Wales should set a bold ambition for at least three quarters of working-age people to be in work, closing the employment gap with the rest of the UK, argues a new report from Learning and Work Institute (L&W). The report finds this would boost the Welsh economy by £1.4 billion and save taxpayers up to £500 million per year.
To achieve this, we need to increase employment in Wales by at least 60,000 people, through helping more people into work and supporting them to stay in work. This would lift the employment rate in Wales from 73% today to match the current rate of 75% for the UK as a whole.
The new report, A Work, Health and Skills Plan for Wales, comes at a time when the UK Government has committed to devolving all non-Jobcentre Plus employment support programmes. L&W analysis indicates this could mean £47 million per year, on top of the £288 million the Welsh Government already spends on helping people find work and improve their skills.
The report, delivered by L&W and funded by Serco, calls for urgent action to deliver more employment support, join up existing employment, skills and health support, and improving how services work together locally.
Economic inactivity is higher in Wales than the rest of the UK and driven primarily by disability and long-term health conditions, with 7% of the working-age population economically inactive for this reason. In some parts of Wales, like Blaenau Gwent, almost one in seven adults are claiming benefits for being out of work due to a disability or health condition. This is double the rate in places like Gwynedd.
Among people who are economically inactive due to their health, 42% have no qualifications, three times the rate of the wider population. This stark disparity underscores the need to join up employment support with health and skills provision.
Employment outcomes and opportunities also vary widely depending on who you are, and where you live. Women are significantly more likely to be economically inactive than men (19% compared with 13% respectively), and people from ethnic minority groups face higher rates of economic inactivity (18% compared with 16% for those from White backgrounds). This is compounded by regional differences impacting peoples’ outcomes, with employment rates shaped by a combination of economic, demographic and structural factors.
To tackle these challenges, L&W argues the Welsh Government should:
- Establish a 10-year Work, Health and Skills Plan led jointly by the Welsh Government’s Health, Economy and Education departments.
- Invest an additional £180 million per year in employment support, in particular to help to more people who are economically inactive, given only one in ten out-of-work disabled people get help to find work each year currently.
- Create a new Employment Support Network for Wales, providing a single, accessible front door to integrated support across work, health and skills.
- Empower Corporate Joint Committees (CJCs), made up of groups of local authorities, with statutory responsibility and funding to deliver the plan locally, tailored to regional needs.
- Improve data sharing and evaluation, including exploring a new data lab to assess if programmes are working.
The report also calls for closer alignment with Business Wales and stronger employer engagement to better support employers to create inclusive workplaces and job opportunities.
Stephen Evans, Chief Executive of Learning and Work Institute, said:
“Wales has a great opportunity to help more people into work, growing the economy and saving taxpayers money. It needs a bold ambition for at least three quarters of working-age adults to be in work and a clear plan to help an extra 60,000 people into work by better engaging and supporting people who are economically inactive. Grasping this prize will require local and national action to join up work, health and skills support for people and employers.”
Luke Fletcher MS, Plaid Cymru Member of the Senedd for South Wales West, said:
“This report presents a compelling case for renewed ambition in how we support people into work. If Wales is to close the employment gap and reduce economic inactivity, we must give renewed impetus to tackling the health- and skills-related barriers that drive economic inactivity while ensuring that the right support structures are always within peoples’ reach. We know that long-term ill-health and difficulty gaining qualifications often go hand in hand, creating a cycle that makes access to stable, rewarding work especially challenging. Addressing this head-on is crucial if we are to create the conditions that allow more people to participate fully in the Welsh economy.”
Joanne Powell, Contract Director at Serco Restart Scheme Wales, said:
“We welcome the findings from our partnership research with Learning and Work Institute, which highlight opportunities to support people across Wales. This marks the start of closer collaboration with key stakeholders to address skills gaps and help economically inactive individuals move into sustainable employment.”
