Government-led initiatives to help unemployed people find work are having a real impact. Programmes such as the New Deal have helped reduce the number of people on benefit, and the average length of claims. However, too many people still do not stay in work once they have found it and more now needs to be done to address the problems faced by jobseekers who cycle between work and benefit, the National Audit Office has today reported.
In 2005-06 over 3.6 million people who had previously been unemployed or economically inactive entered work. However, some experience difficulty staying in work, and of the 2.4 million new Jobseeker’s allowance claims made each year, around two-thirds are repeat claims.
Over a quarter of people who leave benefits and enter work return to Jobseeker’s Allowance within 13 weeks, and 40 per cent are back on benefits within six months. Looking at past trends, nearly half of all people on Jobseeker’s Allowance are likely to have at least two spells on benefits over a five year period. The National Audit Office estimates that if the time that repeat claimants spend on benefits could be halved by increasing the amount of time they spend in work, it would save the taxpayer £520 million a year.
One way to increase the sustainability of employment is to help people improve their skills, so that they can progress from short-term, entry-level jobs to better jobs. To do this, the employment programmes provided by the Department for Work and Pensions need to be better integrated with the programmes for raising skills, provided by the Department for Innovation, Universities and Skills. A number of initiatives, outlined in World Class Skills and In work, better off, have commenced to do this.
In a labour market as large as that of the UK there will always be a degree of movement in and out of jobs. There many reasons why people return to benefits and one reason is that a number of the jobs people find are only temporary – 40 per cent of repeat jobseekers allowance claimants said they were only able to find temporary work. Over 70 per cent said they were not able to find suitable employment and that barriers such as family responsibilities, low skills or disabilities made it hard for them to sustain employment once they had found it.
Improving job retention is essential for the Government if it is to meet its objectives on child poverty and employment rate targets. Lone parents are entering jobs at the same rate as the average, but leave employment at about twice the rate. A 20 per cent reduction in lone parent exit rates from work would lift 44,000 children out of poverty.