Lack of good-quality jobs undermine government aims to boost employment among benefit claimants

The government’s ambition to move more people in receipt of universal credit into work is being undermined by a lack of good-quality jobs in the regions with the highest number of people claiming universal credit, according to new research from the New Economics Foundation (NEF).

The analysis revealed regions including the north-east, West Midlands and Wales have a higher proportion of low-quality jobs and people on universal credit. The definition of a low quality job was based on factors including low pay, lack of job security and flexibility, as well as minimal opportunities for career progression.

Areas with high numbers of people claiming universal credit also had lower numbers of job vacancies, reducing the options available for people who are looking to get into work. The analysis revealed the local authorities with the lowest numbers of vacancies per 100 people on universal credit:

• Rotherham has less than 5 vacancies (4.48) per 100 Universal Credit claimants.

• Pendle has 5 vacancies (5.06) per 100 Universal Credit claimants.

• Hartlepool has just over 5 vacancies (5.11) per 100 Universal Credit claimants.

The research argues that strict conditions in the benefits system, which force people to take jobs that are poor-quality or face sanctions, may make it more difficult for people to secure long-term, good quality employment. People who are forced to take poor quality jobs are more likely to end up unemployed again and continue to need support from the benefits system.

Max Mosley, senior economist, New Economics Foundation:

“A heavy reliance on rules and pressure in the benefits system means people are often forced into low-paid, insecure jobs. This approach is counterproductive as it’s unlikely to lead to long-term, sustainable employment and reduce the number of people on out-of-work benefits. Employment support needs to be aligned with the reality of local labour markets, and encourage people into jobs that offer genuine security and progression.”

To help more people back into work, the report recommends the government reduce its reliance on conditionality in the benefits system and refocus on fostering genuine engagement with people. It also identifies that more investment in local job markets is needed to improve the quality of employment available across the country.

Notes

The full report is available to read here.

The report combines international, regional and individual-level analysis to assess how the UK benefits system interacts with job quality. It draws on OECD data to compare the UK’s use of benefit conditionality with other advanced economies, and links this to measures of pay, security and job type.

Within the UK, the analysis brings together official data on universal credit caseloads and job vacancies with a new index of job quality built using large-scale household surveys, allowing us to assess both the availability of good jobs and the types of work claimants are likely to enter.