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Labour Calls For Regional Job Support To Tackle Economic Inactivity

Job Centre

3 min read

Labour has called for a more dynamic approach to tackling the UK’s economic inactivity issues by tailoring employment support at a local level and expanding the accessibility of Job Centre support.

Increased rates of economic inactivity has become a battleground issue for politicians as the UK’s poor economic growth eats into living standards. 

The term economic inactivity describes people who are not working and have not been seeking work within the last four weeks, and/or are unable to start work within the next two weeks.

It has risen by 830,000 among adults since the pandemic, with 76% of the rise among those aged 50 and over.

The main reason for rising economic inactivity is long-term sickness, with the number of working-age people inactive because of it rising by 460,000 since the start of the pandemic to 2.5m by late 2022.

Other reasons people are leaving the work market include caring for relatives – like child care – and early retirement.  

Shadow work and pensions secretary Jonathan Ashworth believes that to help tackle the issue of economic inactivity, the government needs to ensure employment support is more localised to “move away from this idea that the secretary of state can sit behind the desk [at the] work and pensions department and design all the employment schemes”.

Ashworth said local approaches are vital to tackle the country's "anaemic" growth as the IMF forecast the UK is set to have the lowest GDP growth in the G7 in 2023 at -0.6%. 

“We want to really shift the power and resources out of Whitehall and give it to these local areas -  whether it's Andy Burnham or Andy Street or Tracy Brabin or whatever the appropriate local arrangement is,” Ashworth told PoliticsHome.

“And say to these local areas: 'You get on and design the employment services and retraining support that you think is needed to get people into jobs in your economy - to create new jobs and attract inward investment'.

“So, our approach is not just significant welfare reforms to the benefit system, it's also… levelling up; this is a real crystal clear example of how we can level up the country... [with a] big shift out of the department of work and pensions.”

Other Labour ideas include opening Job Centre services to everyone by removing the requirement for a person to be on Universal Credit to receive job hunting support.

“If you put employment advisers from the Job Centre – or Job Centre type advisers in mental health services, addiction services – these advisers can also have a beneficial impact in terms of helping people who are out of work for sickness returning to work,” said Ashworth.

“So that's the other big area that we've been pushing the government on as well.”

His remarks come ahead of the budget next week where economic inactivity and economic growth are set to take centre stage, with work and pensions secretary Mel Stride expected to make announcements on welfare reform.

According to the Sunday Times, government funding to companies to provide “health appraisals” are one of the options being considered to reduce the number of people economically inactive due to long-term sickness.

Elsewhere, according to the BBC, the government is considering a Job Centre league table, which would include issuing £250 vouchers to staff who get the most people into jobs.

Chancellor Jeremy Hunt in his Autumn Statement last year said more than 600,000 people would be required to meet with a work coach to receive more support finding employment.

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