The prime minister's aim of British jobs for British workers won't work unless the government faces up to the scale of effort needed to help millions of people currently on sickness benefits back into work, and tackles the skills gap for those not in employment.
That is the warning of the CBI as it publishes its submission to Work and Pensions Secretary Peter Hain today (Wednesday) in response to the government's green paper on welfare reform.
The business group says it is unacceptable that, in a successful economy, more than 4.5 million people ñ many of whom could work if the right support and training was made available ñ remain on benefit, costing taxpayers 12.5 billion a year.
Tackling this would benefit business ñ which needs more skilled staff ñ and government departments, which need to make savings in the light of the announcement of lower spending increases announced in the Comprehensive Spending Review.
John Cridland, CBI deputy director-general, said: The success of the prime minister's exhortations to 'employ Britons' is dependent on action to make them more employable. If the quality isn't high enough then no business can or should be expected to choose second best.
Government investment in programmes to help people in to work have had some success ñ and business is prepared to build on this through the Jobs Pledge, the CBI says. But these schemes will only succeed if these individuals are given personalised support so they can gain the skills needed to be ready for work.
The CBI says the government needs to show political leadership and drive through plans to use the private and voluntary sectors in welfare-to-work initiatives if it is to achieve its ambition to get 80 per cent of people of working age into employment, a target set in 2005. The excellent track record of private and voluntary sector organisations in getting people back into work ñ and keeping them in employment ñ will only be replicated more widely if the right government support is given.
The CBI stresses that helping some of the hardest-to-reach individuals into work is crucial to improving social cohesion and Britain's economic competitiveness. The submission says joining up support on issues such as poor health, limited access to childcare and mental and physical disabilities, as well as the common problem of low basic skills, is essential to helping individuals overcome multiple disadvantages.
The CBI submission draws on experiences from other countries, in which many British companies are already operating highly successful welfare-to-work services.
It also notes that businesses are already working in local communities to help people get back into employment by supporting the government's Jobs Pledge and local employment partnerships.
John Cridland continued: The government knows what it has to do. But ministers need the political courage to push through with reforms and help people get back into, and stay in, work.
Employers are creating job opportunities every day. But they should have the confidence of recruiting from their local communities, which would help tackle social exclusion and lift individuals out of a cycle of benefit dependency.
Specialist welfare to work providers in the private and voluntary sector are also showing what is possible if they are given the right incentives and scope to succeed. But this has only been on a small scale so far, and the UK needs this success to be seen on a much larger scale if the massive burden of welfare dependency is to be reduced.
The CBI says four key things are needed if an effective market in welfare to work services is to be developed and maintained:
- Contracts of sufficient length for providers to make long-term investment in the services they offer and staff development. The CBI recommends seven-year contracts, allowing all providers ñ and especially smaller organisations ñ to plan ahead
- A 'prime contractor' model to manage welfare to work provision and decide which sub-contractors ñ whether from the private, voluntary or public sector ñ would be most appropriate in getting people off benefits and into sustained employment. This model would encourage a focus on the needs of a sub-region as a whole and would provide both economies of scale and the scope for significant efficiencies
- These contracts should be at a sub-regional level, merging districts to create 25 to 30 'super districts'. This would be a manageable number of contracts for the Department for Work and Pensions, while ensuring contracts are of a size to encourage providers into the market
- The Department for Work and Pensions must improve its commercial capacity, and equip its staff with the necessary procurement and contract management skills. It should be clear in the outcomes it wants and ensure the best providers, regardless of sector, compete on a level playing field to help get people off benefits and into work.
British Jobs for British Workers needs skills drive - CBI
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