Over the past couple of years, the government has introduced a variety of programmes to address the lingering high unemployment rate. The new programmes – like the “Flexible New Deal” – were intended to address specific concerns, but their fragmented and piecemeal approach has caused many to fall through the cracks and not reach their full potential. Fortunately, the coalition government is planning to consolidate the programmes into a single work programme, similar to their well-regarded Universal Welfare Credit proposal. The 6 Month Offer (pdf) (6MO) should be included and expanded in the plan’s framework, as this would increase worker training, skills and innovation.
In 2009, the government introduced the 6MO to address concerns that those who are unemployed for 6 months and beyond are sometimes considered a liability by employers. By providing paths towards self-employment, work-place volunteering, employer vouchers and retraining, the Department for Work and Pensions (DWP), hoped to strengthen and accelerate their employability. However, as of August 2010, by comparing DWP 6MO sign-ups to UK Department of Statistics unemployment data, one can roughly see that less than 5% of those eligible take advantage of the programme. This is mainly due to the scattershot approach to addressing unemployment rather than unattractiveness of the options given. Increasing these numbers could be accomplished by broadening the programme’s availably while tweaking some of its components.
To fully maximize 6M0 benefits, the coalition government’s workforce reform proposal should incorporate the following:
(1) the 6MO self-employment support, training and volunteering components should be advised and available on the first day of unemployment. Many of those who are freshly unemployed might be ready for a new industry or have entrepreneurial ambitions that could help strengthen workforces or introduce new small businesses in the community. At the least, it will allow the unemployed to begin considering the options for when they themselves are ready.
(2) Encourage volunteer opportunities for all; not just those who are considered furthest from being “labor market ready.” Unexpected networking opportunities could occur and should be encouraged.
(3) Since these options would likely be in addition to job-search assistance/resume support, if an unemployed person selects one, they should be positively rewarded in some fashion. A benefit supplement might nudge them to expand their skills or spend their extra free time active in the community.
(4) Finally, if they are unemployed after six months, mandatory selection of one of these avenues should be required. DWP evidence suggests 75% of workers still unemployed after 6 months have “significant barriers” that require additional support. If one of the options has not been selected, conditionality or sanctions could provide the needed motivation.
The coalition government’s focus on consolidation and simplification is a step in the right direction of improving government efficiency. By applying these principles to unemployment support, and incorporating the 6MO avenues, the British economy will likely be rewarded with a trained, involved and adaptive workforce.