Off the back of the IncreaseVS project, which looked into how to improve the employment prospects of people in deprived communities, my colleagues and I have argued that local solutions are the best way forward.

Central to this approach is that solutions come from the community itself, so they enjoy the fact that the solution has inevitably factored in the unique circumstances of that particular community while also having been generated by an insider rather than an outsider, so, therefore, benefit from enhanced credibility.

Economic inactivity

Projects such as this are important as they highlight the often hidden problem of economic inactivity. Globally, unemployment has been at very low levels for some time, creating the impression of a healthy economy. Economic inactivity paints a different picture, however, as the number of people of working age not currently in, or looking for, work has risen considerably since the start of the pandemic.

Individuals classified as “economically inactive” are not currently employed nor are they actively seeking employment. This group encompasses a variety of individuals, including students, retired seniors, those in poor health, and caregivers tending to family members at home. Addressing the needs of this population could serve to alleviate the current labor shortages in the UK, which are leading to increased workloads for existing staff, limiting output and impeding business growth.

According to the Annual Population Survey conducted by the Office for National Statistics, there are approximately 1.65 million individuals in the UK who are economically inactive but express a desire to work, contingent upon receiving support. Experts have urged policymakers to expand access to existing government-funded programs and tailor these services to suit the unique needs of these individuals.

However, the available mainstream national employment support options often fail to serve economically inactive individuals adequately. Inactivity rates vary significantly across regions and have remained persistently high in certain areas for many years. For instance, in 2022, East Lindsey, Lincolnshire, reported an economically inactive working-age population of 36%, while Wandsworth reported only 9%.

Local approaches

Research from the University of Birmingham highlights the importance of adopting local approaches to employment support to help reverse this situation.

Employment support services in the UK could benefit from a more localized approach that involves working with local policymakers and organizations to design tailored policies and programs. By focusing on the most pressing issues in the area, such as debt, poor health, and limited childcare, these initiatives can help people with complex barriers to work.

Furthermore, localized employment support can reduce the duplication of services while addressing gaps in current support. Engaging local stakeholders in designing these programs can also enable better targeting of policy.

For instance, a government pilot employment scheme, Connecting Communities, took a place-based approach to employment support in the West Midlands from 2018 to 2021. It offered tailored, intensive support to individuals in nine neighborhoods, using various engagement methods to reach those who traditionally do not seek employment support.

An evaluation of the scheme conducted by the Institute for Employment Studies and Birmingham University’s City Region Economic and Development Institute (City-Redi) found that personalized, place-based employment support can effectively help people with significant barriers to work. Additionally, such programs can raise awareness of employment opportunities and help participants work towards them.

Critics of mainstream provision have argued that it focuses on sanctions rather than support, with the number of applied benefit sanctions reaching 52,000 in March 2022. Research suggests that employment advisers are not held accountable for their decisions and that a more local approach could build more trusting relationships between jobseekers and advisers. Such an approach could also extend support to economically inactive people rather than solely targeting those on benefits who are required to actively search for work.

A centralized approach

The United Kingdom has long pursued a centralized approach to employment support, with local Jobcentres primarily responsible for implementing national policies. However, this support is limited in scope and geared towards moving active job seekers receiving benefits into employment, leaving out many economically inactive individuals.

To remain eligible for benefits, job seekers must engage with the provisions and meet their adviser’s requirements. Currently, local councils and authorities lack the authority to implement locally-specific employment support programs, resulting in fewer evaluations of such policies.

Recent government pilots have explored alternative employment support approaches in various city regions, indicating a willingness to consider different strategies. The Local Government Association has called for greater devolution and partnership working under a “Work Local” model, which would enable a more cohesive and supportive approach.

Although the government’s 2023 budget did not emphasize employment support, it did announce a trial of an integrated work and health support approach in local areas and pledged to involve Manchester and the West Midlands in all future contracted employment support through a co-design approach. Meanwhile, the Labour Party seeks to expand employment support by devolving it to local authorities and embedding career advisers in health services to assist individuals in finding work.

The wrong approach

Despite these developments, recent proposals for local approaches to employment support may not significantly reduce inactivity levels. Compared to other countries, the UK spends relatively little of its GDP on active labor market programs, including public employment services.

Therefore, the government should prioritize targeting and funding national employment support initiatives, rather than relying on sanctions to push individuals into unsuitable jobs.

In short, the research indicates that a different approach is necessary, one that matches job seekers with positions that more closely meet their needs and align with local demands. Such an approach would help people return to work and address the labor shortages that are harming the UK economy.