Before Tuesday’s ESRC-sponsored Ask the Expert at the SMF my answer to this question might have been “…exactly the opposite to what the UK currently has” (see my papers here and here). However, Dan Finn’s presentation has made me take a slightly more nuanced view.
In fact, over time, (depending on the definition and here I assume we mean a labour exchange) the UK has developed a very effective public employment service. Since its inception in the early 20th Century, it has developed into an efficient machine, Jobcentre Plus, which administers benefits and helps match benefit claimants to job vacancies. It has digitalised, led the field in public-private partnerships in delivery and managed significant economic shocks (admirably). It is also a model that has been replicated across the world (I was particularly interested to hear about the “Hello Work” organisation in Japan).
So can the UK sleep easy that it has nothing to left to learn? Perhaps unsurprisingly, my takeaway from Professor Finn’s presentation was that it cannot. For me, Professor Finn’s presentation highlighted at least three key issues:
- The existing model is not all good. The “work-first approach” leads to low-pay, no-pay cycle and leaves many benefit claimants without access to the support they need.
- The challenge ahead of us is changing. Increased footfall and budget and estates cuts are all important but not new. The big change is the shift in what we are expecting from our employment service. Reducing frictional employment by speeding the movement of the unemployed into work is no longer enough. Halving the disability employment gap and increasing productivity are now key objectives and JCP is just not set up to deliver.
- The UK is moving away from what works. The steps it has taken towards public-private delivery through contracted employment support have provided value for money and improved outcomes (for some groups). However, recent changes have seen a cut of 80% in the value of contracted support. The reason for this left the speaker, audience and high-profile tweeter.
So with those challenges in mind – what lessons can policy makers learn to improve the system in future?
Alongside, a move back towards a mixed (social) market of employment support provision, the key here was devolution, integration and risk and reward. If undertaken effectively, a move towards these principles could significantly improve the performance of our national (but not nationalised) employment service. The details can be found in Professor Finn’s slides, but include, for example:
- Sharing of risks and rewards between employers, local authorities and central Government in terms of helping more people with health conditions to remain in or move into work and boosting productivity. International examples include the Netherlands and the USA.
- Ensuring national frameworks are in place to coordinate testing and evaluation and to ensure that lessons are learnt across devolved areas. A What Works Centre for the labour market was the key suggestion.
Taking some of the suggestions forward will not be easy and, if done badly, they could be counterproductive. However, they provide a good foundation of a programme of work for policy makers in Whitehall and the devolved areas to take forward reforms to increase employment, tackle disadvantage and boost earnings. They are well worth a look.
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Building on from the success of Chalk + Talk, the SMF Ask the Expert series brings the best policy output from the world of academia into the heart of Westminster.
This new series of events is aligned with current government consultations and parliamentary inquiries, giving policymakers the opportunity to engage with experts in those policy areas.
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