To cut welfare spending, we must get people back into work – but a punitive system won’t help
Pat McFadden visits a Youth Hub in 2025 (PA Images/Alamy)
4 min read
If work is to be the route out of poverty – which, with nearly four million people in work living in poverty, it currently isn’t – the system must do more than simply incentivise employment.
It must recognise that pathways to work are often blocked, what these blocks are, and how to remove or mitigate against them.
The low level of skills is one of the blocks to meaningful employment. The same is true for in-work progression. Currently only one in six people will escape from low-paid work within 10 years. For too many, in-work training and development isn’t available as it once was, and night school is often expensive and out of reach.
Currently, one in five young people not in employment, education or training (Neet) have no qualifications – twice the level for young people as a whole. But we must also recognise that young people are more likely to be Neet if they have experienced persistent child poverty and family adversity while growing up.
However, it is mainly working age adults over 45 years old who lack basic skills, with approximately one in five having only functional literacy and numeracy.
The inquiries the Work and Pensions Select Committee has undertaken over recent months have also involved taking evidence from employers and business organisations. There’s a clear desire to support young people and other working-age adults, but they say the current economic context for businesses is making this difficult. On top of the issues around vocational skills, employers say young people often lack soft employability skills including teamwork, communication and adaptability.
As the Department for Work and Pensions takes on the responsibilities for post-16 skills, including Skills England, now is the time for a reset.
The mantra from the previous Conservative government was that any work is better than none. They thought the correct approach was sending someone to the first available job, regardless of whether, for example, it aggravated any health condition or was just impossible because of caring responsibilities. This was no good for anyone and made both employer and employee jaded. For people moving in and out of low-paid work, the cycle of deteriorating mental health, missed interviews or Jobcentre appointments and punitive sanctions often led to deepening poverty. This system treats disengagement as a failure of character, rather than a predictable reaction to unsuitable work.
This system treats disengagement as a failure of character, rather than a predictable reaction to unsuitable work
With the new supportive approaches and opportunities through DWP – such as the Right to Try, Youth Hubs and the Youth Guarantee for young people, and Connect to Work and the new employer Vanguards for working-age adults identified in the Mayfield review – I am hopeful that we will not only see unemployment and economic inactivity start to reduce for our young people but also disabled people and older workers too.
The important step the government took to reduce the drivers for new Neets by scrapping the two-child limit and lifting over 450,000 children out of poverty is also acknowledged and supported. By stopping this Neet ‘pipeline’, we will be preventing the Neets of the future.
However, if anything, we need to be more ambitious. My committee commissioned analysis to estimate the potential savings in DWP spending and revenue generated for the exchequer if five per cent of unemployed and inactive working age people entered the workforce. By the end of this Parliament, this was estimated at £20bn. Every £1 of employment support could generate £5-6. But the government’s current levels of employment support are much lower, for example, than what was provided under the New Deal in the 2000s.
There is also more to do on geographical targeting and monitoring of devolved employment support, as well as on the apprenticeship programme.
Meaningful change must be across government, involve education, business, the NHS – and all constituencies.
Debbie Abrahams is Labour MP for Oldham East & Saddleworth, and chair of the Work and Pensions Select Committee
