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UK ministers want to overhaul jobcentres to focus on career advice rather than policing the benefits system, as they seek to tackle a surge in the number of people who have dropped out of the workforce.
Liz Kendall, the new Work and Pensions secretary, will on Thursday set out plans to create a national jobs and career service, by merging the existing Jobcentre Plus network and National Careers Service.
She will also confirm Labour’s manifesto pledges to give local areas more power to shape and join up work, health and skills support, and to guarantee young people training, an apprenticeship or help to find work.
“Economic inactivity is holding Britain back — it’s bad for people, it’s bad for businesses and it’s bad for growth,” Kendall will say on a visit to Leeds, citing the UK’s unenviable record as the only G7 country where employment has not yet returned to its pre-Covid level.
The latest official data show the number of people who are neither working nor job-seeking has risen by more than 800,000 since 2019, largely due to a rise in health-related inactivity, while the employment rate, at 74.3 per cent, is close to the low point it reached in the middle of the pandemic.
Analysts say this is partly due to demographic pressures and the challenges facing the NHS, but that it has been exacerbated by the increasingly punitive nature of the benefits system.
People assessed as too ill to work receive more financial support with fewer conditions attached; while those claiming jobless benefits can be sanctioned if they fail to attend regular meetings or do not spend 35 hours a week job hunting.
Labour has said it will reform incapacity benefits so people can try a job without the risk of losing benefits if it does not work out.
It has also set a target to raise the employment rate to 80 per cent and said the Department for Work and Pensions must “decisively refocus on work” to this end.
This implies a huge cultural shift. At present, advisers in jobcentres spend much of their time checking whether benefits claimants are complying with the rules of the regime.
Only people claiming benefits can walk through the door of a jobcentre. It is off limits for people simply seeking advice.
“People are pushed away from support because of the hostile environment we have in jobcentres,” said Tony Wilson, director of the Institute for Employment Studies, which is leading a commission on the reform of employment support.
One possible model for reform would be to bring the management of benefits claims largely online, so that staff in jobcentres could focus on careers advice and engagement with employers, he said.
However, Labour has not yet set out details of how it plans to reform the service and some analysts warn that it will be difficult to change perceptions of jobcentres — which are widely distrusted by both jobseekers and employers — without wider reforms of the benefits system.
“The hardwiring of the system is all about checking up on people,” said Tom Pollard, head of social policy at the New Economics Foundation.
He added that reforms would only work if the threat of sanctions was removed and if work coaches in jobcentres aimed to help people get into the right job, rather than pressing them to take any job available.
“My concern would be there are a lot of people who would not use it [the merged job and careers service],” said Andrew Phillips, senior researcher at the think-tank Demos, arguing it would be an uphill task to change an organisational culture currently “tied to . . . getting people off benefits”.
His alternative proposal, set out in a report published by Demos earlier this week, would be to create a “digital front door” for anyone seeking job or careers advice to access support online.