There are huge potential benefits from devolving employment and unemployment services to regions and localities. We need to apply long-term joined-up solutions to our education, welfare, employment and skills policies in order to reduce marginalisation in the labour market and transform the supply of skills for employers. In the UK this will be easier if we devolve these policies and public services from national to regional or local. Holistic and integrated approaches that work with employers in local labour markets are bound to be more successful than silo-based national approaches. This is the approach being taken in countries such as the USA and Denmark. These were the main impressions I got from the 10th OECD LEED (Local Employment and Economic Development) Forum annual conference.
It gave us a timely reminder that local economic policies need to ensure that local growth creates lasting jobs for people who need them. It also reminded us that all public and private organisations and energies need to work together to achieve this. There were several useful reflections for UK policy. Probably the most important point that struck me was that Active Labour Market Policies to get people from unemployment into work were often a direct reflection of the deficiencies of school-age guidance and education in getting people ready for a life of work and careers. Secondly, employer engagement seems to be a challenge for all OECD nations – only a handful get it right it seems – Germany, Denmark, Norway, Finland, Switzerland and Australia. In the UK we have got neither of these aspects right – there’s a lot more work to do.
Efforts at economic growth are pointless unless they create local jobs for people who need them
I attended the 10th OECD LEED annual conference last week. It was well represented by many OECD nations and international institutions. It was fascinating to hear about the challenges in Sweden – high unemployment rate, high employment rate, high school drop out rates, poor vocational education, poor employer engagement in education, skills and training – and a significant reduction in spending on active labour market policies and programmes. Sound familiar!? a lot in common with the UK it seems.
The main lessons I took away (that particularly apply to the UK)
1. We need more focus on the long term for our labour market which includes interventions for children. Active labour market policies, welfare reform, unemployment work experience schemes – these are all sticking plasters for a situation that arises because individuals are either unable to to find work independently in their local labour market; or they are vulnerable to changes in the labour market such as job loss, or a slump in labour market demand during or after recession. There is very little debate in UK policy outside of Scotland about how we prevent young people becoming workless adults. The education and youth policy system does very little to prepare children for the adult world of work and social contribution. Careers education and support is incidental in many parts of England.
At the OECD conference – it was apparent that many nations think and act on this. In Sweden, they have had a major push to cut school drop out rates at 16-18. In the USA they have implemented Big Data solutions to track individual school performance, employment and unemployment at state level and have produced predictive data analysis to flag up individuals at risk of poor school performance and unemployment in later life to introduce measures such as coaching, special education and after school provision.
This argument doesn’t just apply to work – it applies to long term happiness and health amongst individuals and society. People are happier and healthier in work. It is expensive to cope with people who are not and apply sticking plaster solutions later on.
2. There is a strong correlation between vocational education provision and low rates of youth unemployment
This came from quite a few speakers – including OECD analysts themselves – that the countries with the lowest youth unemployment rates, also had amongst the best vocational education systems for young people with good employer engagement – countries such as Germany, Switzerland, Finland and Denmark. Unfortunately such systems can’t be built overnight – but just look at the statistics, and the other benefits in terms of productivity and overall economic performance.
3. There are benefits from devolving employment services and welfare. Many OECD nations have pushed efforts into increasing the ‘individualisation’ of employment services (for the unemployed). Others are pushing for increased “localisation” and better joint working with local authorities and employers.
When I thought about a lot of the different points and speeches, I put this together in my head – more locally and regionally devolved welfare and unemployment insurance systems – well why not? – here’s a few arguments:-
- break the national departmental silos, lack of joint working, poor working relations with employers, and lets face it – sometimes indifference to the aims of getting people into work, with the sole aim of reducing the welfare roll
- at a local or regional level you can probably create an organisational unit that can bring together the agencies, specialised help and resources to tailor better individualised solutions that are closer to local employers
- the holistic interface of different public services (education, welfare, employment, skills) with employers – will probably be more successful if there is local autonomy and delivery
- there’s the opportunity for Big Data – i.e. individual panel data from schools, colleges, employment and unemployment (as in the USA)
- better scope to deliver holistic solutions and build a career ‘continuum’ by being better able to diagnose, refresh and refer cast study notes and clients
In the end, instead of being a national service that is focused on “getting people off benefits”; we could have a local or regional service that is about the “preparing and supporting individuals for lifelong learning and work.”
This is not an unrealistic suggestion – it already happens in some countries. In the USA, states control their own education and employment policies and deliver services. In Denmark, municipalities run education and services for the unemployed.
4. The ideal employment policies (if we started from scratch) based on experience to date would be flexible and individualised; based on career profession; and pragmatically deliver to skills needs more rapidly – according to Yves Leterme, the Deputy Secretary General of the OECD, in the first speech of the conference. The countries who have achieved this ideal include Germany, Denmark, Norway, Finland and Australia. What is apparent is that many nations are working towards these outcomes also, but are having to work around and through established governmental and territorial structures which get in the way. In some countries there are 3 or 4 levels of government with overlapping responsibilities.
5. There are some fundamental dilemmas and contradictions within some of our policies and what we emphasise. The particular contradictions that I could see at the conference included:
- Entry level jobs vs. quality jobs – there were a fair few commentators who said “we don’t just need jobs, we need highly skilled, quality jobs.” However – what we really need are a bunch of entry level jobs for unemployed young people; and the prospects and resources to support them into sustainable employment, and/or to gain skills. In addition, many economies have created service booms that employ more people in retail, customer service and leisure jobs which can be low skills jobs. Perhaps we are better off looking at reinforcing the social welfare aspects of employment for those who need it – i.e. job stability; social security; appropriate pensions and savings products; and careers and employment coaching and support. If we also gear our education systems to ensure minimum levels of literacy and numeracy that would help.
- Active labour market approaches vs. “careers continuum” – As mentioned, programmes for the unemployed are a response to spikes in unemployment; or the intransigence of unemployment in society – they are sticking plasters. There perhaps is not enough attention given to the “careers continuum” of individuals – i.e. ensuring that the risk of unemployment is reduced through effective education; and then providing ongoing or periodic support when needed during working lifetime.
A labour market is for life (generations actually)…
I think the overwhelming thought I came away with was that a lot of policy is reactive to negative events and situations. There is a fundamental lack of consideration of the long term causality and incidence of unemployment and marginalisation within the labour market. We pay now for the past legacy of an insufficient or unsuitable education and a poor vocational education system 5+ years ago. A lot of people do not have problems in the labour market; but a significant minority do, and anyone could potentially face difficulties if they return to the world of work after a major life event such as caring, children, prison or illness. There’s lots of rhetoric that says people should seek work – but then society needs to help this happen – both in the short term (via active labour market programmes) and the long term (via early interventions and actions in the education system).
Other thoughts
Local employment and economic development – more local participants please(!)
The participants were in the majority working for national government departments or agencies. Being the Local Employment and Economic Development Forum – perhaps more participation from regions, cities and localities could be encouraged next time?
The challenges are not so different: Is the UK lacking engagement in the international community for employment and skills policy?
Isn’t the UK interested in sharing experiences with other nations? the conference was not well attended by the peers of employment and welfare departments in Europe, or of executives from employment agencies. I find this perplexing – particularly in relation to European Funding. How can the UK influence EU funding to be more beneficial for the UK context, if there is no engagement nor appreciation of the similarities and differences between the UK and our European neighbours?
The argument that “we’re different ” wears thin when we look at countries like Sweden, with a very similar set of challenges – i.e. lagging behind the leading nations in terms of education, skills and labour market performance.
Since the next OECD LEED conference is in London, UK in 2015 – plenty of time to put that right?
