If Pat McFadden wants to get Britain back to work, business has the answers
The new work and pensions secretary, Pat McFadden, should look to the City for ideas on getting 9m adults back into work, says Matthew Elliott
Britain’s growth problem is evident to everyone. Since the global financial crisis of 2008, GDP per capita has expanded at barely half a per cent a year – a fraction of the long-run average. Productivity has flatlined, wages have stagnated and living standards have slipped behind many of our peers. The big question for policymakers is how to break out of this cycle.
The answer must lie in the over 9m adults in the UK currently economically inactive or on welfare. Moving people from welfare to work is set to be one of the top policy issues this Autumn. The new Work and Pensions Secretary, Pat McFadden, will be responding to Sir Charlie Mayfield’s report on how to support those with long-term sickness back into the workforce, and it is paramount for Rachel Reeves to stem the ballooning welfare bill to make her figures add up in the Budget.
Worklessness
This, of course, will only happen if businesses are able to provide the right jobs and training for people to fill. Worklessness figures have been heading in the wrong direction, with nearly 200,000 individuals falling out of payrolled employment over the past year. Government measures like the Employment Rights Bill and the hike to Employer NICs have surely not helped this.
In recent months, stories about City firms and employment have been headlined on tales of graduate jobs disappearing because of AI. But as we’ve discovered visiting companies for our new report, Ladders of Opportunity, companies in the Square Mile are truly leading the way in Getting Britain Working again.
Take the global law firm, A&O Shearman. One of the most pressing policy issues since the pandemic has been keeping experienced workers in the labour force. Their Restart programme has used coaching and workshops to bring over-50s back into the workforce, with nearly half of participants finding jobs within three months – a track record much more successful than any government scheme.
Similarly, the insurance and pensions company Aviva has tackled the post-pandemic challenge of retaining experienced workers, by making their entire workplace more flexible, from mid-career development to phased retirement. This shows how businesses are adapting to provide the tools to keep talent in the workforce.
And it’s not just in the Square Mile that financial and professional services firms are supporting people into work and training.
Digital jobs
Look at what is happening in Newcastle and Gateshead. Digital jobs are among the fastest growing, but they are too often closed to those without traditional qualifications. The leading professional services firm Accenture is breaking down barriers through apprenticeships with Newcastle College and bootcamps in coding and cybersecurity for young people not in education or training. One apprentice, Blessing, has already gone from unemployment into a permanent tech role – a small example of the wider growth potential when firms open their doors.
And the accountancy software provider, Sage hosts its annual Girls in Tech event in St James’ Park, bringing thousands of young girls together to meet face-to-face with employers across the tech sector. This has helped inspire many to explore new career pathways in tech.
All of these companies share a common approach. They go beyond simple recruitment to provide mentoring, pastoral care and confidence-building. They partner with schools, colleges and charities. And they recognise that people furthest from the labour market need more than just a job offer – they need a ladder, with rungs to climb and steady hands to guide them upward.
But the crucial thing to note is that these companies aren’t special. These are merely a few examples of the work that goes in day in, day out, in workplaces across the country. Because by providing jobs, businesses are the most powerful engine of social mobility that exists.
Britain cannot afford another lost decade of weak growth. Unlocking the potential of those currently excluded from the labour market could be the most powerful growth policy we have. Businesses across the country are already building ladders of opportunity, and we need to unleash them to tackle the current crisis of unemployment and inactivity.
It has been reported that the appointment of Pat McFadden, one of the Prime Minister’s most trusted lieutenants, is to spearhead a new ‘super ministry’ at the Department for Work and Pensions focused on getting people back to work and boosting economic growth. This is surely a positive sign, and McFadden would be wise to look to the City to understand how businesses are already supporting people into work.
To truly Get Britain Working, businesses must be embraced as the vehicle for getting people back to work. The Autumn Budget should be a Get Britain Working Budget, with a raft of pro-business policies designed to help support businesses create more jobs.
Because if we don’t succeed in moving people from welfare and inactivity into work, we will be stuck in the inevitable doom loop of tax increases and sluggish growth, and all the while, too many millions will be stuck in a lifetime of unemployment and inactivity.
Matthew Elliott is President of the Jobs Foundation and a member of the House of Lords