and resources should be identified to fund initiatives that work."

Mr Leigh was speaking as the Committee published its 10th Report of the 2004-05 Session, which examined the Government's efforts to help older people find employment.

The Government aims to help a broad range of people to overcome barriers to their finding work and since 1998 has spent over £800 million on helping one group-the over-50s. There are around 2.7 million people between 50 and state pension age who are not working. This is a very diverse group. Between 700,000 and 1 million would like to work, and of these, some 200,000 are actively seeking employment. The barriers to work include age discrimination, lack of qualifications and skills, and health conditions or disability.

There are significant benefits for individuals, businesses and the economy in older people being able to work. Unemployment may result in poverty and social exclusion. Benefits from employers arise, for example, from the proven reliability of many older workers which can lead to lower staff turnover, greater productivity and skills retention. The loss of skills and experience is wasteful and the cost to the economy of the relatively lower levels of employment amongst older workers has been variously estimated at between £19 billion and £31 billion a year.

As well as being able to take advantage of employment programmes and training opportunities aimed at the wider adult population, the Government has introduced or supported initiatives to address specifically the problems faced by older workers. These include:

• the New Deal 50 Plus, to help people aged 50 and over who have been unemployed for six months or more return to work, by providing access to a Personal Adviser, as well as an in-work financial incentive and a training grant;

• the Age Positive campaign to encourage an end to age discrimination in the workplace; and

• support for the PRIME initiative to help people over 50 interested in self-employment.

By September 2004, the New Deal 50 Plus programme had helped an estimated 158,000 into work at a cost of £250 million. Compared with other programmes, performance data is limited and a full economic evaluation has not been undertaken. Older workers can also benefit from other programmes such as New Deal for Disabled People and New Deal 25 Plus. Services to help older people into work are delivered locally and so need to be influenced by local circumstances and individual customer needs. Jobcentre Plus is seeking to increase the flexibility within its programmes to assess and meet individual needs.

Around 1.3 million people aged between 50 and 64 are on incapacity benefits, almost half of whom have been claiming for at least five years. The Department is trialling new ways of helping claimants off incapacity benefits and will evaluate their success by 2006. It does not currently have the resources to roll out the pilots nationally.

There are a number of other barriers to employment for older people. For example, they often have lower levels of qualifications and skills. Local Learning and Skills Councils offer a range of programmes but only seven out of 47 Councils have specifically addressed issues relating to older learners in their strategies. The Department for Education and Skills is currently examining how Councils are helping older workers and learners. Regional Development Agencies also have a role, although the extent to which they are focusing on older workers varies. Age discrimination remains a significant barrier to employment, and the Government is committed to introducing legislation to combat age discrimination by the end of 2006. In addition, a range of measures to promote flexible retirement and help extend working life are also being introduced between 2005 and 2010.

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