The job market has changed — our benefits system needs to reflect this

How people are supported into employment will need a rethink. Here’s where to start

In a few short months, the UK has moved from record employment and a dynamic labour market to both growing unemployment and lower levels of job vacancies. We’re seeing the impact of this first-hand within our own service — demand for redundancy advice increased by 199% during lockdown compared to the same period last year.

Since March, over 3 million people have made a claim for Universal Credit. And it’s likely this number will continue to grow as the Job Retention Scheme winds down and businesses attempting to reopen face tough choices about their future.

It’s right that we now look towards gradually rebuilding our economy — but this will be a slow return to business as usual. With 6 times as many people required to look for work on Universal Credit and Jobseeker’s Allowance than there are vacancies, millions of people may be unable to find work until hiring picks up again.

The Government will need to give careful thought to how to best support people on benefits to take up work or increase their hours in these challenging circumstances. The role of work coaches and the approach to benefit conditionality will be crucial to this.

Many people will face new barriers to seeking work

44% of people (2.3 million people) on Universal Credit are theoretically required to ‘take action to secure work’ in order to receive benefits. Job-seeking requirements for this group have been paused for 3 months, but this suspension is due to end on 30 June.

But a complete return to benefit conditionality prior to this pandemic won’t be feasible. Here’s 3 reasons why:

1. The continuing health crisis means many people temporarily have a reduced ability to work

Coronavirus has created new challenges for those looking for work.

For families, ongoing disruption to schools and childcare options mean people may need to care for their children during the time they could otherwise spend working or applying for jobs. On Universal Credit alone, just under half (45%) of all households have dependent children, 74% of which are single parent households.

Travelling to work may also be more challenging where there has been a reduction in public transport capacity. People are being encouraged to walk, cycle or drive, but this won’t always be a viable option. While many people can work from home, this won’t always be possible for reasons such as digital exclusion, caring responsibilities, or being in a job that cannot be done from home.

2. People who have been shielding for the past 3 months are likely to face particular barriers to returning to work outside the home

From 1 August, shielding requirements will come to an end in England and people in this group will be able to return to work.

However, with current conditionality easements due to end in June, this leaves those shielding facing a month (potentially longer in Scotland and Wales) where they could technically be required to look for work. This could create a situation where people face the impossible choice of taking on a job that compromises their health, or risk facing a sanction for not meeting job-seeking requirements.

Beyond this group, those at moderate risk of coronavirus due to certain health conditions such as diabetes or heart disease may also struggle to find work that doesn’t put their health at risk.

Government guidance still requires these individuals to take extra precautions with their health — this presents a strong case for extending conditionality easements for these groups as long as shielding guidance is in place.

3. The impact of this crisis will vary across the country

The uneven contraction of the labour market across different regions — and sectors — of the UK will need to be taken into consideration in determining support for job-seekers. In England, the north-east currently has the highest number of unemployed people per job vacancy, for instance.

In areas with low rates of vacancies, it may be more appropriate to reorient conditionality towards retraining, ensuring people have the right skills to take up jobs that are available in their area or that emerge in the future.

Looking ahead

As lockdown eases and we look towards economic recovery, it’s vital our benefits system supports people to enter and progress in work. We’re calling for the Government to:

• Extend the suspension of conditionality in line with public health guidance, in particular for groups who risk facing particular barriers to work as a result of coronavirus.

As a minimum, this should include:

• Those in the ‘shielded’ or ‘moderate risk’ groups, or anyone living with or caring for people in these groups
• Those caring for children who they are unable to return to school or childcare settings

These changes should apply to relevant recipients of Universal Credit and Jobseeker’s Allowance, as well as Employment and Support Allowance (income-related and contributory / ‘new style’).

• Ensure claimant commitments are reflective of a claimant’s individual circumstances and the local labour market

Depending on the needs of the individual, this should involve considering setting job-search restrictions to roles where somebody could work from home.

By ensuring a flexible approach to conditionality, people on benefits will be in a better position to take up work in a way that is manageable, and doesn’t risk jeopardising their health.