The UK Government has released its long trailed Get Britain Working White Paper. The White Paper sets out significant reforms to the way employment support will operate across the UK, and in particular in England, with the aim of bringing health, work and skills together in a more locally responsive delivery model.
Why does the system need reform?
Well, put simply, the UK has seen a significant rise in economic inactivity driven mainly due to ill health. In Wales, this problem is more acute. Our economic inactivity rates are typically 4-5 percentage points higher than the UK average anyway, and in recent months we’ve had Labour Force Survey (LFS) economic inactivity figures as high as 28% for Wales, suggesting a large growth in individuals not working, and not looking for work. This needs a caveat of course, the LFS is currently unreliable due to sampling issues, so we don’t know with as much precision as we’d like what the picture really looks like.
On the other hand, unemployment in Wales and across the UK is close to a natural rate. Of course, nobody wants to see unemployment rise, but the system as currently constituted places a lot of emphasis on getting unemployed people back into work. This means that support is often not targeting the right people. We know for instance, that only one in ten older or disabled workers get support to find work and across the UK only 1% of economically inactive people are in work 6 months later.
This is particularly important given the UK Government’s target of an 80% employment rate, which can only be achieved by tackling economic inactivity. For instance, in Wales we’d need an extra 43,000 people in work to close the employment gap with the UK and 131,000 to reach an 80% rate. There are 72,000 people unemployed, which isn’t enough people to achieve the 80% target, and they already receive significant support. However, there are around 500,000 economically inactive, just over half of whom are long-term sick with a further 158,000 caring for others. A significant minority say they want to work. Extending support to economically inactive people really matters if we want to make progress on employment.
A foot in both camps
So how does the reform impact what happens in Wales? Well, as we set out in our report earlier in the year, Wales has a foot in both camps. The UK Government’s Department of Work and Pensions (DWP) currently holds the reins on major employment programmes, including large contracts such as Restart and the Jobcentre Plus network. On the other hand, some employment support, particularly focused on young people, is devolved (Jobs Growth Wales+ for example). Historically too, European structural funds played a massive role in Welsh employment policy, although the nature of that role has changed with a centrally controlled Shared Prosperity Fund after Brexit.
If we’re thinking about health, work and skills as the driving mantra then obviously two major planks of this policy – health and skills – are entirely devolved, meaning things will inevitably be different in Wales.
So how does the white paper get around this?
From my reading, it does four big things.
Firstly, it commits again to the devolution of all non-Jobcentre Plus employment support funding to Wales. This was in the UK Labour manifesto and would move a major plank of policy out of the DWP and into Welsh Government. This is inevitably going to take some time, so next year the white paper suggests Welsh Government will receive funding for testing and trailblazing activity around health, work and skills.
The centrepiece of reform in England focuses on combining the Jobcentre Plus with the National Careers Service, to shift the emphasis away from managing welfare towards careers advice and employment. That’s a policy impossibility in Wales given Careers Wales (devolved) and Jobcentre Plus (reserved) can’t be merged without further devolution or a removal of existing devolution. So instead, the White Paper talks about flexibility in the delivery model to ensure the model reflects devolved services in Wales.
Lastly, the White Paper promises to establish new governance arrangements with the Scottish and Welsh Governments to help frame discussions around the reform of Jobcentre Plus and agree how best to work in partnership on employment issues for which both governments have responsibility and shared interests. This marks a major departure in tone from the previous UK Government and delivers one of the key recommendations from our own examination of employment support in Wales. This is a very welcome development.”
So, what’s the upshot of all this?
This seems to be a genuine attempt at reconciling DWP’s previous more centralised approach with the realities of devolution in Wales. The devil will obviously be in the detail (and there’s a lot more detail to come), but the tone is encouraging, reflecting a change in attitude in UK Government.
When you put together existing devolved employment support (Working Wales, JGW+ etc), potential Welsh Government control over any successor to the Shared Prosperity Fund, newly devolved employment support funding and a Jobcentre model that reflects the Welsh policy landscape, you end up with Welsh Government very much in the driving seat in tackling economic inactivity and increasing employment.
The challenge will now be to get coordination within Wales right and ensure that the provision is focussed on the right thing. The opportunity then, is to drive a much cleaner alignment between policies to keep people healthy, policies to improve their skills and support to get them into work. We need to start thinking about the NHS and waiting lists not just as important to health, but to employment too.
This should be a key part of the debate for the 2026 Senedd election where all parties will have the opportunity to shape how this could work in Wales. hin the context of the CAVC Group’s strategic priorities, Richard is responsible for setting the strategic direction and the overall performance of the organisation.
