by Stephen Timms
Ed Miliband has set out the central challenge his government will need to address: “This country is too unequal. And we need to change it.” Our task is to make this change in a radically different landscape then when Labour took office in 1997.
Ed has acknowledged that inequality will have to be tackled in a period when there won’t be much extra money around. The government’s oft-proclaimed economic plan has fallen disastrously short of its deficit reduction target. We were promised the deficit would be ended in this Parliament. In fact, it won’t even be halved. That means we will be able to shift spending priorities, and to alter regulation, but big new spending programmes – beyond a small number of key priorities with specified funding – will not be on the cards for some years.
With the tools that will be at our disposal, we will need to tackle seriously long term unemployment, especially among the young; to raise real wages; and to tilt the balance of power in favour of the consumer, the citizen and the worker.
Everything points strongly to devolving power. There is, of course, strong impetus in this direction from the Scottish referendum. Powerful economic arguments for devolution were set out in Andrew Adonis’s growth review in July. And the work I have been doing on employment support points to a much more localised approach too.
Andrew Adonis’s review calls for a “bold and simple offer of devolution”, ending the excessive centralisation which has held back economic growth in England. He argues that: “spending on economic development is trapped in departmental siloes that do not sufficiently reflect economic realities”.
His case is well illustrated by the poor performance of the coalition’s approach to employment support. Hundreds of millions of pounds have been spent on the government’s Work Programme, and hundreds of millions of pounds have been spent on skills support – for example by increasing the number of apprenticeships. But there has been a complete disjunction between the policies directing them. The programmes have worked at cross purposes.
They have been overseen by two huge Whitehall departments with different agendas. For example, the criteria set out by the Department for Business, Innovation and Skills make it almost impossible for an unemployed person on the DWP’s Work Programme to start an apprenticeship.
It isn’t a new problem. I was employment minister when David Lammy was skills minister. He and I spent a good deal of time talking to make sure our programmes were lined up. Our successors don’t even seem to be trying.
Directing everything from Whitehall doesn’t work. Bringing everyone together around the table in a city region or county region can work: local authorities, employment support providers, colleges and training providers, employers, housing providers – and the NHS, because for quite a lot of people without jobs, the health service needs to be helping too. That degree of integration cannot be delivered from Whitehall.
Over 90% of people on the Work Programme who claim Employment and Support Allowance (ie are out of work on ill health grounds) don’t achieve a sustained job outcome. Far fewer people are gaining employment within two years than the DWP claimed at the outset would be the case if there was no programme at all. A much more promising approach is being pioneered in Greater Manchester, for people who leave the Work Programme – having spent two years on it – but remain jobless. This is the vast majority of ESA claimants who start on the Programme. The Greater Manchester initiative is called “Working Well”.
The project board is chaired by one of the Greater Manchester local authority chief executives, and includes Jobcentre Plus, NHS England, the local Drug and Alcohol Team, the mental health trust, Greater Manchester Housing, Manchester College and the Adult Education Service. The mental health trust is providing Working Well clients with an express route into support. The Working Well cohort is a priority group for the Drug and Alcohol Team. Housing associations are prioritising key repairs for Working Well clients. With everybody working together, the support provided will be much more likely to be effective. But that degree of integration can only be delivered locally.
Of course, there will be a great deal to do at the centre too. We will need to freeze energy prices while we reform the energy market, raise the National Minimum Wage, promote the Living Wage and require it from state contractors, legislate for worker representatives on boards, shift spending from subsidising private rents to building new homes, and – with wage subsidies to deliver our Compulsory Job Guarantee – from supporting unemployment to supporting employment.
To tackle inequality we need to renew employment programmes and re-distribute power. That will require much stronger, local economic leadership at the city and county region level. Tackling inequality is a national project, but it will require radical action locally.
Rt Hon Stephen Timms MP is shadow minister for Employment. This post is based on a talk at the Fabian Society AGM, 15 November 2014