02 March 2007

Jim Murphy MP

Minister of State for Employment and Welfare Reform

Welfare to Work Scotland – the UK perspective

Friday, 2nd March 2007

[Check against delivery]

A few months ago, I visited a project very near by. I met a 29 year old man recovering from cancer. He was the father of two young sons, one disabled, another born with cancer. Until recently – at just 29 years old - he had already considered himself retired from work.

But the programme which he was involved in was helping him to turn his life around. That programme was built on partnership – a partnership, would you believe it – partly between the Celtic and Rangers football clubs.

Of course, many more organisations play a crucial role.

• Whilst Celtic and Rangers allow the programme to be run on their premises and provide football-coaching sessions, course trainers are supplied by Careers Scotland.
• A Jobcentre Plus Personal Adviser provides in-work benefit calculations and matches trainees to suitable vacancies.
• Whilst the Glasgow Employer Coalition develops employer engagement, encourages employers to give talks about their organisations and provide job vacancies.

The success of this partnership is inspiring. Three-quarters of the people who have completed the programme are now either working, or on a training programme which should lead to a permanent job.

This conference today also shows another example of successful partnership. Just as Government alone could not have had the same success that the project illustrates; nor could Scotland, alone, have achieved the incredible progress that it has shown over the last decade.

Ten years ago, many people thought that the North-South divide would persist, perhaps even get worse. Yet Scotland now has employment rates higher than the national average – meaning that there are now 280,000 more people in work than there were a decade ago. This is coupled with the fact that - in contrast to the rest of the UK - Scotland has met the interim child poverty target.  100,000 fewer children are being brought up in poverty, than were in 1997.

Looking at where we have come from, even our staunchest critics cannot deny that we have made substantial progress.

I know that yesterday, Allan was talking about the music of the era - Bohemian Rhapsody -  to illustrate how long ago it was that unemployment was at such a low level. I would like to talk about something closer to my heart – football. 1985 was the last year that a non-Glaswegian football club won the Scottish League. It was also, the first year that unemployment hit 3 million.  

By the time this Government came to office in 1997, we inherited a welfare state which had given up on people - lone parents, the disabled, those from ethnic minorities and young people were left as nothing more than statistics - numbers in the benefits queue.

Problems caused by years of neglect required not just extra money but radical solutions. From the creation of Jobcentre Plus and establishment of the New Deal, to the Welfare Reform Bill currently progressing through parliament - we have not shied away from taking the radical option.

The results have been clear - the employment rate for the most disadvantaged groups has increased more than for anyone else in the last 10 years.  Just think, that in the two days that this conference is being held, across the UK:

• 480 children will have been lifted out of relative poverty
• Over 180 lone parents have moved into the labour market
• Whilst 540 disabled people have moved into work.

And it’s many of you here in this room that are helping to make that happen.

We have come a long way from the one size fits all model - a situation where a Pakistani woman looking for work in the east end of London was treated the same as a construction worker from the east end of Glasgow.  Indeed, I think that the success in Scotland has been a direct result of the partnership between national programmes, the work of the devolved administration and local initiatives.

For example, the UK wide framework has allowed resources to be directed at the areas in greatest need. Given levels of worklessness were so severe in Scotland, spending on the New Deal has been around 29% higher than it has been across the UK as a whole. Meanwhile, the initiatives such as Workforce Plus which I know Allan talked about yesterday have helped channel the work of education, regeneration, and health agencies to help support employment.

The cities strategy pathfinders – in Glasgow, Edinburgh and Dundee – are the next step along that road. Local partners are coming together from the public, private and voluntary sector, to maximise the impact of initiatives, through focusing on local solutions, combining and aligning their efforts behind shared priorities.

But let me be clear. We cannot rest whilst there are still people who do not share the same opportunities as others.

It is a shocking statistic that a baby born today in Kensington and Chelsea can expect to live for nearly 27 years longer than a baby born in one of the poorest parts of this city. That’s almost the same difference in life expectancy as between the UK and the Congo.

Despite the progress made, there are too many still trapped in areas of deprivation. That is why welfare reform still lies at the heart of the government’s agenda.

The problems we face now are very different to those we faced a decade ago.  The challenges brought about by globalisation and demographic change will affect Scotland as much as anywhere else in the UK.

So we do not in any sense, think that our job is done. Yes, the employment rates for disadvantaged groups have improved. But given that they started in such a low position, there is still along way to go. In Scotland, the employment rate for disabled people is still only around 50% and for lone parents it’s in the mid 50s – significantly below the UK target of 70%.

Our aspiration to reach 80% employment can only be achieved by extending the boundaries of welfare further than ever before. Reaching those who have traditionally faced the most disadvantages in the labour market; breaking the cycle of deprivation which still traps many families in poverty.

This focus is good for Scotland. With proportionately higher numbers of older workers, lone parents and incapacity benefit claimants, Scotland could potentially achieve an employment rate even higher than 80% - perhaps nearer 82%. This is the equivalent of helping an extra 240,000 people from these disadvantaged groups in to work. 

We also cannot ignore those who have become trapped in the cycle of benefit dependency. In Scotland alone, the equivalent of around 36,000 JSA claims per year are made by people who have spent more than three quarters of the past two years claiming benefits.

We know that there is a strong link between unemployment, benefit dependency and poverty. But sometimes, the areas of greatest unemployment, are the same areas where there are substantial numbers of vacancies. Here in Glasgow, for example, with its employment rate below the national average, there is nearly double the number of entry level vacancies than the national average. We need to do much more to break this cycle.

We cannot kid ourselves. It is not an easy challenge we have lay down. Neither is the historical target of eradicating child poverty within a generation – which I would say is probably the most far reaching social aim any government across the world has set itself.

Therefore, just as we were radical in 1997, we need to be radical in 2007. Solutions tailored to today’s problems will not be successful if they are bound by yesterday’s policies.

That is one of the reasons why the Secretary of State asked David Freud to undertake a wide ranging review of the welfare to work strategy. He is due to report to the department imminently.

This review will cover the design of welfare to work policy – whether we have got the best balance of rights and responsibilities, what steps could be taken to promote social mobility, through extending the boundaries of welfare from just getting a job, to progressing in a career. Alongside this he is looking at the delivery of welfare, how the cities strategy can be built on to unlock the potential of the most disadvantaged communities across the UK. And the review is also looking into how the skills, resources and capacity of the private and voluntary sector can be best utilised in order to support our objective of extending the right to work to all.

This will form part of a very serious conversation in the weeks and months ahead about the future of welfare across the UK. We need to open up the debate and have a discussion about where we really want to be in ten years, and how we want to get there.

We need to look forward, not back, in order to solve the challenges that lie ahead.  The progress made here in Scotland, more than anywhere else, should give us the confidence that we can succeed.