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Councils need more powers to tackle all the causes of unemployment

Claire Mansfield
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Many of our towns and cities have undergone dramatic aesthetic changes but, underlying many areas, the issue of ‘employability’ is holding back local economies.

In the context of devolution, this is an ongoing and pervasive issue. According to the Office for National Statistics data release for August 2016, unemployment in the North East was at 6.8% – the highest in the UK – whilst the South East was at 3.7%.

Issues of unemployment and skills go hand in hand. Whilst exploring employability, the Association for Public Service Excellence and the New Local Government Network surveyed local authorities and found that 79.8% of councils said a lack of skills was the major barrier to employment in their area. A further 65.4% reported mental health issues, alongside geographic barriers, housing and debt as barriers showing that there can be no single policy response to long-term unemployment.

Problematically, there is a lack of local coordination between key public services that help the unemployed into work. We know that ill-health and unemployment can be related, but employment status is rarely a matter picked up by GPs. We know that long-term unemployment can be a causal factor in mental health but we will treat the symptoms before recognising the potential cause: the lack of work. So, can more be done?

That is what we explore in our report, Work it Out: Creating Local Systems of Employability Support. This research highlights ways to develop local responses, placing local councils at the heart of the solution. Looking at the national dynamic, the Department for Work & Pensions is tasked with reducing claimant count numbers, but this is a blunt instrument. For local economies, matching the right skills and the right people to local growth is essential, yet councils have little say over the operation of DWP policy. According to the Joseph Rowntree Foundation, for every pound of public expenditure saved when a person on unemployment benefit moves into a living wage job, councils receive just seven pence.

We call for the empowerment of councils, equipping them to deliver on employability. To do this, the 16-18 budgets should mirror that of the 19+ budgets, and be distributed at the combined authority or individual council level using local knowledge. The apprenticeship levy should also be devolved, enabling councils to coordinate and distribute funds. We need to create a system of co-commissioning mainstream employment support; a starting point would be the integration of Jobcentre Plus with council services. Future devolution deals should include more budgetary powers to enable local councils to support the long-term unemployed into work.

We are confident that, with the right mix of powers and budgets, councils can deliver a better deal on employability.

Paul O’Brien, chief executive, Association for Public Service Excellence and Claire Mansfield, head of research, at New Local Government Network

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